Legal Question in Employment Law in Massachusetts

Re: Vacation Policy Change

You are free to change your policy. You should have a date that that change will be take place, and be sure that it is appropriately posted and you should take affirmative steps to ensure everyone knows about it.

Now, about those 4 people....this is where it gets sticky. If these employees earned this vacation - in terms of the period of time they worked in a particular calendar year pursuant to a policy (and it does not have to be in writing) - you cannot unilaterally decide to take that extra week back. Earned vacation pay has the same status as earned wages. Now, this does not mean that at the anniversary of these four people you could not change the vacation policy so it is back to 3 weeks like everyone else. In other words, you're changing their ability to take future vacations - which have not already been due and/or accrued.

Of course, there is also a more practical aspect of this - and that's the cost. Granted, we are only talking about 4 people - and 4 people who have been with the company for more than 10 years. By reducing their vacation by one week, you're ultimately saving 4 weeks in payroll for what might be considered to be "dead" time because the employee is away. Reducing the vacation time to 3 weeks rather than 4 is not really a big deal - except, of course, for those employees who have been there for 10 years. Their dismay with the employer will spill over to the rest of the company - it's inevitable (and in my experience, you can count on it). The ultimate cost might be low morale, an increase in turnover (among other things)- all motivated by the employees' view that the employer does not appreciate the length of service of employees. I cannot phathom what that cost might ultimately be.

Perhaps a good solution - which would allow you to preseve your good will and fully appreciate the length of service of those 4 people, while at the same time avoiding running into those sticky "earned vacation" issues is to simply "grandfather" those 4 employees in under the old policy. That way, you save on the vacations for other people, you don't miff your valued senior folks, and you're less likely to be running afoul of the law.

Since the issue of earned vacation is technical, you might want to seek professional guidance (and not rely on this posting). That way, a professional can know all the details of your situation, and give you the best advice to rely on.