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John, Employment Lawyer
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I just started as the new executive director of a small nonprofit

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I just started as the new executive director of a small nonprofit with 5 FTE and an annual budget around $400,000, and employees work from home...no office per se. The exiting executive director who was employed for eight years has requested his vacation time pay out, which as per the employee manual he is due. However, no records were kept by him or the Board, most of whom are new. The Executive Committee of the Board is balking at accepting his hand written estimation of what he is due and doesn't want to pay him such a large amount without any documentation.

The employee manual says this about vacation accrual: Vacation benefits for full-time employees (employees who work 40 hours per week) are determined by the Board of Directors and will be communicated to you by your Supervisor. Employees who terminate their employment with unused accrued vacation time will be paid for that time.

Since the organization is not audited, small enough in WA state to simply do 990's, I can't find any vacation accrual paperwork from the bookkeeper. The executive committee has asked me to help them resolve this issue to mutual satisfaction, but I wanted to reach out to find out about legal ramifications as well. I know that it is legally the responsibility of the Board to keep contractual documentation, but they didn't. It's also the responsibility of the CEO to maintain good organizational records, especially HR records, and he didn't. The executive committee doesn't want to pay him. I feel we need to offer a settlement of some kind, or should we pay him the full amount he is requesting ?
Submitted: 1 year ago.
Category: Employment Law
Expert:  John replied 1 year ago.
Hi, thanks for submitting your question today. There is a legal obligation, unfortunately, for employers to keep wage and hour records stored for up to 3 years after employment. In cases in which the employer fails to keep these records, and where there is a dispute over the number of hours, the employee may make his best estimate of hours worked to prove a claim - it would then be up to the employer disprove the employee's allegations.

In this matter, not only did the employer not keep the proper records but has no basis to challenge the employee's allegations of time worked/vacation accrued. You could offer him a settlement amount, however, I see no reason why he'd accept it, and then you risk him bringing a claim with the state for the past due amount. In short, I just do not see any leverage on behalf of the employer; maybe he'd settle just to avoid the time and hassle of filing a charge; it may be worth it to simply attempt a settlement then pay him the full amount if he balks at settling.

I believe this answers your question. However, if you need clarification or have follow-up questions regarding this matter, I will be happy to continue our conversation – select the Reply to Expert or Continue Conversation button. If you are otherwise satisfied with my response, please leave a positive rating as it is the only way I am able to get credit for my answers. Thank you, XXXXX XXXXX wish you all the best with this matter.

John, Employment Lawyer
Category: Employment Law
Satisfied Customers: 3119
Experience: Exclusively practice labor and employment law.
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