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Tina, Attorney
Category: California Employment Law
Satisfied Customers: 33167
Experience:  JD, 17 years experience & recognized by ABA for excellence in employment law.
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Can a large hospital that has many outlying clinics decide

Resolved Question:

Can a large hospital that has many outlying clinics decide that they are losing money & form a new medical group for some of the employees & cut their pay & have them start all over again with PTO,etc?
Submitted: 5 years ago.
Category: California Employment Law
Expert:  Tina replied 5 years ago.
Hello and welcome,

As long as the employer is not breaching employee contracts or engaging in prohibited discrimination or retaliation against the employees, they would typically have the discretion to form a new medical group for their clinics and modify pay rates.

However, the employers would not typically be permitted to unilaterally forfeit the employee's accrued but unused vacation pay. If a portion of the PTO time represents vacation pay, that time should either be carried over to the employees' payroll accounts or the employees paid the value of the accrued vacation.

Sick time could normally be forfeited during the transition though since it is not treated as earned compensation.

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