Laid-Off BuzzFeed Workers Demand Vacation Payout

Laid-Off BuzzFeed Workers Demand Vacation Payout

BuzzFeed—a digital media company headquartered in New York City—should have paid recently laid-off workers the vacation time they earned but didn't use due to the demands of the job, according to a letter from current and former employees.

"BuzzFeed is refusing to pay out earned, accrued, and vested paid time off [PTO] for almost all U.S. employees who have been laid off," the letter said. "They will only pay out PTO to employees in California, where the law requires it."

Employers are only required to pay out accrued vacation time in some states, but the BuzzFeed workers noted that many employers choose to include unused PTO in final paychecks, even when they don't have to.

"I get that people might want a different policy but for NYC based companies this is very common, and we looked at the total severance consideration and it was fair," Chief Executive Officer Jonah Peretti said on Twitter.

We've rounded up the latest news on this topic. Here are SHRM Online resources and news articles from other trusted media outlets. BuzzFeed did not response to SHRM Online's request for comment.

(Update: On Jan. 30, the Washington Post reported that "the company said it would pay accrued but unused time off after all, including in states where it's not mandated.")

Company Aims to Lower Costs

BuzzFeed recently laid off 43 of about 250 journalists who worked in the news division as part of a plan to cut its 1,300 workforce by 15 percent (200 employees). The cuts are meant to lower costs and help the company make a profit. Peretti said he is also considering mergers with competitors to address instability in the online-content market. Verizon Media Group—which includes Yahoo, AOL and HuffPost—is also planning to reduce its staff by 7 percent (about 800 employees).
(The New York Times)

Leader Is 'Open to Re-Evaluating'

More than 400 current and former BuzzFeed employers signed the petition to pay laid-off workers their accrued vacation time. Although the company is providing 10 weeks of severance pay and benefits, the workers claim that it's unfair to withhold earned accruals from final paychecks. The letter states that for "many people, paying out PTO will be the difference between whether or not bills and student loans will be paid on time and how their families are supported." In response to the letter, human resources head Lenke Taylor said the company is "open to re-evaluating this decision."
(The Washington Examiner)

Check State Laws and Employer Policies

Whether an employer must pay out vacation accruals at termination depends on state law and company policy. Employers in California, Illinois, Massachusetts and Montana, for instance, must pay out any accrued but unused vacation time when an employee leaves the company. However, employers in many states are required to do so only if it is their policy or practice to pay out balances when employees depart.

In Maryland, organizations can opt out if they have a written policy stating that they don't pay for accrued vacation and they notify new hires about the policy. 

Unused sick leave generally doesn't need to be paid out if it is treated as a separate category of time off. However, employers that lump together vacation and sick leave into a PTO program will need to pay out all unused time in some states. Additionally, a payout may be mandated under a collective bargaining agreement, even if it isn't required by state law.
(SHRM Online)

[SHRM members-only resource: Compliance Resources] 

Unlimited Vacation Policies Raise Concerns

Instead of carefully tracking how much time each employee takes off during the year, some employers offer unlimited vacation or PTO policies. These policies may give employees more flexibility and alleviate the record-keeping burden on employers. But it's not always clear under state law if employers still need to pay out vacation time when employees depart. For example, an Illinois Department of Labor FAQ states that employers with unlimited PTO policies must pay the equivalent to "the amount of vacation pay to which the employee would otherwise have been allowed to take during that year but had not taken." The FAQ isn't a binding regulation, so there's no clear answer for Illinois employers on how much time needs to be paid out under an unlimited PTO policy.
(SHRM Online)

Encouraging Workers to Take Time Off

Some employers are finding creative ways to encourage workers to use their vacation accruals. Bart Lorange, CEO and co-founder of Denver-based software company FullContact Inc., pays his employees to take vacations. Employees at Moz, a software company in Seattle, also get a vacation fund. Workers receive $7,500 annually after one year of employment if they use the money to take a vacation and agree to disconnect during their time off. 
(SHRM Online)



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