On February 22, 2023, the Superior Court of New Jersey Appellate Division ruled that a hospital employee discharged for disciplinary reasons was not entitled to payment of accrued paid time off (PTO) because the hospital had an express policy that PTO would not be paid out after a disciplinary discharge.
In an unpublished per curiam decision in HMH Hospitals Corp. v. Warren, the appellate court found that the employee was not entitled to payment for any PTO accrued prior to discharge—even before the company’s PTO policy was put into place—because accrued PTO does not constitute wages under a state law and did not have to be paid out in the first place, except as provided by an employer’s PTO policy.
The decision overturned a lower court ruling that had awarded the employee payment for the PTO hours accrued on the date of the employee’s discharge. The lower court had held the company’s policy denying payment for accrued PTO hours was void because it found that accrued PTO constituted wages under the New Jersey Wage Payment Law and that there was therefore a statutory obligation to pay out PTO hours upon discharge.
The hospital employee, a certified nurse’s assistant, had sought payment for PTO hours she accrued under the hospital’s “Time Off with Pay: PTO” policy over three years of employment prior to being discharged in October 2019 for disciplinary reasons based on admitted misconduct. In April 2019, months prior to the discharge, the hospital instituted a policy where...
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