Court Ruling Will Make Employers Happy, Workers Mad

The decision by a federal appeals court affects worker vacation time.

A federal appeals court has ruled in a case involving worker vacation time in a way that's likely to upset employees. 

Employers can legally dock your paid time off without violating the Fair Labor Standards Act, according to an appeals court ruling this week.

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Paid time off is a "fringe benefit" that does not count towards an employees salary the U.S. Court of Appeals for the Third Circuit ruled.

The plaintiffs in the case worked for Bayada Home Care, which provided in-home nursing care to its clients. The company had a policy of docking PTO from salaried clinicians who failed to meet certain work quotas. 

The court upheld a District Court ruling that saw a "significant distinction between PTO and salary," and granted Bayada a partial summary judgement. 

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"The key question when determining the legal classification of an employee for FLSA purposes is... whether an employer made an actual deduction from an employee's base pay," the court said in its ruling.

Despite the plaintiff's assertion that Bayada led them to believe that if they didn't have PTO to dock that the reduction would come out of their salary, the fact that Bayada never did reduce their salaries keeps the company clear of an FSLA violations, according to the ruling.

The court acknowledged that the term "salary" is never explicitly defined in the FSLA, but because the employer did not dock the "predetermined amount that the employee received" that Bayada is in the clear.