While some areas of wage-and-hour law are regulated extensively under the New York Labor Law and the relevant Wage Orders, in the area of vacation pay (and similar paid time off benefits) New York employers can define the terms of the benefit based on the seminal court decision addressing these issues, Glenville Gage Co. v. Industrial Bd. of Appeals of New York, Dep’t of Labor, 70 A.D.2d 283 (3d Dep’t 1979). Reaffirming the Glenville Gage rule, a New York appeals court recently vacated an award of monetary compensation for accrued and unused vacation pay awarded to a deceased employee’s estate. Steinmetz v Attentive Care, Inc., 2013 N.Y. Misc. LEXIS 2349 (N.Y. App. Term May 23, 2013).

In Steinmetz, plaintiff had been an executive employee for defendant. The parties did not dispute that she passed away with a large balance of accrued, unused vacation time. However, corporate policy and memoranda (in part authored and/or presided over by a plaintiff) stated that accrued vacation time had no cash value. Further, the company had never provided a payout to employees for accrued and unused vacation time. Absent express verbal assurances to the contrary, no entitlement to a payout was created, and the court vacated the trial court’s award of pay for the vacation time. Separately, the court noted that, as an executive, Plaintiff fell outside the “wage supplement” protections of N.Y. Labor Law § 198-c.

Steinmetz reiterates an important employment law principle in New York State: employer policies must clearly and unambiguously articulate benefits employers do and do not provide, and the terms of any provided benefits. Employers, of course, also must ensure that actual practice conforms to written policy.