Unused Leave and Separation from Service

[Appleby]

Participant is no longer working for employer, but has accrued unused leave .

Is this participant considered ‘separated from service”? , or will he not be considered ‘separated from service’ until his leave is used-up?

[GBurns]

Good question.

I usually see this addressed in either a CBA or Employee Handbook, but that is because I only see this happening with large employers.

IMHO, it depends on how this employee will either cash out or get compensated. If cash out, then date of cash out should be date of separation. If the employee gets the time off and then collects pay for the time off, then the date of that paycheck should be the date of separation.

Of course, the cash out has to be a buy out of the days and not an advance payment.

My reasoning is that in the first cash out scenario, that employee would have started the days count for UC and also if they were injured after the date of the cash out they would not be covered for a WC claim. This is because there is no employee status.

In the second scenario, that employee would not yet be eligible for UC and would still be eligible to file a WC claim until the date of the payout because there is employee status.

[Guest mjb]

What is the basis for no longer working? If the employee is no longer working because the employee has quit or was terminated by the employer then he has separated from service. If the employee is not working for another reason such as disability, leave of absence ot illness then there is no separation from service. If the employee has taken terminal leave to use his vacation time then he will be employed until vacation ends. In any case it is up to the employer to detemine if the employment realtionship has ended based upon its employment practices.

[Appleby]

Responses much appreciated.

The basis for no longer working is that the employer resigned (quit). However, the employee will still be receiving compensation fur the duration of the leave period, and will receive compensation and beneficiaries as if she is still employed. In other words, has she taken the leave in previous years, she would still be actively working up to a certain date as she would have already used-up her leave. But since she did not, and plans to retire, she needs to use the leave to complete her service.