Unless your employer has a very unusual policy, it appears very
unlikely. The only way you can be certain of vesting in your 401(k)
plan is to wait to even give notice until after the vesting date.
That way, even if you are terminated immediately, you will have
vested. Any earlier than that gives the employer of the option of
terminating immediately, which would prevent you from vesting.
Under California law, "An employee without a written employment
contract for a definite period of time who gives at least 72 hours
prior notice of his or her intention to quit, and quits on the day
given in the notice, must be paid all of his or her wages, including
accrued vacation, at the time of quitting. Labor Code Section 202"
"Paydays, pay periods, and the final wages" State of California (2003)
http://www.dir.ca.gov/dlse/FAQ_Paydays.htm
Since the employer is legally required to discharge their financial
obligation to you on the day you resign if you work for the two-week
notice period, they will typically use that as your termination date.
The termination date nearly always terminates your participation in
benefit plans, thereby preventing you from vesting in your 401(k) plan
on a later date. While employers have the right to credit you with
additional periods of service for benefit vesting purposes even though
you did not earn them, this is typically only done for the most senior
executives of a company.
Furthermore, the employer is under no obligation to allow you to work
for the two weeks notice. They can simply terminate you immediately,
thereby eliminating any further liability for wages and accrued
vacation beyond what you have earned up to the day you gave notice.
"Q. I just gave my employer two weeks advance notice that I was
quitting. Instead of letting me work until the date of my
resignation, he told me that I was discharged, and instructed me to
collect my personal belongings and leave. Upon leaving he gave me a
check for all wages earned up through my last hour of work. Am I
entitled to be paid for the time that I gave notice? Additionally,
when must my final wages be paid?
A. You are not entitled to any wages for the notice period because
you did not perform any work during that period. For the purpose of
wage payments, your employer changed a quit into a discharge, and all
of your earned wages became due and payable immediately at the time he
terminated you."
"Paydays, pay periods, and the final wages" State of California (2003)
http://www.dir.ca.gov/dlse/FAQ_Paydays.htm
For your plan to work, you would need for your employer to agree to
continue to pay you until after January 1, but that would require them
to incur additional liability for wages and accrued vacation beyond
what they owe you already. Since you would not be at work, it seems
doubtful your employer would go for this, but that is how you could
accomplish your objective.
"As a California employer you are right to be concerned about the
termination date for two reasons. First, the employee's eligibility for
unemployment may be affected. Since she resigned and told you her last day
would be June 25th, in most instances she would not be eligible for
unemployment (there are some cases where she might still qualify.) If you
ask her to leave (and stop paying her) earlier than she intended, then you
(the employer) become the acting party and she may be eligible for U/I. If
you pay her through her original resignation date, however, then you have
not changed the conditions of her resignation since her termination date
remains 6/25.
Secondly, in California an employee must be paid for all hours worked and
accrued, unused vacation time within a reasonable time following
termination. The Labor Commissioner generally interprets this "reasonable
time" as within 24 hours for an involuntary term and 78 hours for a
voluntary unless advance notice is provided in which case its generally 24
hours. There is a per day penalty for late payments. So, depending on when
the employee receives her last paycheck, using the appropriate termination
date can be very important. Seems like you could make an argument for using
6/14 as the termination date but I don't think it gains you much.
Personally, I'd make her term date 6/25 since that was the date she's being
paid through, regardless of her last day worked. It provides you with
additional time to make payment and doesn't create U/I eligibility issues.
(Remember to run her vacation accrual and other benefits up through this
term date as well.)"
"Voluntary Quit release dates?" by Nyla Marson (June 16, 1999)
http://www.hrpost.com/forums/hrnet/9906/msg00190.html
You are permitted to use the payment for accrued vacation as
compensation for retirement plan purposes if it meets certain criteria
described in "Using Severance Compensation for a Qualified Plan"
Polycomp (September/October 2005)
http://www.polycomp.net/newsletters/1049630Wood_PolycompRPN_SO05.pdf.
However, this would not affect your vesting requirement.
In conclusion, unless you uncover something unusual in the wording of
your benefits package, the only way you can be assured of vesting
would be to postpone giving notice until after January 1.
Sincerely,
Wonko
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