Michael J. Hays, Partner & Civil Litigation Attorney at Tuesley Hall Konopa, LLPIn Indiana, vacation pay is considered deferred compensation in lieu of wages and is controlled by Indiana’s Wage Payment Statute. Except when it isn’t.

On July 16, the Indiana Supreme Court issued a decision in the case of Comm’r of Labor v. Int’l Union of Painters and Allied Trades AFL-CIO, CLC District Council 91 that delves into some of the vagaries of vacation pay under Indiana law.
The Court confirmed a number of lower court decisions holding that “the default under Indiana law is that an employee who is promised vacation time by his employer is entitled to use that time or save it for use or payment at a later date.” The Court also reaffirmed the principle that a different “arrangement or policy of the employer” can change this default rule.

But like so many employment law issues, the devil is in the details. In this particular case, the power of a union to interpret its own bylaws, rules, and regulations, affected the disputed question regarding the employer’s “arrangement or policy” for some of the employees, but not for one of them. The Court therefore dismissed two of the claims and sent the third one back to the trial court for more fact-finding.

At THK, our attorneys can counsel Indiana employees on difficult questions like this and help prepare clear employment policies that foster prompt resolution of employment issues without making a trip to the Indiana Supreme Court.

Disclaimer: The THK Legal Blog is for informational purposes only and should not be relied upon as legal advice. In no case does the published material constitute an exhaustive legal study, and applicability to a particular situation depends upon investigation of specific facts. You should consult an attorney for advice regarding your individual situation.I