The Kansas Dept. of Labor posted an important victory for the Kansas vacation pay law recently when employees received almost $1 million in unpaid wages from a major corporation.
Former employees of Parsons manufacturing plant recently received a total of more than $950,000 in back wages, penalty and interest in a decision by the Kansas Court of Appeals, according to the Kansas Department of Labor. Parson’s manufacturing plant is owned by the A.O. Smith Corporation, based in Milwaukee.
The 166 former employees argued that A.O. Smith, which has manufacturing and sales facilities across the United States, Europe and Asia, refused to pay them a year’s earned vacation wages when the plant was sold in 2001. This recovery represents the largest single wage recovery since the enactment of the Kansas Wage Payment Act.
Although the employees had accrued vacation time, the employer refused to pay them when it sold the plant in 2001, effectively ending their employment by A.O. Smith Corporation. The workers argued that under the Kansas Wage Payment Act, they were eligible to be paid for unused vacation time. The company argued that under Wisconsin law, they were not required to pay any vacation time. The court ruled, in part, that the Kansas employment laws applied in this case.
The issue was brought to the attention of the Department of Labor (KDOL), which ruled in favor of the employees. “We determined that the company should pay the vacation wages, as well as a statutory penalty for willfully refusing to pay the wages and interest, for a total of more than $800, 000,” said Labor Secretary Jim Garner. “On appeal to the district court, while the ruling on wages was upheld, the penalty was reversed.”
The issue was then appealed to the Kansas Court of Appeals and the Labor Department’s order was reinstated. A.O. Smith’s request to appeal the decision to the Kansas Supreme Court was denied and payment was made for the employees’ vacation pay, penalty and interest.