Opinion ID: 4520088
Heading Depth: 1
Heading Rank: 4

Heading: analysis

Text: Wage Act The Wage Act requires an employer to pay “unpaid wages” to an employee who separates from the payroll.4 It defines “[w]ages” to include “fringe benefits, when previously agreed to and conditions stipulated have been met by the employee.”5 The Wage Act further provides that “[p]aid leave, other than earned but unused vacation leave, provided as a fringe benefit by the employer shall not be included in the wages due and payable at the time of separation, unless the employer and the employee or the employer and the collective-bargaining representative have specifically agreed otherwise.”6 [3] In Fisher v. PayFlex Systems USA,7 a majority of this court determined that because the employees in that case could use PTO hours for any purpose, the unused PTO hours must be treated the same as earned but unused vacation hours, i.e., a wage that must be paid upon separation of employment. 2 Williamson v. Bellevue Med. Ctr., ante p. 312, 934 N.W.2d 186 (2019). 3 Professional Firefighters Assn. v. City of Omaha, 290 Neb. 300, 860 N.W.2d 137 (2015). 4 § 48-1230(4)(a). 5 § 48-1229(6). 6 Id. 7 Fisher v. PayFlex Systems USA, 285 Neb. 808, 829 N.W.2d 703 (2013). - 866 - Nebraska Supreme Court Advance Sheets 304 Nebraska Reports DROUGHT v. MARSH Cite as 304 Neb. 860 The dissent identified two difficulties in applying the law to the facts of the case: (1) The Legislature did not define the term “‘vacation leave’” and (2) the employer’s PTO policy allowed employees to use PTO for both vacation and other purposes in the employee’s discretion.8 Although the dissent invited clarification by further amendment of the statute and the Legislature indeed amended § 48-1229 the following year,9 it did not provide any clarification regarding vacation leave or fringe benefits payable upon separation. Where a statute has been judicially construed and that construction has not evoked an amendment, it will be presumed that the Legislature has acquiesced in the court’s determination of the Legislature’s intent.10 Thus, PTO which can be used as vacation leave should be treated the same as earned but unused vacation leave under the Wage Act. Entitlement to PTO Under Agreement The crux of Drought and Fessler’s argument is that Longwells owed them PTO because the employment agreement—which they were required to sign—contained a section concerning PTO. We disagree. [4] The statute imposes three requirements. Under § 48-1229, an appellate court will consider a payment a wage subject to the Wage Act if (1) it is compensation for labor or services, (2) it was previously agreed to, and (3) all the conditions stipulated have been met.11 Here, the decision turns upon the third requirement. Drought and Fessler’s claim fails the third requirement, because they did not satisfy the conditions set forth in the 8 Id. at 824, 829 N.W.2d at 716 (Stephan, J., dissenting; Heavican, C.J., and Cassel, J., join). 9 2014 Neb. Laws, L.B. 765, § 1. 10 Heckman v. Marchio, 296 Neb. 458, 894 N.W.2d 296 (2017). 11 Fisher v. PayFlex Systems USA, supra note 7. - 867 - Nebraska Supreme Court Advance Sheets 304 Nebraska Reports DROUGHT v. MARSH Cite as 304 Neb. 860 agreement. Under the agreement, an employee earned PTO “per 40 hour + week billed.” The agreement specified that earnings were based on billable hours and that an employee will not be considered to have earned billable hours if the employee did not produce an approved timesheet “signed off ” by a client designee. But Drought and Fessler were paid a set salary—they did not have clients, did not have billable hours, and did not submit timesheets. Drought and Fessler attribute significance to the past payment of vacation time. They argue that if billing clients and proving a 40-hour workweek had been required to earn PTO, Longwells would not have paid them for their PTO during their employment. But it appears from the evidence that as salaried employees, Drought and Fessler were paid the same amount each week no matter how many, if any, hours they worked. Drought and Fessler assign that the district court erred in failing to address Longwells’ assertion of a mutual mistake, which they argue does not apply to a unilateral employment agreement. However, the court had no need to do so. Drought and Fessler claimed they were entitled to PTO due to the inclusion of a PTO section in the employment agreement. But because they did not meet the conditions required under the written employment agreement to earn PTO, it is not a wage subject to the Wage Act.12