Learn the legal and ethical considerations for restoring an employee’s leave balances after wrongful termination in this SHRM-SCP certification exam question and answer.
Table of Contents
Question
An employee is reinstated after being wrongfully terminated. The HR director is instructed to ensure restoration of the employee’s full leave accrual balances even though the employee received full payment for all applicable accrued leave balances at termination. Which is true of this request?
Answer
It is unethical and dishonest, but it is not illegal.
Explanation
The request to restore the wrongfully terminated employee’s full leave accrual balances, even though they already received full payment for all applicable accrued leave at the time of termination, is unethical and dishonest, but not illegal.
From a legal standpoint, there are no laws requiring an employer to pay out accrued vacation or leave balances upon termination, unless stipulated by an employment contract, collective bargaining agreement, or state law. So legally, the company is not obligated to pay out leave balances again if they already did so at termination.
However, restoring leave balances the employee was already compensated for would essentially be paying the employee twice for the same accrued leave. This is dishonest and unethical, as it results in the employee receiving an unearned windfall at the company’s expense. It sets a bad precedent and is unfair to other employees.
The most ethical approach would be to reinstate the employee with the leave balances they would have accrued if their employment had continued uninterrupted, minus whatever balances they were already paid out for at termination. This “makes whole” the wrongfully terminated employee without unjustly enriching them.
In summary, while not illegal, restoring already-paid leave balances is unethical and dishonest. The correct action is reinstating the employee with the net unpaid leave they would have earned if continuously employed. The HR director should counsel against the proposed action on ethical grounds.
SHRM Senior Certified Professional (SHRM-SCP) certification exam practice question and answer (Q&A) dump with detail explanation and reference available free, helpful to pass the SHRM-SCP exam and earn SHRM-SCP certification.