Accumulated Time Off Pay System Upheld

In an unpublished decision, the U.S. Court of Appeals for the Fifth Circuit upheld the validity of the accumulated time off (ATO) pay system. In the instant case, the employment contract provided that the maritime employee worked for 30 days and was then off work for 15 or 30 days. Part of his pay was deferred so that he was paid during time he was not working.

Plaintiff sued his maritime employer, alleging that he was entitled to interest on deferred wages or that his wages should not have been deferred. The court held the ATO pay system is well-recognized, that plaintiff signed an employment contract acknowledging the system, and that plaintiff had on various occasions withdrawn monies early from his deferment account as permitted under the ATO pay system. Craven v. Canal Barge Company, Inc., No. 04-30379 (5th Cir. - HK Law).