In our twentieth installment of “Ask a Lawyer” we featured questions from Larry Donahue. He answers questions about Employee Management and NM Expungement.

[Albuquerque Journal: ‘Ask a Lawyer’ Talks to Larry Donahue]

Who is Larry Donahue?

Larry is a seasoned high-tech business executive and 20-year attorney, with a focus in contracts, negotiations, business transactions, intellectual property and Internet law. He has over 20 years of business development and IT consulting experience. His former clients (as a consultant) ranged from small startups to the Fortune 50, including GE Capital, Bank One, IBM and Amadeus.

Read it here

Question 1:

I own a small business here in Albuquerque.   I had an employee quit recently.   Our employee handbook clearly states that vacation time is forfeit upon termination, so I did not pay his unused vacation hours on the final check, despite having almost two years’ worth of unused vacation time accrued.  The employee called me the other day and insisted that I pay him for the unused vacation time he had left, or he would file a complaint with the Department of Workforce Solutions. Is this true?

Are business owners required to pay employees for unused vacation time even if the policy indicates something else?  

Answer 1:

This is a great question! The answer depends on how you distribute paid time off to your employees.

The New Mexico Administrative Code states that vacation pay and other forms of pay for time that is not worked are included in the definition of ‘wages’ if such pay is compensation for labor or services rendered pursuant to the employer’s written policy, see NMAC  That means if your business awards time off on an accrual basis (hours of time off given based on time actually spent working), you may be obligated to pay the balance when an employee stops working for you.  The logic is that an employer can’t “take back” something that has been earned, in much the same way an employer can’t take back money that they have already paid out in an employee’s paycheck for work they have completed.  If paid time off in your company is somehow tied to how much your employees are working, then it is considered a “wage” that needs to be paid out once an employee terminates.

In all employee issues, the handbook does plays a vital role and I applaud you for managing your employees according to the policy outlined in your handbook.  However, the handbook’s effectiveness in protecting you from employee complaints is only as good as how well the handbook’s policies follow the current labor law.  I would recommend sitting down with a Human Resources Advisor to go over your paid time off policy, specifically how the time is calculated and allotted, to see if it aligns with Title 11.  You can also reach out to the Department of Workforce Solutions for their take on the matter. 

If you are, in fact, tying paid time off to hours worked, there are many ways to make sure your employees are taking their earned time off.  First, ensure you are creating an environment where employees feel like they can take time off. It’s not enough to have a time off policy if your corporate culture and/or employee workload and coverage is not able to support it. Send reminders throughout the year to take time off and stress the importance of work-life balance. After all, study after study suggests that a well-rested and happy employee is a productive employee. Periodically review employee balances and send notification to the employee of those balances so they know exactly how much time they need to use before the end of the accrual period. Again, make sure the employees understand and feel like they not only have time off available, but the expectation is that it is used.  This means lead by example.  Let employees see you, the business owner, take vacations and days off here and there.  If despite your best efforts you still have employees that won’t take their time off, appeal to their reasonable side.  Explain that your budgets assume employees are taking time off; not that they take no time off and then reward themselves with a windfall of unused vacation pay on top. 

Another thing to consider is there are other ways to award time off to employees that are not tied to an accrual basis.  Depending on your type of business and structure, you may have options that will not require you to pay out vacation time when an employee terminates.  Again, it would be important to consult with a Human Resources Advisor for ideas.  Remember, every business, every employee and every situation are different.   It’s important to tailor a solution that best fits your situation. 

Last, remember that labor laws and the interpretation of them change.  A fantastic policy book from ten years ago may be out of date and full of policies that the law no longer supports.  Make sure you are regularly “auditing” your employee policies and procedures manual.   An employee handbook that doesn’t follow the law, won’t help you when the Department of Labor comes knocking at your door, no matter how closely you followed the policies within it.     

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Question 2:

I was arrested for DWI a few years ago.   I was barely over the legal limit and I didn’t cause a crash or hurt anyone.  I spent a miserable night in jail, had my car impounded and lost my job.   During the ordeal I showed up at all my court appearances, paid my fines and have since tried to put the whole thing behind me.  I was young and I made a bad decision.  I haven’t had a drop of alcohol since and by all accounts I am a model citizen. However, the mugshot and record of the arrest still looms large on the Internet. So, I can’t seem to ever really put it past me. I used your firm’s online tool to see if I qualified for an expungement under the new law.  Your online tool says I do not.  

I thought the point of the new law was to help people who were arrested and have stayed out of trouble to clean up their records?  

Answer 2:

Before I answer your specific question, let’s add some context to the discussion:  The intent within the new expungement law is to “serve justice”.  Justice is not served by erasing the criminal record of serious criminals or those who may be likely to re-offend.  Alternatively, it also doesn’t serve justice that those who have made a mistake, taken responsibility for it and have avoided trouble since, continue to suffer a criminal stigma indefinitely.  Therefore, our lawmakers strived to create balance between the two when creating this law.  It’s also important to note a few other things about the expungement law.  First and foremost, simply qualifying for an expungement doesn’t guarantee you will get one. The process requires the filing of paperwork and a court appearance.  A Judge must feel confident that when awarding an expungement, justice is, in fact being served; for both the individual and society.  The merits of each case will be taken into consideration. The intent of the new law is not meant to be a “do-over” for everyone in New Mexico who has ever been charged or convicted of a crime.   

So, let’s explore briefly who does qualify to request an expungement, when the law goes into effect on January 1, 2020.  The first category is for those who are the victims of identity theft; meaning that someone has committed crimes using an identity other than their own.  You can imagine how upsetting and frightening it would be to be arrested, denied the right to vote or the ability to take out a loan all because someone stole your information and while posing as you, and broke the law.   The second category are those arrested, but not charged for a crime.   (Records that deal with driving while intoxicated citations maintained by the taxation and revenue department; computer-aided dispatch information and log books relating to breath alcohol testing equipment are not eligible for expungement by the new law.)   The third category of records that are eligible for expungement deal with individuals who were charged with certain criminal offenses.  Providing these individuals served their time, paid their fines and have remained out of trouble since, then, they may be eligible for an expungement after a certain amount of time has passed. 

As mentioned, only certain criminal records are eligible.  Expungement in New Mexico is not available for offenses committed against a child, an offense that caused great bodily harm or death to another person, a sex offense as defined in Section 29-1 IA-3 NMSA 1978, embezzlement pursuant to Section 30-16-8 NMSA 1978 or an offense involving driving while under the influence of intoxicating liquor or drugs.  In your situation, your record is not eligible to be expunged due to the offense being DWI.  While the necessity of the record remaining may seem overburdensome or even cruel in your situation, the passing of time and your diligence to remain out of trouble is the best evidence as to who you truly have become today.

I wish you the best of luck in the future.

Want to see if you qualify for expungement of a criminal record?
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  1. If I was 70% owner of a small business and I closed down my business and my 30% partner started running a business under My MC# DO that come back on me in any way or do I still own 70% of the new business since the MC# belongs to me as a majority owner

    1. Hi, Glenn.

      I apologize for the delay in responding to you.

      The answer is difficult to provide, unfortunately, and depends on the specific rules and regulations around MC# (that I don’t know off the top of my head). If the number is tied to you as an individual, and not the business, then it sounds like your 30% partner could be violating the law, especially if doing it without your permission. You should seek proper advisement, to make sure you have no liability for this, and you should probably take steps to get the partner to stop — otherwise someone may try to argue that you had given some sort of consent.

      Your partner’s use of the MC# really has no bearing on any ownership of his company, unless there is some pre-existing agreement to the contrary.


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