Vacation Pay

Vacations are part of the American experience. If you think about it, we start getting vacations in daycare, in elementary school, and through our entire educational experience. So the concept is engrained in the structure of our lives. So when we enter the workforce, we consider it a given that vacation will be a part of the equation. Unfortunately, this isn’t the case for everyone.

Vacation time, or Paid Time Off (PTO) is not actually a legal requirement of employers. In other words, with all of the protections afforded employees in California, employers are under no legal obligation to offer PTO. Despite this, many companies do offer PTO, because it would be difficult to stay competitive and attract talented employees without some sort of vacation policy. If an employer has a PTO policy for its employees, it then becomes subject to certain labor laws governing how it treats and pays vacation time. Some significant regulations include:

• The ability to “earn” vacation time. Vacation policies generally allow full-time employees to earn vacation time based on a formula tied to some period of time, such as days, weeks, months, or pay periods worked. When vacation time is earned and builds up, or “accrues”, it is legally treated the same as unpaid wages if the employee does not use the vacation.
• Employers can legally implement a probationary period before new employees can earn vacation time. However, this waiting period cannot be a means of depriving an employee of earning any PTO.
• Employers can dictate when an employee can use their vacation time, as well as how much they use at a time.
• A reasonable ceiling can be placed on total PTO that an employee can earn. If the employee hits that maximum amount of accrued, they cannot earn more until they use their vacation time. An employer cannot, however, create a policy that forces an employee to forfeit unused PTO.
• When an employee is terminated or quits, an employer is legally obligated to issue a final paycheck that includes all unused vacation time that has accrued, paid at the employee’s final rate of pay.
• Again, vacation time is treated as unpaid wages. An employer’s refusal to treat it as such opens the employer to a complaint through the Division of Labor Standards Enforcement (DLSE) or a private lawsuit.

The Moss Bollinger law firm stands up to employers who have violated federal and state labor laws. We have built a reputation as smart, confident attorneys who stand by aggrieved employees to hold employers accountable. If you need help, call us. We charge no initial fees and only get paid if you do. Call Moss Bollinger today at (310) 982-2291 for a free consultation or complete our online form.