Many workers have serious questions about their vacation pay and if they are being treated properly by their employers.  Here are a few questions and answers that you might have about your own vacation pay and about what your employer can legally do regarding your vacation pay. 

First, believe it or not,  there is no legal requirement in California that an employer provide its employees with either paid or unpaid vacation time.   However, if an employer does provide vacation pay they have to follow certain rules.   Under California law, earned vacation time is considered wages, and vacation time is earned, or vests, as  you perform your work.   Vacation pay adds up as it is earned, and cannot be forfeited, even upon termination of employment, regardless of the reason for the termination. (Suastez v. Plastic Dress Up (1982) 31 C3d 774)  Employers can place reasonable caps on vacation benefits that prevent employees from earning  too much vacation time.  (Boothby v. Atlas Mechanical (1992) 6 Cal.App.4^th 1595)  Usually, upon your termination,  all earned and unused vacation must be paid to you with your final paycheck at your final rate of pay. Labor Code Section 227.3

Q.   Can your employer make you wait 3 months or even a year before accuring any vacation pay? 

A.    Yes.  An employer can provide a specific period of time at the beginning of the employment relationship during which an employee does not earn any vacation benefits.  This could apply to a probationary, an introductory period,  or can even apply to the whole first year of employment.

Q.   Can your employer exclude you from the vacation plan if you work part-time? 

A.   Yes, an employer’s vacation plan/policy can exclude certain classes of employees, such as part-time, temporary, casual, probationary, employees.  To avoid any misunderstandings in this area, the vacation plan/policy should state clearly and specifically which employee classification(s) are excluded from the vacation plan.

Q.  Can your employer tell you that you have to use your vacation or lose it?

A.   No, this is not legal.  In California, vacation pay is another form of wages.  Acordingly, a policy that provides for the forfeiture of vacation pay that is not used by a specified date (“use it or lose it”) is an illegal policy under California law.

Q.   Can your employer cap your vacation pay so you cannot accure any more vacation days until you use some days?  

A.   Yes, such a provision is legal.  Unlike “use it or lose it” policies, a vacation policy that places a “cap” or “ceiling” on vacation pay accruals is permissible.  Whereas a “use it or lose it” policy results in a forfeiture of accrued vacation pay, a “cap” simply places a limit on the amount of vacation that can accrue; that is, once a certain level or amount of accrued vacation is earned but not taken, no further vacation or vacation pay accrues until the balance falls below the cap. The time periods involved for taking vacation must, of course, be reasonable. It has been repeatedly found that vacation policies which provide that all vacation must be taken in the year it is earned (or in a very limited period the following year) are unfair and will not be allowed.   

Q.  Can your employer tell you when to take your vacation?

A.  Yes, your employer has the right to manage its vacation pay responsibilities, and one of the ways it can do this is by controlling when vacation can be taken and the amount of vacation that may be taken at any particular time.

Employees must know and understand their rights and responsiblities under the law.  If you have been treated unfairly regarding a vacation pay or wage issue we are here to help.  Call us at 310-348-8106 or e-mail us at info@HundleyLawFirm.com  and we will provide you with a free consultation to discuss your rights and how we can help.  

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