Whether its going on a trip with your family, or just taking a few days off, everyone needs some time off from work. Wishing your employer provided vacation time? Unsure, if your employer’s vacation policy is legal? You’re not alone. So, what are the rules in California regarding vacation or paid time off?
Employees Legal Rights for Vacation of Paid Time Off
In California, employers are not legally required to provide vacation or paid time off. However, if your employer has an agreement or policy in place for paid vacation or time off, then there are certain conditions that employers must follow. The Division of Labor Standards Enforcement (DLSE) is responsible for the enforcement of labor laws, including an employer’s vacation policies.
What is Vacation Time?
Vacation time is considered a form of wages. As an employee works, vacation time is earned in proportion to how much time an employee has worked and the amount of vacation time an employer offers. For example, if an employer offers two weeks of vacation time per year, an employee has earned one week of paid vacation after working for 6 months. An employer’s vacation policy can designate the intervals in which it is calculated. For instance, it can be calculated on a day-by-day basis, per pay period, or any other reasonable basis.
Amount and Timing of Earned Vacation
An employer has flexibility with certain specifics of their vacation policy. One example of this is that employers are allowed to require a period of time for a new employee to work before they can earn vacation benefits. This is usually referred to as a probationary or introductory period. DSLE has found it reasonable even when this probationary period was the entire first year of one’s employment.
Also, employers are authorized to place a reasonable cap on vacation benefits. A vacation cap is used to provide a ceiling on the amount of vacation an employee can accrue without using it. Once an employee hits this cap, an employee must use their vacation time to get below this cap before they can continue to earn additional vacation time. However, a vacation cap has to be reasonable. For instance, it may not be reasonable if the vacation cap requires an employee to use their earned vacation time in a very limited time period.
While an employer can have a cap in their vacation policy, there are other means of restricting paid time off they are prohibiting from using. One of those is a “use it or lose it” policy. That is, California employers can not have a policy in which an employee forfeits their vacation time if it is not used by a certain date. As previously stated, vacation time vests as a form of wages, and any policy that takes away those earned wages is illegal under California law.
Employee’s Use of Vacation Time
Employers can manage the use of vacation time in a variety of ways. Employers are allowed to control when vacation time is taken and how much can be taken at a particular time. For instance, an employer can have certain peak times when vacation is restricted or limit the use of vacation time to no more than 2 weeks at a time. Employers can also decide to pay an employee for accrued vacation that was not used by the end of the year.
An employer’s rights get trickier when it comes to advanced vacation time. Employers can certainly allow employees to use vacation time in advance of when it is accrued. Since vacation time is considered a form of wages, allowing the use of advanced vacation time is essentially an advance in wages. However, if an employee is terminated or leaves before earning back the vacation time an employer cannot simply deduct those wages from their final paycheck. While it is considered a debt in that it is an overpayment of wages, an employer can not use any form of self-help to recover those debts.
Unused Vacation Time After Employment Ends
Any earned vacation time cannot be forfeited, even upon a rightful termination of one’s employment. That means that, upon termination, an employer must pay an employee, on a prorated daily basis, any earned and unused vacation at their final rate of pay. Any unused vacation time should be included in a former employee’s final paycheck.
Restrictions on Certain Employees
California employers can restrict a vacation policy to exclude certain classes of people, beyond just the probationary period that was discussed earlier. For instance, a vacation plan can be limited to certain jobs (e.g., managers) or only for full time employees. However, these restrictions cannot be made to discriminate against protected classes of people such as a vacation policy targeted at one’s race or gender.
Other Types of Leave
California law requires that employers provide a certain amount of paid sick days per year. However, sick leave does not fall under the same policies as vacation time. However, when an employer has a general paid time off policy that combines vacation time and sick leave, an employer is bound to follow the rules for vacation time in California. That means, among other things, the employee has the right to take these days off (or be paid) for any reason they choose.
Distinguished from vacation or paid time off is paid holidays. Future paid holidays that are tied to a specific event (e.g., New Year’s Day) does not need to be paid out to an employee upon termination of the employee-employer relationship. While personal days cannot be forfeited, paid holidays can.
Remedies for Violations
If an employer violates any of the above requirements, there are remedies for the employee. California’s labor commissioner is given the authority to resolve vacation claims. While you can file a lawsuit in court, it may be easier to start with filing a wage claim with the DLSE for lost wages or whatever appropriate remedy you are seeking. Once a claim is filed a determination will be made as to whether it should be referred to a conference or whether the claim should be dismissed. If a conference is held it will be used to further determine if there is a valid claim and if the claim can be resolved. If there is a valid claim and it cannot be resolved at the conference, it will be resolved by a hearing. After the hearing, the Labor Commissioner will issue an Order, Decision, or Award (ODA) which may be appealed by either party in civil court. If the appeal is made by the employer, DLSE may represent an employee who does not have the financial means to hire an attorney.
If you no longer work for this employer, you can make a claim for a waiting time penalty under Section 203 of California’s Labor Code. The waiting time penalty can be charged against an employer for up to 30 days and is the employee’s average daily wage for each day the penalty is assessed.
If an ODA is issued in an employee’s favor, and there is no appeal, the DSLE will enter a judgment against the employer. This judgment has the same effect as if you prevailed in a lawsuit in civil court. The only difference is, when a judgment is entered, you can either attempt to collect on the judgment yourself or you can allow DLSE to enforce the judgment.
Conclusion
It’s important to understand your rights when it comes to vacation time. While California law may not provide an explicit right to vacation time, it provides several protections if your employer has a vacation plan in place. If you have any questions or your employer has taken action that has impacted your vacation time, you should reach out to an experienced California employment attorney.