Vacation pay and paid-time-off (PTO) are great for workers to take time off from work, go on a trip with the family, or take a break without worrying about losing pay. Unfortunately, many workers do not feel comfortable taking their full amount of vacation time, even if it is compensated. Many hourly and part-time jobs do not even offer vacation pay.
Under California employment law, an employer is not required to provide PTO or vacation pay. However, when an employer does provide vacation pay, that pay is generally considered compensation and an employer cannot take it away after it has been earned.
The employment attorneys at Sirmabekian Law Firm help employees get the full compensation they are owed. We know the tactics that employers try to use to limit earned PTO or take away vacation pay when the employee leaves the company. We will use our experience and the law to resolve your unpaid vacation pay issues. You deserve to be compensated for the work and time you gave to the company.
To better understand what it means and what you can do about your employer’s failure to give you vacation pay in Los Angeles, we answer some of the most common questions our clients have, like:
- What are the obligations of an employer for vacation pay?
- Can an employer take away vacation pay?
- Can I take paid time off when I'm sick or taking care of my child?
- What happens if the employer fails to reimburse vacation pay?
- Do you need an employment attorney to represent you in a vacation pay claim in Los Angeles?
This page provides an overview of vacation pay in California and links pages to relevant employment law topics. If you still have questions after reviewing these pages, contact our office to schedule a free and confidential consultation.
A California employer is under no obligation to provide vacation pay. No state in the U.S. requires employers to provide paid vacation or even unpaid time off. Every industrialized country in the world has some minimum amount of paid employee leave, except the U.S. An employee with a full-time position could work 10 years in the same job and have no vacation pay or paid-time-off.
Employer Obligations When Vacation Pay Is Provided
When employers do offer vacation pay, the employer cannot deprive the employee of earned and unused vacation time. Vacation time is considered “wages.” Vacation time is earned over time through employment. Once vacation pay is accrued, it cannot be taken away for any reason, even if the employee is fired for cause.
Under California Labor Code § 227.3,
Unless otherwise prohibited by a collective-bargaining agreement, whenever a contract of employment or employer policy provides for paid vacations, and an employee is terminated without having taken off his vested vacation time, all vested vacation shall be paid to him as wages at his final rate in accordance with such contract or of employment or employer policy respecting eligibility or time served; provided, however, that an employment contract or employer policy shall not provide for forfeiture of vested vacation time upon termination.
Even if an employer does offer vacation pay, it can be subject to reasonable time and cap restrictions. For example, an employer can have a policy that no PTO is earned during the first 6 months of employment. An employer can also offer vacation pay to full-time employees but exclude it from part-time workers.
Vacation accrual can also change over time, which is common for many positions where vacation increases after a period of years with the company. For example, after 1 year of employment, the employee gets 1 week of vacation. After 2 years, the employee gets 2 weeks of vacation, and so on.
Limiting Vacation Time
An employer can put limitations on your vacation schedule. If you earn vacation time, the employer can still restrict when you go on vacation or how much vacation time you can take during any particular time.
For example, an employee has 40 hours of accrued vacation time and tells the employer they booked a vacation to Hawaii in 2 weeks. The employer can tell the employee that they have to work in 2 weeks and any time off requests have to be made 30-days in advance. If the employee takes the vacation, the employer could fire the employee for taking unapproved time off. However, the employee would still have to be paid for accrued vacation time.
Vacation pay is compensation and is treated as compensation in that it cannot be taken away once it is earned. Your employer cannot have a vacation pay policy that takes away vacation pay that is earned, even at a prorated level. If you earned 0.5 days of vacation, you must be compensated for that half-day at your standard pay rate.
It is not legal for an employee that has a policy that PTO is forfeited when an employee leaves the company. This includes forfeiting vacation pay for an employee that leaves voluntarily or an employee that is fired.
Policies that forfeit time off if it is not used by a certain date are also generally illegal. For example, an employer has a policy that any vacation pay not used by January 1 is forfeited. This type of “use-it-or-lose-it” policy is not legal in California.
An employer can put a reasonable cap on PTO or vacation pay. For example, an employer has a policy that no more vacation pay can be accrued once the employee earns 120 hours of vacation until the balance drops below that level. This type of ceiling policy is generally legal, so long as the cap is “reasonable.”
Paid sick leave is different than vacation pay. Generally, vacation pay or PTO is the time taken off for whatever reason. Sick leave is limited to when the employee is sick or to care for a family member. Under California law, employers are required to provide a minimum amount of paid sick leave but are not required to provide vacation pay.
If you are sick or taking care of a child or an ill family member, your employer cannot deny your right to take off accrued sick days. Even after you run out of paid sick leave, you may still be protected from being fired, even if you are not being paid during those days. If you have any questions about paid sick leave in Los Angeles, talk to your employment attorney about your rights.
Failure to reimburse an employee for vacation pay is similar to failure to pay an employee’s wages. An employer who does not provide payment for earned vacation time or who does not include accrued vacation pay in a final paycheck may be subject to an unpaid wage claim.
You can file an unpaid wage claim to get compensation for vacation pay, interest, and reasonable attorney’s fees. In some cases, an employer may have had similar vacation pay violations involving other employees. In this case, the employees may be able to file a class-action lawsuit against the employer.
After leaving a job, your employer may fail to give you your vacation pay. Some workers may not think it is worth it to go back to the employer to fight for their vacation pay. Other workers may not insist on their vacation pay because they don’t want to lose their job. However, it is important to hold the employer accountable and make sure they are following California labor laws.
Employees are protected against unlawful retaliation for enforcing their wage and hour rights, including protecting the employee against harassment, discrimination, demotion, or termination). If you are unsure what to do about an employer who fails to pay out earned vacation time, you can always consult with an experienced employment attorney. An experienced labor law attorney will have the insight, knowledge, and skills to let you know your rights and take the appropriate steps to make sure you get fully compensated for your work.
Contact Sirmabekian Law Firm online or at 818-473-5003 to schedule an appointment to speak with an attorney who has the skills and experience to help make sure you get the best outcome for your vacation pay claim. An initial consultation will not cost you anything and you will be able to get an idea about your rights and options to move forward with your compensation claim.
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