California PTO & Vacation Pay Laws

California PTO & Vacation Pay Laws

Although California law does not require employers to provide paid vacation days or paid time off (PTO), many California companies do offer vacation benefits as a job benefit. If your employer offers PTO, then this is what you need to know about California’s PTO and vacation pay laws.

Are Employers Required to Offer Vacation Time in California?

There is no law in California that mandates employers to provide either paid or unpaid vacation time to its employees. However, in workplaces that do offer vacation time, restrictions are placed on the employer as to how it fulfills its obligation to provide vacation pay earned by the employee. Under the law in California, earned vacation time is considered wages, and upon separation of employment all earned and unused vacation must be paid to the employee at their final rate of pay.

Is It Illegal to Cap Vacation Time Accrual in California?

While California law prohibits employers from instituting a “use it or lose it” policy that forces employees to forfeit accrued vacation time, there are other ways to limit the amount of vacation time that accumulates. One common method is a “cap” on vacation accrual; once an employee reaches the cap, they are no longer able to accrue additional vacation time until some of the accrued time is used.

If an employer sets reasonable cap limits on the amount of vacation benefits it will provide to its employees, and the employee has accrued equal or more than that cap, upon termination of employment the employee is entitled to be paid out such vacation time at their final rate of pay.

Can an Employer Take Away Accrued Vacation Time?

As stated above, California law doesn’t require an employer to provide employees with paid vacation time. But if your employer does offer PTO, then it is illegal for them to take away the vacation time that has accrued, even as a result of the employees misconduct or a violation of company policy.

Can an Employer Restrict the Accrual of Vacation Time?

California employers can generally set restrictions on the way an employee’s vacation time is earned and whether an employee is even eligible for vacation time. An employer can’t deny an employee accrued, unused vacation time upon termination, or it will have violated the law.

Can Employers Legally Dictate When I Schedule a Vacation?

Employers can require you to schedule your vacation time in the form of a specific block or blocks of time. This is allowable so long as it is not used to avoid giving you any earned vacation time. For example, employers might be able to specify that vacation can be taken only during certain times of the year or that employees cannot take more than a certain amount of time off at one time.

However, there are some rules around when employers can say no to vacation requests. For example, an employer cannot deny a request for vacation based on the employee’s race, color, sex (including pregnancy), national origin, age (if the employee is at least forty years old), disability status, religion, or genetic information. If an employer denies PTO or vacation time because of these reasons, they can face a discrimination lawsuit.

Can I Sue My Employer for Unpaid Vacation?

PTO pay is treated like all other forms of compensation if you leave your job. This means that accrued vacation pay must be paid to the employee immediately upon an employer-initiated termination and within 72 hours of an employee’s resignation. If you employer withholds payment of your PTO pay after you leave the job, then you can file a claim for unpaid wages.

Consult with Our Skilled Wage Dispute Attorneys Today

Has your employer refused to pay you for accrued PTO or vacation time after you were terminated, voluntarily quit, or retired? If so, please get in touch with the employment law team at Badame Law Group, APC so that we can use our extensive resources and knowledge of the law to help guide you through this complicated situation. We understand that these cases can be incredibly nuanced, so let us put our skills to work for you today.

For a free case consultation with our legal team, call (949) 393-4249 or contact us online.