Blog Layout

Employers: Does Your Vacation Time Policy Violate the Law?

sea and sandWage and hour issues are a common basis for lawsuits filed against employers. One area where many employers get themselves into trouble is how paid vacation is handled. In California, an employee does not have the right to take paid vacation unless the employer has agreed to provide it. While this may seem straightforward, many disputes still arise.

If you provide vacation benefits to your employees, it is crucial that you comply with the law. For example, a California employer cannot implement a “use it or lose it” policy. Once the vacation pay has been earned by the employee, it cannot be taken away. However, an employer is allowed to set a maximum amount of vacation pay that can accrue. It should be noted that while an employer can cap the total amount of vacation pay allowed, you cannot require the vacation time to be used in the same year it is earned.

Another complication can arise when an employee with accrued vacation pay is terminated. In most circumstances, an employer must pay a terminated employee for accrued vacation time as wages at the employee’s last rate of pay.

How do you avoid disputes from arising? The most important step is to draft the vacation policy in compliance with the law. Have it clearly stated and consider covering these topics:

  • Elibibility requirements, including when paid vacation begins to accrue
  • Rate paid vacation time accrues
  • Caps on how much paid vacation time may accrue
  • Whether the employee can take pay for unused vacation time
  • Whether approval must be obtained in advance of using vacation time (detail how much advance notice must be given by the employee)
  • Outline restrictions on when vacation time can be used
  • Describe how scheduling conflicts will be resolved

The above list is only to provide an idea of the areas you must cover in your vacation leave policy. There are numerous other topics that should be addressed and clearly set forth in your employment agreements.

If you have questions about California’s laws governing paid vacation leave or you are facing a lawsuit by an employee alleging your policy violates the law, contact the employment attorneys at The Swenson Law Firm. Call us at 916-333-0833.

Share by: