California vacation pay and the payment rules relating to California vacation pay has been a hotly contested subject over the past several years for many California labor law attorneys through the courts. California employers have devised intricate vacation plans in California, some of which have been deemed illegal under California labor law.
California Vacation Pay - Is it Required?
In general, employers are not required to provide employees with California vacation pay. However, if a California vacation plan is offered under the employer’s policies, it must be honored and administered under the California vacation pay rules.
When Do Employees Lose Their California Vacation Pay?
Rarely, is the answer. Pursuant to California vacation pay law, if there is a separation from employment, any accrued California vacation pay must be remitted to the employee in accordance with the employer’s vacation pay rules. California employers may not implement a “use it or lose it” California vacation pay policy requiring the employee to lose accrued vacation time if not utilized. A governing case in this area of California labor law is Suastez v. Plastic Dress Up (1982) 31 Cal.3d 774.
Conversely, employers are permitted to place a reasonable cap on further accrual of California vacation pay benefits. The governing case is Boothby v. Atlas Mechanical (1992) 6 Cal.App.4th 1595. Therefore, your employer cannot, for example, state that your 18 days of accrued California vacation pay must be used by the end of the year or your "bank" of vacation time will be reduced to 7 days at the beginning of the new year. However, your employer may enforce a rule that says an employee who has 18 days of accrued California vacation time may not continue to accrue more time until some of these vacation days are used.
When there is a separation of employment, all accrued but unused and unpaid California vacation benefits must be remitted to the employee under Labor Code §§ 201, 202, 227.3. If you have been denied your California vacation pay and feel your employer is in violation of vacation pay policies, our California labor lawyers are available to review your potential claim.
California ERISA Attorneys
Employers may try to avoid the restrictive California law on vacations by attempting to establish a funded plan under the federal ERISA (Employee Retirement Income Security Act) laws. It is common that many of these employers in the state of California do not have plans that comply with the stringent requirements of ERISA, and therefore are in direct violation of California vacation pay laws. If you are unsure as to whether your plan complies with the law, contacting an experienced California ERISA attorney may be a prudent decision to determine your employer’s compliance in the state of CA.
Our California labor law attorneys are experienced in reviewing California vacation pay plans and related claims. If you have California vacation pay policy that you believe violates California labor law, or you have been denied your vacation pay compensation, please contact us for a free evaluation. We are dedicated to representing and protecting California employees with vacation pay disputes against non complying California employers.
