California Laws Regarding Vacation Wages
California law considers vacation pay to be wages. Although employers have the right to decide not to give vacation days as a matter of policy, they do not have the right to take away vacation days once they have been earned. If your employer offers vacation days, become familiar with your rights so that you do not lose days or money owed to you.
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Vacation Pay is Optional
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As of December 2010, California law does not require employers to offer either paid or unpaid vacation to employees. Employers set their own policies about vacation pay but cannot violate existing laws. For example, an employer cannot discriminate against members of protected classes in its vacation policy. Employers must put vacation policies in writing and honor those policies. Failure to do so may be considered a breach of contract.
Vacation Pay as Wages
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California law considers vacation pay to be a form of wages. Thus, if an employee earns vacation time and does not use it prior to terminating employment, the employer must compensate her for the unused time. The employer cannot deny the employee his vacation pay at termination regardless of whether the employee is fired, laid off or voluntarily quits.
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Waiting Periods
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Employers may institute a waiting period before employees begin earning vacation pay, such as six months of continuous employment. Employers may also give employees more vacation time for each year of employment. Waiting periods and incremental increases must be genuine. For example, an employer cannot state in his written policy that employees must work for a year before getting vacation and then give some employees double the amount of vacation time in the second year but not the third.
Rollovers
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California law does not allow employers to institute "use it or lose it" policies, in which employees lose unused vacation days at the end of each year. Your employer, may, however, forbid you from taking vacation on certain dates, as long as he allows you to use them at some point, allows them to roll over, or compensates you for them. If an employer does not want to allow vacation days to roll over, she must pay employees for unused vacation days at the end of each year.
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