Reminder to California Employers: Vacation

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Reminder to California Employers:  Vacation

Unlike meal breaks, rest breaks and sick time, California employers do not have to give employees vacation time and if an employer does decide to provide that benefit, there is no specified amount of time required.  But, if the employer does provide this benefit, it must be administered without discrimination and it becomes the employee’s right such that upon termination of employment, unused vacation must be promptly paid to the employee (Labor Code 227.3).

In fact, an employer may require an employee to take time off and use vacation time, cap the accrual of vacation time (Boothby v. Atlas Mechanical (1992) 6 Cal.App.4th 1595) and can specify when an employee takes the vacation time, but the employer cannot take vacation time away.  An employer can also change the company policy to cease employees’ ability to earn vacation.  Vacation restrictions may include:

  •      •A minimum amount of time to request time off;
  •      •Different time-off policies for managers and other employees;
  •      •Pre-approval for taking days off (i.e. the request can be denied);
  •      •A limit on the number of days an employee can take in a row;
  •      •Vacation “blackouts” or restricted days that are not available as time off; and
  •      •When to take the vacation (i.e. shutdown times, like between Christmas and New Year)

But, the employer cannot restrict vacation rights based on unlawful discrimination, like based on the employee’s race, religion, color, national origin, ancestry, physical disability, mental disability, medical condition, marital status, sex, age, or sexual orientation (California Fair Employment and Housing Act 12940 — Unlawful Practices, Generally).

And, while California employers can restrict how vacation time is earned, can limit when an employee becomes eligible for vacation time (i.e. impose a waiting period for vacation accrual or use of  the time for new employees), and can limit when vacation may be taken, employers must remember that earned vacation time is considered earned wages and it must be paid even if the employee does not use it (Minnick v. Automotive Creations, Inc., No. D070555 (Cal. Ct. App. 4th Jul. 28, 2017).  Employers cannot take away earned vacation time or use it as punishment (Labor Code 227.3).  Once an employee earns vacation time according to the employer’s accrual rate, the employee cannot lose the vacation time.  There is no use-it or lose-it in California (Suastez v. Plastic Dress-Up Co. (1982)  31 Cal. 3d 774, 784).  Failure to pay accrued (‘earned”) unused vacation after termination is considered ‘wage theft’ and subjects the employer to a potential lawsuit, or even a class action lawsuit.

It may be time to check your employee vacation policies and update the employee handbook.  If you have any questions regarding employment related requirements, please contact Dawn at:

Information contained in this Memo is intended for informational and educational purposes only and does not constitute legal advice or opinion, nor is it a substitute for the professional judgment of an attorney.  It is considered advertising under laws of some states.  Epps & Coulson, LLP encourages you to call to discuss these matters as they apply to you or your business.

Attorneys admitted to practice in California, New York, Colorado, Texas, and Oregon