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California law does not require that employers provide employees with a minimum amount of paid time off (PTO) or paid vacation days. However, if an employer does provide employees with vacation time as part of their company policy, then the employee has the right to:

  1. Take the allotted vacation time
  2. Be paid for any unused vacation time

Some employers purposely make their vacation and PTO policies confusing for employees in order to deter them from enforcing their rights. All workers in California should understand what the law states about unused PTO and vacation days to ensure their rights are protected, in accordance with California (CA) vacation laws.

Requirements for Time Off in California

Many employers provide vacation days as a benefit for employees. Employers in California are not required to provide:

  • Vacation days
  • Paid time off
  • Holidays
  • Personal days

The only types of paid time off in California that are required are meal breaks, rest breaks, and sick leave. While PTO is not a required offering, many employees do offer it as a benefit. Employers can generally place restrictions on how the vacation time is earned and who is eligible for vacation time. These restrictions may include:

  • A waiting period for vacation accrual for new employees
  • A maximum number of vacation hours or days that you can accrue
  • A notice before requesting time off
  • Different time-off policies for managers versus employees
  • Requiring pre-approval from a manager before taking PTO
  • A limit on the number of PTO days you can take in a row
  • Vacation “blackout” dates that are not available for PTO

However, it is important to remember that an employer cannot restrict vacation time or PTO based on a protected characteristic, as stated in California vacation law and PTO laws. This is considered unlawful discrimination. State and federal laws protect workers from being denied PTO based on:

  • Race
  • Religion
  • Gender
  • Sex
  • Color
  • National origin
  • Ancestry
  • Physical disability
  • Mental disability
  • Medical condition
  • Veteran status
  • Age
  • Sexual orientation

Unused Vacation Time and PTO

In accordance with California vacation law and PTO laws, any unused vacation time and PTO must be treated as wages. This means that it cannot be taken away because an employer is legally required to pay you any wages you are owed, including vacation pay. In other words, once you accrue vacation time, you cannot lose vacation time.

Additionally, all employees are entitled to their unused PTO and vacation days regardless of whether they:

  • Quit
  • Resign
  • Are fired
  • Are laid off

The only difference between quitting and being terminated or laid off is when you are entitled to receive your final paycheck, which should reflect all your final pay period at the final rate of pay up until your last day of work. Your final paycheck should also include unused vacation days or PTO in accordance with the employer’s vacation policies or your employment agreement, as specified by California PTO laws and vacation pay laws.

If you are terminated or quit with at least a 72 hours notice, you are entitled to your last paycheck immediately. If you quit without a 72 hours notice, you are entitled to your last paycheck within 72 hours.

Regardless of when you get your final paycheck, an employer cannot legally have a “use-it-or-lose-it” policy under which an employee forfeits accrued vacation time if not used by an anniversary date. However, an employer can cap or limit the amount of vacation time accrued. This would mean you may have to use a certain amount of PTO before accruing more, as outlined in California vacation law.

  • If your employer fails to reimburse you for your unused vacation time, you may be able to recover compensation by filing a claim or lawsuit against your employer. It is illegal in California for an employer to:

    • Take away vacation time or PTO that you have already accrued
    • Refuse to pay you for your vacation time or PTO in a timely manner when you leave the company

    It is recommended that you hire an employment law attorney for assistance if you choose to sue your employer for violating your employee rights. In some cases, your employer’s policy may even violate California wage and hour laws. This could result in a class action lawsuit involving missing compensation since it resulted in a labor law violation for multiple employees.

Contact a Labor and Employment Law Attorney in California

Employees in California are protected from unlawful retaliation for enforcing their rights to vacation time and unused PTO. If you are unsure what to do when your employer fails to pay you for your earned wages, you should consult with an experienced employment law attorney. The legal team at Shegerian & Associates is standing by ready to review your case for free and advocate on your behalf.

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