Vacation and Paid Time Off Laws: California Labor Code Section 227.3

Strictly speaking, under California law, employers do not have to provide employees with vacation.  “Vacation” is a very broad term in California, under Labor Code § 227.3, which includes any form of paid time off (“PTO”) that an employee can use at their discretion (subject to approval, of course) but, unrelated to any specific purpose or event.  As compared with days that are tied to specific holidays or for a specific purpose (e.g., jury duty, etc.).

When employers do provide vacation or paid time off, there are two main ways that employers give employees this time.  Either, vacation time, or paid time off, may be provided all at once, or earned and accrued over a set period of time.  For example, an employer may provide employees with a certain number of vacation or PTO days earned each day.

In California, accrual must be daily because California law views PTO and vacation time as a form of wages.  Once an employee accrues any portion of vacation of PTO time, the California Supreme Court has said that the employer cannot take that time away.  Doing so would be akin to taking away vested wages, earned by the employee.

Therefore, if your employer provides vacation, personal days, or other forms of paid time off, it is important that:

(1) you are allowed to carry over that time from year to year; and

(2) you are paid all of these earned wages at the end of your employment.

While your employer may legally impose a cap on how much vacation or PTO time you are allowed to accrue, an employer cannot force an employee to forfeit these wages.  This includes a forfeiture from year to year, and at the termination of employment.

If you are concerned that your employer has caused you to forfeit your vested vacation wages, or is improperly restricting your ability to use or cash out your vacation or PTO time, contact Vison Legal, Inc., and speak with an employment lawyer who understands vacation, Paid Time Off and leave issues.  Do not allow your employer to forfeit your vested vacation or PTO wages.

Keep in mind that you have a legal right to paid sick leave separate and apart from any vacation or PTO issues.

Employers know that vacation and PTO time are important considerations when employees consider employment offers, Vision Legal, Inc., is here to make sure they follow through on their promises.