California Vacation Pay Laws

California Vacation Pay Laws: What You Need to Know

California vacation pay laws don’t require employers to provide employees with paid vacations – but if you do work for an employer that does offer paid vacations, there are rules in place to help protect your benefits.  These employers must follow certain guidelines because vacation time is considered a form of wages that an employee earns.

What Are the California Vacation Pay Laws?

Under California law, vacation time is a type of wage. Because it’s something you earn, vacation time can’t “expire,” and if you haven’t used your vacation days, your employer must pay you for them when you leave the job.

Related: California wage and hour disputes: Unpaid wages

How Does Vacation Time Work?

Usually, vacation time accrues as an employee works. For example, if your job offers you 30 days of paid vacation per year, you’ll accrue about 2.5 days of vacation time per month. There’s an exception, though: employers can withhold vacation accrual for up to a year for new employees.

Employers are allowed to offer vacation time to some employees but not others, as long as they’re not withholding the benefit from people based on a protected characteristic (such as race, religion or gender). That means vacation time can be reserved for managers, full-time workers or executives and withheld from other employees.

What About Sick Leave?

Sick leave isn’t the same thing as vacation time, and it’s not subject to the same rules. However, employers in California are required to provide a minimum number of paid sick days per year.

Related: 3 things most people don’t know about unpaid wages

What is Use-or-Lose Vacation Time?

California Vacation Pay Laws - Use or Lose DaysSome states – not California – require employees to use their vacation time before it “expires.” If workers don’t use their vacation time, they forfeit it. In California, we’re very fortunate that that’s not the case. Instead, your vacation time is considered a form of wages that you’ve earned – and if an employer says it’s expired, that’s a form of wage theft.

However, you can’t just accrue 10 years of vacation time. Employers in California can place a cap on vacation accrual, which means that once you’ve earned a certain number of days of paid vacation, the employer can stop more days from accruing until you use some of the days you’ve earned. There’s no specific number for a “reasonable cap” under California law.

What About Vacation Scheduling?

Employers can decide when and how employees can schedule time off work, which provides them with some control over the workforce. For example, an employer can require you to submit a request for vacation a certain number of days in advance, set aside “blackout dates” during which nobody can take vacation, and place limits on the number of workers who can be on vacation at the same time. That prevents an entire workforce from taking the holidays off, for example, which could cripple a business.

Related: Minimum wage in Los Angeles

What Happens When You Quit Your Job Under California Vacation Pay Laws?

The law in California says that if you have accrued but unused vacation days when you leave your job – whether you’re terminated or you quit – the employer must pay you for them. Again, that’s because vacation is considered an earned wage. The employer must pay them to you with your final wages, so:

  • If your employer fires you, your final paycheck is due on the spot.
  • If you quit with 72 or more hours of notice, your final paycheck is due when you quit.
  • If you quit with less than 72 hours of notice, your final paycheck is due within 72 hours of the time you quit.

What if You Took Advance Vacation?

California Vacation Pay Laws - Employer RequirementsIf you “borrowed” vacation time from the future (such as when you had only one week of accrued vacation and your employer allowed you to take two weeks on the premise that you’d earn it back over time), your employer cannot deduct that borrowed vacation time from your final paycheck.

Do You Need to Talk to a Lawyer About California Vacation Pay Laws?

If your employer has unlawfully held your wages or otherwise violated your rights under California vacation pay laws (remember, employers do not have to offer you paid vacation time), you may need to talk to a Glendale employment lawyer. Call us at 818-230-8380 or fill out the form below for your free consultation. If you’re entitled to compensation, we can help you get it.


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