As many employees celebrate the New Year at home with their families, many other workers are clocking in to begin their shifts.  Employees are often surprised to learn that California law does not require that an employer provide vacation time to their employees.  However, if an employer does provide vacation to its workforce, there are certain important requirements that it must comply with. 

If the employer has established a policy providing for paid vacations, then upon the end of the employment relationship, the employer must pay out as wages, all vested vacation time.  That is, California courts consider the accrued vacation as deferred wages which vest as work is performed.

Employees may not forfeit earned vacation.  For that reason, “use it or lose it” vacation policies are not permissible.  Under a “use it or lose it” policy, vacation time cannot be carried over into a subsequent calendar year, and the employee consequently forfeits vacation time that is not used.  California law is clear – such policies are not permissible.  However, an employer may impose a reasonable “cap” on how much vacation time is accrued. 

Hopefully, you were able to take some vacation time off this holiday season.  But even if you didn’t, you may have earned vacation time nonetheless. 

Happy Holidays!