April 27, 2020
Unlike paid sick leave, employers are not required to provide vacation or paid time off (PTO) under California law, although many companies do provide such time off. Indeed, other than employer-paid health insurance, vacation is often the most coveted job benefit. Even though California employers choosing to provide vacation leave are subject to laws relating to this leave, they still have considerable control over how and when employees use accrued vacation time.
Employers can control vacation scheduling. For instance, they can require employees to submit vacation requests a certain amount of time in advance, they can have designated “blackout” dates when nobody can take vacation (such as the busy holiday season for retail employees), they can limit or require employees to use vacation in full-day or partial-day increments, and they can limit the number of employees who can be on vacation at the same time.
Employers are allowed to have a reasonable cap on vacation accrual, meaning once employees accrue a certain amount of vacation, they cannot accrue anymore until they use some of their vacation time. Employers can also designate a waiting period at the beginning of employment (such as 90 days) before vacation starts to accrue, and can give vacation to certain groups of employees and not others (such as managers or full-time employees only), so long as they don’t discriminate based on a protected characteristic (such as race, age, or gender). Employers can also modify existing vacation policies if they wish, so long as they do not take away any vacation time that was already earned. [See Henry v. Amrol, Inc. (1990) 222 Cal.App.3d Supp.1, 5 (employer who provides paid vacation is not precluded by either statutory or case law from controlling either scheduling of vacation time or amount of vacation time that may be taken at particular time).]
There are some caveats. Employers must pay employees all unused accrued vacation at the time employment ends, and cannot deduct any advanced vacation they allowed the employee to use before it was earned from the final paycheck. Employers also cannot have a “use it or lose it” policy, whereby employees must use vacation by a certain date (such as the end of the year) or forfeit it, although employers are allowed to pay employees for all unused vacation at the end of the year, and start the vacation accrual process over again the next year.
One question is whether employers can ever force employees to take vacation. The answer depends on the situation.
In general, employers can require employees to use accrued vacation time if they are taking other leaves of absence, such as leave under the Family and Medical Leave Act (FMLA), California Family Rights Act (CFRA), or Paid Family Leave, having the vacation run concurrently with those leaves. Employers can also require employees to use vacation during an employer shutdown, so long as reasonable advance notice is given (which in general should be at least 90 days). [See Division of Labor Standards Enforcement (DLSE) Memorandum from Donna M. Dell, Labor Commissioner, dated May 31, 2005.]
However, for other types of leave, employers are not allowed to require employees to use vacation concurrently with the leave. Employers cannot force employees to use vacation during pregnancy disability leave, for instance (though employees may choose to do so).
Also, the Emergency Paid Sick Leave Act (EPSLA) (part of the Families First Coronavirus Response Act (FFCRA)), under which employees of small employers receive up to two weeks’ paid sick leave for COVID-19 related reasons, forbids employers from requiring employees to use vacation (or other employer-provided leave) before (or concurrently with) taking the COVID-19 related paid sick leave. This EPSLA paid sick leave is in addition to any other form of leave, so employees are entitled to the full amount needed. In contrast, employers can require employees (and employees can choose) to use vacation concurrently with taking the other kind of leave provided by the FFCRA – up to 12 weeks’ paid leave to care for a child due to school or childcare closure for COVID-19 related reasons provided by the Emergency Family and Medical Leave Expansion Act (EFMLEA).
There are some California cases that suggest employers cannot force employees to take vacation leave. [See Church v. Jamison (2006) 143 Cal.App.4th 1568, 1581-1582 (“[W]e are unconvinced that all California employees who earn vacation are subject to an obligation to take vacation”).] These cases have found employers cannot make employees use accrued vacation rather than serving out the term of their employment. [See Kistler v. Redwoods Community College Dist. (1993) 15 Cal.App.4th 1326, 1331-1332 (administrators for community college district could not be legally compelled by district to exhaust their accrued vacation balances by means of forced vacations prior to leaving their contractual position as administrators); Bonn v. Calif. State Univ., Chico (1979) 88 Cal.App.3d 985, 991 (retiring employee was entitled to receive lump-sum payment for accrued vacation time; employer university could not force employee to go on vacation during period immediately before retirement).] These cases concerned situations where the employment relationship was ending (such as a termination or retirement), rather than an on-going relationship where the employee is coming back to work after the forced vacation, so it is unclear if the same ruling would apply.
If you are an employee whose employer is controlling your use of vacation time, Eskridge Law can help.
If you are an employer, Eskridge Law can advise you to make sure you are compliant with the law.
Need more information?
ESKRIDGE LAW may be contacted by phone (310/303-3951), by fax (310/303-3952) or by email (geskridge@eskridgelaw.net). Please visit our website at eskridge.hv-dev.com.
This article is based on the law as of the date posted at the top of the article. This article does not constitute the provision of legal advice, and does not by itself create an attorney-client relationship with Eskridge Law.