Posted on October 19th, 2021
Below is a complete transcript of this video
What’s up fellow entrepreneurs, today I want to talk about vacation time and the potential pitfalls for employers, but first I’m an attorney, but I’m not your attorney. So please seek out competent representation for your specific legal needs or questions.
So it was a pretty good summer in LA. Most things are open again, even in California and as your employees have now mostly returned from their summer vacations, here are some things to keep in mind for the holiday vacations that are coming up and for vacations going forward.
California has some unique rules that apply to vacation time. Some of them can be troublesome for California employers, if not handled correctly today, I want to talk about the most common issue I see with vacation pay, which is employers not understanding that vacation pay is the same as wages earned.
Under California Law vacation is treated the same as earned wages and vest as the employee performs work because vacation is earned proportionately.
As the employee works policies requiring employees to lose vacation already earned is illegal under California law.
In other words, once earned it is the same as pay and cannot be lost, taken back limited or reduced, even though employers can not implement, use it or lose it policies, they can place a reasonable cap or ceiling on vacation accrual because use it or lose it is a forfeiture forfeiture.
Whereas a cap simply places a limit on the amount of vacation that can accrue because vacation time is a form of earned wages.
Vacation must be paid out on the employee’s last day of work. And in other words, just like you have to pay final wages. You also have to pay any unused vacation days with a final check. All right.
So I think all of that is clear. So until next time be productive.
