Vacation Pay & Paid Time Off in California Labor Law

Instructor: Ian Lord

Ian has an MBA and is a real estate investor, former health professions educator, and Air Force veteran.

California defines specific rules for the treatment of paid time away from work such as vacation, holidays, personal days, and sick time. In this lesson, we will also review how a simplified paid time off system works in place of these days.

California Vacation Pay & Paid Time Off

Ray just got his first pay stub at his new job and noticed he has accrued a small number of vacation, sick, and time off days. In the notes at the bottom there is a statement saying that he should refer to the employee handbook for the laws regarding each kind of paid time off since each has different rules. Let's help Ray go over the specific rules that California law sets for different types of paid time off such as vacations, holidays, personal days, and sick days.

Vacation, Holidays, & Personal Days

The State of California does not require employers to grant time off with pay for vacation, holidays, or personal days. Fortunately, Ray's employer recognizes that time off from regular work schedules can be good for employee morale and performance. Vacation time, if offered, must have clear explanations of how time is accrued and how much is available each year. Employers may say when and for how long Ray can go on vacation. One important consideration for Ray to remember is that if he quits or is fired his employer is legally obligated to include the pay for these unused days in the final paycheck.

A holiday differs from vacation in that these usually correspond to celebratory events. At the beginning of the year, Ray's company posts a list of days that employees are not required to report to work but are still paid what they would have otherwise earned that day. In California these days typically include New Year's Day, Memorial Day, Independence Day, Labor Day, Veterans Day, Thanksgiving, and Christmas. Companies in California typically pay one and half to two times an employee's normal wage if they have to work on a scheduled holiday. If Ray were to leave his job sometime in early December for example, he would not be entitled to receive pay for Christmas.

Many employers also grant a limited number of floating holidays throughout the year. This allowance gives Ray an opportunity to take a paid holiday for an event such as his birthday or a religious observation that isn't a regularly scheduled holiday for the company. Time off with pay can also be classified as personal days, but with the important difference that these days legally work the same as vacation time. If Ray's company uses personal days, he accrues these days according to the employer's time off plan and these must be paid out when his employment ends.

Sick Days

With the passage of Assembly Bill 1522, all California employers must have paid sick days. Anyone in the state who works more than 30 days per year is entitled to receive at least one hour of paid sick leave for every 30 hours worked. Under the law, Ray is entitled to take this after 90 days of employment. However, the employer can limit the amount of paid time off taken to 24 work hours or three days per year. Ray can use this time for his own health care treatment or recovery, as well as take the time to care for a family member. If Ray leaves the company he forfeits any unused sick time.

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