Thus, for example, if an employee is entitled to two weeks (10 work days) annual vacation, and works full-time, eight hours per day, 40 hours per week, in the above example for each week the employee works at least one full day, he or she will earn 1.538 hours of paid vacation, calculated as follows:ġ0 work days entitlement per year x 8 hours/day = 80 hours vacation entitlement per yearĨ0 hours vacation entitlement per year ÷ 52 weeks per year = 1.538 hours of vacation earned per week For example, an employer's policy may provide that an employee will earn a proportionate share of his or her annual vacation entitlement for each week of a calendar year in which the employee either works at least one full day or receives at least one full days' pay during such week. An employer's vacation plan may provide for the earning of vacation benefits on a day-by-day, by the week, by the pay period, or some other period basis. In California, because paid vacation is a form of wages, it is earned as labor is performed. On the other hand, where the employer's vacation plan has a valid "waiting period" provision, employees who separate from their employment during that period will be ineligible for any vacation pay. In those instances where a "waiting period" (Year 1 in the examples above) is found to be a subterfuge, employees who separate from their employment during the "waiting period" will be entitled to prorated vacation pay at their final rate of pay. The four weeks' vacation earned in the second year, when viewed in the context of the two weeks' vacation earned in the third year, makes it clear that two of the four weeks earned in year two are actually vacation earned in year one.Ī valid vacation plan could look like the following: For example, a plan with the following provisions would be an obvious subterfuge and not recognized as valid: Such a provision in a vacation plan will only be recognized, however, if it is not a subterfuge (phony reason) and in fact, no vacation is implicitly earned or accrued during that first year or other period. This could apply to a probationary or introductory period, and can even apply to the whole first year of employment. DLSE's enforcement policy does not preclude an employer from providing a specific period of time at the beginning of the employment relationship during which an employee does not earn any vacation benefits. My employer's vacation plan states that no vacation is earned during the first six months of employment. Labor Code Section 227.3 The California Legislature, in order to ensure that vacation plans were fairly and equitably handled, provided that the Labor Commissioner was to "apply the principles of equity and fairness" in resolving vacation claims. Atlas Mechanical (1992) 6 Cal.App.4 th 1595) And, unless otherwise stipulated by a collective bargaining agreement, upon termination of employment all earned and unused vacation must be paid to the employee at his or her final rate of pay. Plastic Dress Up (1982) 31 C3d 774) An employer can place a reasonable cap on vacation benefits that prevents an employee from earning vacation over a certain amount of hours. Vacation pay accrues (adds up) as it is earned, and cannot be forfeited, even upon termination of employment, regardless of the reason for the termination. For example, if an employee is entitled to two weeks (10 work days) of vacation per year, after six months of work he or she will have earned five days of vacation. Under California law, earned vacation time is considered wages, and vacation time is earned, or vests, as labor is performed. However, if an employer does have an established policy, practice, or agreement to provide paid vacation, then certain restrictions are placed on the employer as to how it fulfills its obligation to provide vacation pay. There is no legal requirement in California that an employer provide its employees with either paid or unpaid vacation time.
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