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Q: California Labor Law - Accrued vacation pay at termination. ( No Answer,   1 Comment )
Question  
Subject: California Labor Law - Accrued vacation pay at termination.
Category: Business and Money > Employment
Asked by: cali38-ga
List Price: $20.00
Posted: 04 Jun 2006 17:58 PDT
Expires: 08 Jun 2006 19:43 PDT
Question ID: 735320
I was laid off and was paid my current year's earned vacation at that
time.  I later found out that employers of employees in CA must pay
any and all accrued vacation pay - section 227.3 of the Labor Code.

My situation is that I have never taken all of my earned vacation over
the years and assumed it was lost because I didn't use it.  This was
for an 11 year period of employment.  Reading the labor code, I see
any unused vacation accruing year to year and adding up.  Assume I
earn 10 days per year.  I use 5 in year one so 5 roll to year 2 so I
then have 15.  I use 5 in year 2 so 10 roll to year 3 so I have 20 and
so on.  When I informed my ex-employer, they said that they only owe
me going back 3 years.  If the vacation days have accrued, wouldn't
all of the unused days from years past accrued to that year that they
want to go back to?

Request for Question Clarification by cynthia-ga on 05 Jun 2006 00:23 PDT
I read the code. It sure sounds to me like they owe you for all of it,
unless there is a cap on it and you agreed in writing.  Reference #5
quoted below:

From Here:
http://www.dir.ca.gov/dlse/FAQ_Vacation.htm

..."
10. Q. What happens to my earned and accrued but unused vacation if I
am discharged or quit my job?
 
    A. Under California law, unless otherwise stipulated by a
collective bargaining agreement, whenever the employment relationship
ends, for any reason whatsoever, and the employee has not used all of
his or her earned and accrued vacation, the employer must pay the
employee at his or her final rate of pay for all of his or her earned
and accrued and unused vacation days. Labor Code Section 227.3. 
Because paid vacation benefits are considered wages, such pay must be
included in the employee?s final paycheck.
 

4. Q. My employer?s vacation policy provides that if I do not use all
of my annual vacation entitlement by the end of the year, that I lose
the unused balance. Is this legal?

   A. No, such a provision is not legal. In California, vacation pay
is another form of wages which vests as it is earned (in this context,
"vests" means you are invested or endowed with rights in the wages).
Accordingly, a policy that provides for the forfeiture of vacation pay
that is not used by a specified date ("use it or lose it") is an
illegal policy under California law and will not be recognized by the
Labor Commissioner.
 

5. Q. My employer?s vacation policy provides that once an employee
earns 200 hours of vacation, no more vacation may be earned (accrued)
until the vacation balance falls below that level. Is this legal?

   A. Yes, such a provision would be acceptable to the Labor
Commissioner. Unlike "use it or lose it" policies, a vacation policy
that places a "cap" or "ceiling" on vacation pay accruals is
permissible. Whereas a "use it or lose it" policy results in a
forfeiture of accrued vacation pay, a "cap" simply places a limit on
the amount of vacation that can accrue; that is, once a certain level
or amount of accrued vacation is earned but not taken, no further
vacation or vacation pay accrues until the balance falls below the
cap. The time periods involved for taking vacation must, of course, be
reasonable. If implementation of a "cap" is a subterfuge to deny
employees vacation or vacation benefits, the policy will not be
recognized by the Labor Commissioner.

In defining "reasonable" in this context, the Labor Commissioner has
taken the position that a worker must have at least nine months after
the accrual of the vacation within which to take the vacation before a
cap is effective. This "reasonable" time allows an employee to take
fully vested vacation at times convenient to both the employee and
employer without forcing an employer to accrue a large vacation pay
(or time) liability.
..."


The code definitely states that all vacation must be paid, not just 3
years worth. Break out your old employee handbook and see what they
say about it.

In my opinion, I'd be looking at the chickens, but not counting them just yet.

How many hours do they owe you for 11 years?

Clarification of Question by cali38-ga on 06 Jun 2006 00:07 PDT
I have read the labor code and understand it.  I am looking for
difinitive direction beyond section 227.3 and the Vacation FAQ
section.  I've looked at that.

Request for Question Clarification by cynthia-ga on 06 Jun 2006 01:03 PDT
The definitive direction to take is simple: if you don't receive
immediate and unquestioning relief from the employer, make a claim
with the Division of Labor Standards Enforcement Division. You can
certainly count on them sorting it out, and they do it for free.

Division of Labor Standards Enforcement
http://www.dir.ca.gov/dlse/HowToFileWageClaim.htm

Note the third bullet down:

? Unused vacation hours that were not paid upon termination of the
employment relationship, e.g., a quit, discharge, or layoff.

Bingo. Your situation is exactly what the Enforcement Division
handles, this is your hard-earned tax dollars at work, and you should
utilize their services.

~~Cynthia
Answer  
There is no answer at this time.

Comments  
Subject: Re: California Labor Law - Accrued vacation pay at termination.
From: joe916-ga on 05 Jun 2006 11:11 PDT
 
Since a "use it or lose it" policy is illegal the vacation would
rollover, so while the claim filing deadline would/could be three
years the vacation time was rolled over until the time your employment
ended. Vacation time is earned, if you work half a year you get half
the yearly amount. There are potential penalties, up to 30 days, for
final wages not paid. I would file with the DLSE, or hire an
attorney(attorney fees could be included in the civil case). Below is
the field office locations.


http://www.dir.ca.gov/dlse/DistrictOffices.htm

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