In California, accrued vacation pay is due on termination from employment under wage and hour law

Labor Code section 227.3 provides employees with a right to vacation pay upon termination of employment when vacation is offered in an employer’s policy or contract, according to the Division of Labor Standards Enforcement policy manual.

The leading California case, according to the manual, is Suastez v. Plastic Dress-up Co. (1982) 31 Cal.3d 774.  According to the DLSE manual, vacation entitlements constitute deferred wages which vest as they are earned, so any entitlement to vacation is a proportionate right and vests as labor is rendered.

Vacation pay cannot be forfeited under a so-called “use it or lose it” policy.  Boothby v. Atlas Mechanical (1992) 6 Cal.App.4th 1595, 1601.  However, a cap may be placed on the amount of vacation that may accrue if not taken under certain circumstances. Henry v. Amrol (1990) 222 Cal.App.3d Supp. 1.

The bottom line, sometimes it pays to check with a knowledgeable employment attorney to make sure your pay is in line with the law.

Filed Under Employment, Wage and Hour


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