Legal Question in Employment Law in California

Is it legal in California to execute a 'use it or lose it' policy regarding paid time off with no pay out for unused days and no option to roll days into following year?


Asked on 4/27/11, 1:52 pm

1 Answer from Attorneys

Timothy McCormick Haapala, Thompson & Abern, LLP

If properly structured, yes. Vacation time is considered part of your pay, earned as you work and if not paid for vacation, must be paid at termination of the employment relationship. The only "use it or lose it" allowed for vacation time is the employer can have a policy that you don't get more than a certain number of days and then you stop accruing until you use some. PTO is generally a variation on sick time, the only difference being that it can be used for broader purposes. That is legally a perk, not compensation, and therefore can be structured, and lost, however the employer wants. The only limitation is that the policies governing it cannot be revised retroactively, so you have the option of quitting if you don't like the changes.

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Answered on 4/27/11, 2:34 pm


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