What to Know About Your Vacation Pay When You Leave Your Job in California

Published Date: March 22, 2023

As an employee in California, it’s important to understand your rights when it comes to vacation pay upon separation of employment.

In this blog post, we’ll explain what your employer’s obligations are regarding earned vacation pay, so you can ensure you receive what you’re entitled to.

Employers Must Pay Out Accrued Vacation Time Upon Separation In California, employers are required to pay out any accrued and unused vacation time to employees upon their separation from employment, regardless of the reason for the separation. This means that even if you quit or are terminated, you are entitled to receive payment for any unused vacation time you have earned.

Vacation Pay is Considered Wages Under California law, vacation pay is considered wages, just like your regular pay and overtime pay. This means that it must be included in your final paycheck, along with any other wages owed to you. Your employer must pay out the full value of any accrued vacation time at your final rate of pay.

Employers Can Have a “Use-It-Or-Lose-It” Policy for Vacation Time Your employer is allowed to have a “use-it-or-lose-it” policy for vacation time, meaning that you must use your vacation time by a certain date or lose it. However, your employer must provide reasonable notice of the policy to employees, and the policy must be in writing. This means that you should be informed of the policy and know when your vacation time needs to be used by.

Employers Can Cap Vacation Time Accrual Your employer is also allowed to cap the amount of vacation time that you can accrue. This means that once you reach the cap, you will no longer accrue additional vacation time until you use some of your accrued time. Again, your employer must provide reasonable notice of the cap to employees, and the cap must be in writing. This means that you should know what the cap is and how it might affect your ability to accrue additional vacation time.

In conclusion, as an employee in California, you have the right to receive payment for any accrued and unused vacation time upon separation from employment. Your employer must pay out the full value of any accrued vacation time at your final rate of pay, and vacation pay is considered wages. Your employer is allowed to have “use-it-or-lose-it” and accrual cap policies, but must provide reasonable notice and have them in writing. By understanding your rights, you can ensure that you receive what you’re entitled to and make informed decisions about your vacation time.