Yes. Absolutely. Compared to some of the questions employment lawyers deal with this one has a relatively simple answer. That’s not to say, there aren’t nuances (show me a legal answer without nuance, and I’ll buy you a steak dinner). But even the nuances of this question are relatively easy for non-lawyers to grasp.
The simple answer is yes. If your employer has agreed to give you paid time off for vacation, then the unused hours you have at the time you are terminated or quit are legally treated as wages, and must be turned over to you at the time of your separation from the company (typically within 72 hours).
Keep reading to learn a little about the specific details surrounding this question. If you believe your employer has denied you your rightful wages, or has violated California labor law in some significant way, give our office a callto schedule a consultation.
What California Law Says About Paid Time Off
First, the bad news. California employers are not required to offer PTO to their employees. It’s a perk some companies choose to offer their workers. However, if your company does offer it, then there is a law in place that guarantees an employer can’t deny the PTO you’ve accrued at the time you quit, are terminated or are laid off. California Labor Code §227.3states the following:
“Unless otherwise provided by a collective-bargaining agreement, whenever a contract of employment or employer policy provides for paid vacations and an employee is terminated without having taken off his vested vacation time, all vested vacation shall be paid to him as wages at his final rate in accordance with such contract of employment or employer policy respecting eligibility or time served…”Labor Code §227.3
Simply put, if the employer offers paid time off, and you’ve accrued paid time off at the time of termination, you are owed that money just as you would be other wages.
In a perfect world, employers who part ways with their workers would always do the honorable thing and ensure that they pay everything their former employees are owed. But as anyone who visits this site knows, many employers are far from perfect. Companies often use different tactics when attempting to avoid paying their employees their accrued paid time off.
Ways That Companies Try to Get Around Paying What They Owe
1 – Not including PTO in the final check– This is the blunt approach. But regardless of whether a worker is fired with cause, laid off, or quits, an employer is required under California law to issue the final check within 72 hours. Some employers might be of the incorrect assumption that they don’t have to include PTO in the final tally. In worst case scenarios employers know they owe this money, but hope they can exploit the employee’s ignorance to save a few bucks.
2 – Misclassifying Employees as Independent Contractors– Every week we get phone calls from employees who feel they have been misclassified as independent contractors. Companies will often misclassify employees in an attempt to skirt overtime and other labor laws. When determining whether a contractor is in fact an employee, judges consider how much control the company exercises over the workers’ schedule. If your employer offered you paid time off, but denied it at the time of termination because you were classified as independent, you might have some evidence to suggest your employer was exercising control over your hours and you are therefore misclassified. If this sounds like your situation, contact an employment attorney to discuss your case.
3- Docking vacation days as punishment– If you accrued vacation time, you’re entitled to that time as if it were wages earned. Employers can’t take away that time due to performance issues. The only exception is if you have taken unexcused absences. These can be counted toward vacation time.
4- Capping Vacation Time– Employers are allowed to put caps on vacation time. In other words, they can state that an employee is only eligible for a maximum of 10 days’ paid vacation. They are also allowed to institute policies stating when you can take vacation time. But regardless of these rules, if you’ve been terminated or quit, you are entitled to collect the time you have accrued.
5- Use it or Lose it Policies– Some employers might claim that a worker has to use the vacation time they’ve accrued within a specific year or they lose the time at the start of the new year. This is not true. If your employer offers PTO, the time you accrued is yours at the time of termination whether it was earned last week or three years ago. This principal was settled in a 1982 State Supreme Court decision in which an employee was denied his vacation pay for the two years prior to his termination. In its decision, the court wrote:
“Case law from this state and others, as well as principles of equity and justice compel the conclusion that a proportionate right to a paid vacation “vests” as the labor is rendered. Once vested, the right is protected from forfeiture by section 227.3.”Google Scholar
What Can I Do if My Boss Won’t Pay Up?
If you recently quit your job, or were fired, and your employer is trying to deny your rightfully accrued paid time off, you have options. While it might sound surprising to hear this from a legal website, sometimes the option that doesn’t involve a lawyer is the best approach. You might start by informing your employer of the law and reminding them that California employees are entitled to their accrued paid time off.
If you’re owed a small amount of money, you also might try filing a complaint with California’s Division of Labor Standards Enforcement (DLSE).
However, as mentioned in the previous section, an employer who attempts to withhold an employee’s rightful wages, whether out of ignorance or greed, is apt to have committed other violations of employment law. It could be well worth your time and effort to discuss your employment history with an attorney, to determine whether or not there might be a legal case worth pursuing.
But it’s important to remember that employment cases are subject to statutes of limitation. Be sure to talk about your situation with an attorney sooner rather than later. Once the allotted time to file a case runs out, you lose the chance to file your case forever.If you feel your employer has taken advantage of you and violated California’s labor law, contact the office of Branigan Robertson to schedule a consultation.