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Can Your Employer Have a Use-it-or-Lose-it Vacation Policy

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  • 12-14-2016, 10:03 AM
    lawfacts
    Can Your Employer Have a Use-it-or-Lose-it Vacation Policy
    Can an employer in California have a vacation policy that awards employees vacation days at the beginning of the year, and takes away any that are unused at the end of the year?
  • 12-14-2016, 11:36 AM
    Mr. Knowitall
    Re: Can Your Employer Have a Use-it-or-Lose-it Vacation Policy
    In California, once a vacation or PTO day is earned, the employer cannot legally take it away. Thus, a use-it-or-lose-it policy is not going to be lawful.
  • 12-24-2016, 10:42 AM
    mgayle
    Re: Can Your Employer Have a Use-it-or-Lose-it Vacation Policy
    No use-it-or-lose-it policies permitted.
    Under California law, vacation is treated the same as earned wages and vest as the employee performs work. Because vacation is earned proportionally as the employee works, any type of policy requiring employees to lose vacation that has already been earned is illegal under California law.
  • 12-24-2016, 12:07 PM
    Taxing Matters
    Re: Can Your Employer Have a Use-it-or-Lose-it Vacation Policy
    There is at least one exception to the rule that others have noted. While a private employer in California apparently cannot have a use it or lose it policy, the California law does not apply to the federal government. The federal government does have a use it or lose policy for annual leave (but not sick leave) so if you are a federal employee you are subject to that policy, even in California.
  • 12-24-2016, 12:52 PM
    flyingron
    Re: Can Your Employer Have a Use-it-or-Lose-it Vacation Policy
    Indeed. However an allowable procedure is to just PAY the employee for his accumulated leave. Such policies are not inconsistent with California law. So while use or lose is not allowed, use or take it as cash is.
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