Effectively Manage Paid Vacations

No California employer is obligated to provide paid vacation time to its workers.  However, such benefit is a common practice, promoting morale and productivity.  Once a company grants paid vacation (for example, one week annually), it is considered an accruing benefit, i.e., an employee earns it gradually throughout the working year.  See, Vacation Pay in California (March 2011) and Requiring Use of Paid Vacation for Unpaid Leaves (August, 2012).

As vacation benefit “accrues” throughout an annual cycle, a worker who ends employment in the middle of that year will have earned his or her proportionate share of the full annual benefit.  On the other hand, under a policy of one week paid vacation each calendar year for full-time workers, an employee who doesn’t take any time off for, say, ten years is going to have ten weeks of pay coming to him or her upon departure.  An employer who neglects to pay the accrued amount on the employee’s departure will be subject to a penalty of as much as one month’s wages.

To prevent large vacation pay accruals, an employer’s written paid vacation policy can put a cap on how much vacation a worker can accrue (for example, 18 months of benefits).  Such a policy will put vacation accrual on hold after the specified amount of accrual time and direct the worker to utilize at least some paid vacation, after which the benefit can begin accruing again up to the specified limit.

Additionally, business does not necessarily go on vacation during the prime months for taking time off.  In order to ensure continued production and service to their publics, employers have the right to manage their workers’ vacation timing, including approval of scheduling and the number of vacation days a given worker may take at any particular time.

Manager thought and care are required.  For example, an employer may not deny vacation time to a worker simply because that person recently returned from a medical disability leave.  Such grounds – unrelated to business production demands — could constitute unlawful retaliation.  In the event management must deny a proposed vacation period or suggest alternative dates, written confirmation of the actual work-related reasons is a very good idea.

Companies should specify the scheduling ground rules in any policy providing such benefits, including a requirement of written requests well in advance of planned vacations and a clear statement that it is ultimately management’s prerogative when and how the company will schedule vacation time.

For further information, please contact Tim Bowles, Cindy Bamforth or Helena Kobrin.

Helena Kobrin

May 10, 2018