No federal or state law requires employers to provide paid or unpaid vacation time to employees. Employers can choose to establish a policy or employment contract that provides employees with such benefits.
The rollover policy
- Statutory Provisions Addressing Vacation Pay
Earned vacation time is considered wages. Vacation time is earned as work is performed. (Cal. Lab. Code § 227.3; Suastez v. Plastic Dress-Up Co., 647 P.2d 122, 128 (Cal. 1982).)
- Use-It-or-Lose-It Policy
Prohibited. However, employers may impose a reasonable cap the amount of vacation employees can accrue. (California DLSE: Vacation FAQs).
- Payment of Accrued Vacation on Termination
Earned, unused vacation time cannot be forfeited, regardless of the reason for termination, unless a collective bargaining agreement provides otherwise (Cal. Lab. Code § 227.3).
Employers must pay employees for all accrued or earned vacation upon separation from employment, regardless of the reason for the separation. CA Dept. of Industrial Relations Vacation FAQ.
- Vacation and PTO (Paid Time Off)
In California, vacation and paid time off (PTO) are considered wages.
- Sick Leave
Sick leave is not considered wages. The employer is not required to pay an employee for accrued sick leave upon separation from employment. But most of the employers in California are required to provide employees with up to 3 days of paid sick leave.
Employers may allow employees to accumulate up to 6 days of sick leave per year. Sick leave accrues at the rate of one hour for 30 hours worked. Employers can also allow employees to use only 3 days per year, but any unused days can be carried over to the next year.
Maternity, Paternity, FMLA
- Maternity Leave
In California, maternity leave laws provide women with both unpaid and paid, job-protected time off from work for pregnancy and time after pregnancy, birth, adoption and foster care.
Types of Leave:
Pregnancy Disability Leave
Employees who have disabilities related to pregnancy or the birth of the child are entitled to take up to four months of unpaid maternity leave. Job protection is provided during this type of leave. The leave applies to all female employees of the covered employers (with 5 or more employees), including part-time employees to some extent. No minimum length of service is needed.
Employees that work employer with 20 or more employees are provided with leave up to 12 weeks of Family leave. This applies to both women and men to bond with their children.
Reasonable Accommodation Leave
In some cases, when the other types of leaves are exhausted, employers may be required to provide additional leave for their employees with pregnancy-related disabilities or accommodation so the employee can perform his job.
Paid Maternity leave and employees benefits
Employers are required to maintain employee’s medical benefits during both pregnancy disability-related leave and family leaves.
California’s State Disability Insurance (SDI)
The eligible employees can be provided with partial pay during their leave due to a temporary disability caused by pregnancy or childbirth. SDI program only applies if the employee has a short-term disability. The program provides up to 6 weeks of leave.
Paid Family Leave (PFL)
The Paid Family Leave Act entitles eligible employees to receive partial pay while taking time off work to bond with a newborn baby, newly adopted child, or foster child within the first 12 months of the child’s arrival.
During maternity leave employees are allowed to use any accrued time, including vacation, sick and PTO.
- Paternity Leave
There are three laws regarding Paternity Leave:
Family and Medical Leave Act (FMLA)
California Family Rights Act (CFRA)
The New Parent Leave Act (applies to employers with 20 – 49 employees)
All three laws provide up to 12 weeks of unpaid leave for new fathers.
Jury Duty Leave
An employer is not required to provide employees with paid time off from work for a time for a jury summons or serving on a jury.
An employer may not discharge or otherwise penalize an employee for taking time off to serve as on a jury or trial jury, if the employee, prior to taking the time off, gives reasonable notice to the employer of he or she is required to serve.
An employee may use vacation, personal or compensatory leave, if available, for time taken responding to a jury summons or serving of a jury.
No federal or state law require an employer to provide the employee with paid or unpaid bereavement leave or with time off to organize or attend a close family member’s funeral.
All employers must provide employees with enough time to vote, preferably during the beginning of the end of the employee’s shift. Employers must pay for up to 2 hours of employee voting leave.
Employees who are called into service in the state military or naval forces have the same unpaid leave and reinstatement rights and benefits guaranteed under USERRA. Employees in the U.S. armed forces, National Guard, or Naval Militia are entitled to 17 days of unpaid leave per year for training or special exercises. Employers may not terminate employees or limit any benefits or seniority because of temporary disability (up to 52 weeks). Public employees have special rights of paid leave and retention of benefits under Cal. Mil. & Vet. Code § 395, § 395.01-.05; § 395.1-.5, and § 395.8,-9.
Employers with 25 or more employees must provide up to 10 days of unpaid leave to eligible spouses of military service members when their spouses are on leave from deployment. Employees are required to provide notice.
Please consult your local legal counsel to learn more about California Leave Laws.
To learn more about laws in various countries, check out our Leave Laws page.