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Vacation time (California)

There is no legal requirement in California for an employer to provide either paid or unpaid vacation time. However, if an employer has a time off/vacation policy, then certain restrictions apply. Under California law, earned vacation time is considered wages, and vacation time is earned/accrued as work is performed.

Vacation pay is accrued (not granted) and can not be forfeited; even upon termination of employment. Employers can place a reasonable 'cap' on vacation and prevent an employee from earning vacation over a certain amount of hours.

Vacation is earned on a day-by-day, week by week, pay period, or some other period basis. Vacation payout for terminating employees with accrued and unused vacation; at the time of termination, must be pro-rated on a daily basis and must be paid at the final rate of pay in effect as of the date of the separation.

'Use it or lose it' policies are not enforceable in CA.

For further information or guidance, please contact your HRO advisor.

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