Summer Vacations & Time Off Dilemmas

Schools out…for summer! As the weather warms up, people begin thinking more about vacation and in some industries, summer months also result in increased work demands. Many employers are finding themselves trying to balance staffing demands with their employees’ need to take time away to recharge their batteries. Now is a good time to review your employee handbook to see if your policies and procedures around paid time off are clear and easy to understand, by both employees and your management team.

California Law and Vacation

While most employers in the Golden State provide paid time off to their employees, beyond mandatory sick time, there is no legal requirement to provide vacation time. If your company chooses to offer paid vacation (and we highly recommend this) it’s important to have a clear, well-crafted vacation policy that specifies exactly how much vacation is provided, how and when it is accrued, and the maximum amount an employee can save or rollover.

Your paid time off/vacation policy is also a great place to communicate how your company approves time off and the steps employees need to take to request time off.

What if your business wants to designate “blackout dates” throughout the year when employees may not use vacation? No problem. Employers have the right to determine when vacation is taken and how much can be taken at a time to maintain adequate staffing levels.

Unlike other states, California considers vacation a form of wages, so there are some protections in place for your employees, including:

• Employees must be paid for all accrued and unused vacation upon termination of employment
• No “use it or lose it” policies are allowed: unused time must either be allowed to “roll over” or paid out to employees
• Employers can place a reasonable cap on vacation accruals (but it must be at least 1½ times their annual accrual rate)
• Watch how you define floating holidays/personal days. If not worded properly, you may be required to offer the same protections for these “perks” as you do for vacation time.

Combining Vacation & Paid Sick Leave

If your organization has chosen to combine vacation and paid sick leave into a single Paid Time Off (PTO) policy, be aware that additional protections will apply. In this case, all the protections of paid sick leave and vacation apply, meaning:

• All accrued and unused time in the PTO bank is payable upon termination
• California paid sick leave protections apply to PTO, meaning that the employer should not request a doctor’s note for the use of PTO when it is taken for sick leave purposes, and no punitive measures may be taken against the employee for that missed time

If you have any questions about your vacation or PTO policy, we’re here to help. CEA members can download fact sheets on Vacation and Paid Sick Leave, on the HR Forms page,  or consult one of our HR Advisors by email or over the phone at 800.399.5331. Time to update your employee handbook? Purchase our Do-It-Yourself Employee Handbook to lighten your load.