California as a state, has no legal tool to force an employer to provide to its employees unpaid or paid vacation time, but if you as an employer wish to establish any policy about it, this is what you have to know.
Paid vacations in California are based on certain labor criteria. They are also considered as a form of wages, therefore vacations are based directly on performed labor. If you, as an employee are entitled to have ten days of vacation per year, after six months of working you will get five days of vacation.
A vacation plan may be provided for any period of time based on the agreement agreed or offered. Once you, as an employee, earn vacation leave, it cannot be taken away by your employer. So in case you didn’t take your vacation days earned in that year, this doesn’t mean that they would be forfeited because a new year will start. However, the employer may place a reasonable cap on vacation benefits- which is allowed. This is to prevent an employee from earning more than planned.
Some employers may have policies regarding a waiting period at the beginning of the employment relationship. These types of rules are not prohibited by the Division of Labor Standards Enforcement (DLSE), since this period of time could apply as a probationary period where the worker does not earn any vacation benefits. These dispositions about the vacation plan will be recognized, only if it is not to avoid the law.
Vacation time may be subject to scheduling and advance notice requirements, this is because an employer is allowed to administer its vacation pay responsibilities. How can this happen? the employer can control when is the best moment for the employee to take vacations and the number of days. There could be also blackout periods in which vacation time may not be used at all.
A Paid Time Off plan or policy doesn’t allow an employer to neglect the law concerning vacations. When an employer places its separate vacation and sick leave arrangements with a program whereby employees are granted a certain number of paid days off each year to be used for any purpose, including vacation and sick leave, the same rules for vacation policies apply to those days. Thus, for example, PTO is earned on a day-to-day basis; earned PTO days cannot be forfeited; the number of PTO days earned and accrued can be capped.
Since paid vacations are considered part of the salary, as we mentioned above, at the time the employment relationship ends for any reason, and the employee has not used all or part of his or her earned and accrued vacation days, the employer has the obligation to pay these days in the employee’s final check. This, unless otherwise is stipulated by a collective agreement.