California law does not require employers to provide paid vacation. But if a California employer does choose to give paid vacation time, state legal requirements apply regarding accrual and compensation. For example, vacation may not be on a “use it or lose it” basis, and all vested but unused vacation is considered earned compensation that must be paid to the employee when their employment ends. Cal. Labor Code section 227.3. These rules apply to any unrestricted paid time off (PTO), including floating holidays and PTO plans that combine vacation and sick time into a single policy.

To avoid these restrictions and increase employee flexibility, many California employers have implemented what are colloquially referred to as “unlimited” vacation plans. In such plans, employees receive vacation time that does not accrue and is not subject to specified limits. Instead, an employee’s use of vacation is conditioned on management approval and business- or performance-related factors (for example, not interfering with business operations, completion of job duties, etc.). However, a recent decision from a California Court of Appeal, McPherson v. EF Intercultural Foundation, Inc. (April 1, 2020), calls into question the legal and practical viability of these “unlimited” vacation plans.
Continue Reading California Court of Appeal addresses “unlimited” vacation policies

The California Healthy Workplaces, Healthy Families Act of 2014 (“Healthy Families Act”) is fully effective July 1, 2015, including the significant potential for class-action liability for non-compliance. It is critical that employers ensure that their sick leave policy is current, given the ever-developing legal guidance. We have created a helpful list of common areas of confusion with this new law.

(1) General Background on the Healthy Families Act

The Healthy Families Act provides sick leave for absences from work for: (1) the diagnosis, care, or treatment (including preventive treatment) of an existing health condition of the employee or the employee’s family member, and (2) the employee being the victim of domestic violence, sexual assault, or stalking. Family member is expansively defined to include children, parents, foster parents, legal guardians, siblings, grandparents, grandchildren, spouses, and domestic partners.

The law requires employers to include information regarding accrual and use of sick leave with their employees’ wage statements. Further, employers must preserve these sick leave records for three years. Moreover, relevant posters and individual notices should have been posted and delivered as of January 1, 2015. New hires must also receive pertinent individual notices explaining their rights under the Healthy Families Act.

(2) Employees Must Provide “Reasonable” Notice.

The Healthy Families Act limits employers to requiring only “reasonable advance notification” of employee use of sick leave. Where unforeseeable, an employer may only require notice when “practicable.”

Continue Reading California Sick Leave To Go into Effect July 1 – Be Aware of These Common Traps