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Employer Won’t Pay for PTO? We Can Help.
Are you dealing with an employer who refuses to compensate you for the vacation leave and PTO you have accrued? A Los Angeles employment lawyer can help.
If your employer fails to pay you for the PTO you have earned, they should be held accountable. At Colby Law Firm, we have extensive experience helping clients understand complex employment laws about unpaid wages and will fight for your right to be appropriately compensated for the time off you have worked so hard for.
If you feel your employer has a paid leave policy that does not adhere to California labor laws, contact our dedicated team of Los Angeles attorneys today to learn more about how we can help you. Meet with a Colby Law Firm PTO attorney to receive legal advice and assistance to help you in get the compensation you are owed.
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Paid Time Off (PTO): What Is the Law in California?
California’s rules relating to paid vacation time also apply to PTO. Paid time off typically refers to a combined bucket of paid sick leave and paid vacation time. Employees can use PTO for personal reasons, vacation, or sick leave.
PTO is a form of wages that vests as the employee renders service.
In simpler terms, in California, PTO is like a part of an employee’s paycheck that they earn as they work. It’s considered a type of payment for the work done by the employee. So, employees should get paid for the PTO time they earn when they leave their job.
PTO is considered part of the “employment contract” between the employer and the employee.
This means that when an employee is hired, their employer should outline the terms and conditions of their employment, including details about the employee’s PTO benefits, such as how much PTO they will receive, the accrual process, and when they can take it PTO. Since the PTO benefit is agreed upon as part of the employment contract, the employer must follow the contract terms and provide the employee with the PTO benefits they have earned according to that contract.
“Use it or lose it” PTO policies are illegal in California.
California law considers accrued PTO to be a form of earned wages that can’t be taken from employees without compensation. Employers must allow employees to carry over a certain amount of unused PTO from year to year or pay them for unused PTO at the end of the year. However, employers can put a reasonable cap on PTO accrual.
Paid Sick Leave: How Much Leave Are You Entitled To?
California law requires employers to provide their employees with a set amount of paid sick leave. Generally, the law requires employers to provide employees with at least 24 hours or three days of paid sick leave per year. While the law establishes minimum requirements, employers have the option to provide more sick time off than the minimum required under the law (California’s Healthy Workplaces, Healthy Families Act of 2014).
Local jurisdictions, like Los Angeles County, sometimes have additional paid sick leave requirements. In general, Los Angeles employers must either grant 48 hours at the beginning of each year (or 12 months) or allow accrual at a minimum of one hour for every 30 hours worked.
Paid sick leave is a form of protected time off. But, unlike vacation, paid sick leave is not considered a form of wages. Paid sick leave must be paid at the “regular rate of pay,” meaning that bonuses, commissions, and other non-hourly payments must be included.
Vacation Pay: Is PTO Considered a Wage in California?
Vacations are benefits that employers can choose to offer their employees. But, once provided, vacation is considered a wage that employees earn as they work. So, while the law does not require employers to provide vacation, employers must follow specific rules if they do offer a vacation.
Does California Treat PTO as a Wage?
Yes, Paid Time Off (PTO) is treated as a wage in California. This means that accrued PTO is considered earned wages. Therefore, an employee is entitled to receive the monetary value of their accrued PTO upon termination or separation from their job. California law considers PTO to be a form of compensation for the work performed by the employee. Note, however, that vacation hours must be accrued before they are considered in this way. For example, if the accrual rate set for vacation is two work weeks (ten days) per year, earning one work week (five days) of vacation will take six months of working.
Is "Use It or Lose It" Vacation Policy Legal in California?
No. California courts and the Labor Code prohibit a “use it or lose it” policy, in which employees lose earned vacation if it is not taken by a specific time. After an employee earns vacation, employers cannot take it away. Employers cannot require employees to forfeit accrued vacation for any reason, even if the employment relationship ends. However, employers may place a reasonable cap on vacation accrual.
Can You Cash Out Vacation Benefits?
Yes. In California, employers can choose to offer their employees the option to cash out their vacation benefits. Employers can offer this option on an as-needed basis or allow it only at certain times, such as at the end of the year. Employers can require employees to accept pay each year for vacation time that they accrued but did not take instead of carrying vacation time over from one year to the next. The cash out of vacation time must be at the employee’s current pay rate.
Can Employers Cap Vacation Accrual in California?
Yes. Employers can place a reasonable cap on vacation accrual. Still, they must give employees reasonable time to use vacation before they stop accruing time.
Do You Get Paid for Your Vacation Time If You Quit?
Yes. In California, an employer is required to pay out any accrued vacation not taken if the employee quits. Accrued vacation is paid at the employee’s final pay rate, not at the rate in effect when the employee accrued the vacation.
Holiday Pay: Are You Entitled to Extra Pay for Working on Holidays?
In California, employers are not legally required to give their employees time off for holidays. They are also not required to pay their employees if they get the day off on holiday (time off without pay). However, if an employer does offer paid time off for a holiday, such as Christmas or Thanksgiving, courts have interpreted this as a contractual agreement between the employer and employee. In other words, by offering paid time off for a holiday, the employer is creating a contract with the employee that they will receive this benefit. As a result, if an employer fails to provide the promised paid time off for a holiday, they are breaching the contract with the employee. This means that the employer must compensate the employee in some other way to compensate for the lost benefit, as agreed upon in the contract.
Here are three more common situations which create questions around holiday pay.
01
Extra Pay for Hours Worked on Holidays
In California, no state law requires employers to pay extra wages for working on a holiday. However, some employers may choose to offer additional pay or other incentives for employees who work on a holiday. If an employer offers extra pay for working on a holiday, it’s typically called “holiday pay.” Employers are free to determine their own policies around holiday pay, including the amount of additional pay they will offer if any. It’s important to note that any holiday pay policy should be clearly outlined in the employee’s contract or the employer’s policies and procedures.
02
Exempt Employees Are Entitled to Pay on Holidays
Suppose you are considered an exempt employee (a worker not protected by wage and hour laws). In that case, your employer must pay you on a holiday even if the company is shut down on that day, so long as you are ready, willing, and able to work. Exempt employees who perform any work during the workweek in which a holiday occurs must be paid their full weekly salary, whether or not they work on the holiday.
03
Floating Holidays (Personal Days) Pay Requirements
Employers who offer employees floating holidays (sometimes called personal days) as a benefit must treat them like earned vacation time. However, depending on the employment contract, floating holidays can be considered vested or not. If they are vested, the employer cannot apply a “use-it-or-lose-it” policy and must pay employees for unused days at the end of the employment relationship. Suppose they are not vested and considered along the same lines as traditional holiday pay. In that case, they can be subject to a “use-it-or-lose-it” policy and do not have to be paid at termination.
Medical Leave in California:
Federal Medical Leave Act (FMLA) and California Family Rights Act (CFRA)
In California, there is the California Family Rights Act (CFRA), which is the California equivalent of the federal Family and Medical Leave Act (FMLA). Both provide employees with 12 weeks of unpaid parental leave to bond with a new child. They are also entitled to 12 weeks of unpaid leave in the event of a serious health condition of the employee or their child, spouse, or parent.
In most situations, when an employee takes leave under the California Family Rights Act (CFRA) and the federal Family and Medical Leave Act (FMLA), the 12 weeks of unpaid leave provided by each law run concurrently, meaning they run at the same time. For example, if an employee takes eight weeks of leave under CFRA, they would have four weeks remaining under FMLA. This is because the 12 weeks of leave provided under each law runs simultaneously rather than one after the other.
It’s important to note that there are some situations where the leave provided by CFRA and FMLA may not run concurrently. For example, suppose an employee takes leave under CFRA for a reason not covered by FMLA. In that case, they may be entitled to additional leave under FMLA for a different reason (examples below). Additionally, some employers may have policies that provide additional leave beyond what the law requires.
The only major difference between the two laws was that FMLA applied to pregnancy-related medical issues while CFRA did not. CFRA leave can be used for additional categories of family members – grandparents, grandchildren, and siblings – while FMLA leave cannot. This means employees in certain situations can “double-dip” and obtain 24 total weeks of unpaid leave in a given year rather than just 12. For example, an employee caring for a sibling with a serious health condition could use 12 weeks of CFRA time but still have 12 weeks of unpaid leave under FMLA for use during the same leave year.
Frequently Asked Questions
How Do I Sue My Employer for Unpaid PTO?
In California, PTO (Paid Time Off) is considered earned income. Once earned, vacation and/or PTO cannot be taken away. Earned and accrued paid time off become earned wages and employers can be held liable for violating California employment law regarding this benefit if they fail to pay it. This does not apply to sick leave, however.
There are certain instances in which you may have a claim against your employer involving PTO and vacation time:
• Your employer took away your earned PTO or vacation time.
• Your employer did not pay your unused PTO after separating from the company.
• Your employer’s policy regarding vacation and PTO violates California labor law.
If you did not receive your paid time off, it’s possible that your employer has violated one of the California Labor Laws. This means you may need to legally pursue that employer to receive your pay. Even though the laws are more favorable for employees, they’re still complex. Your chances of being able to prove that you are owed PTO are greater when you have proper legal representation. An expert attorney firm will know how to sue for PTO and can help you.
Are You Entitled to Unpaid PTO When Leaving a Job?
If you are not certain if you are owed your PTO when you leave a job, the short answer is, “Yes! You are entitled to unpaid PTO when leaving a job.”
In California, your employer must pay you all the personal time off that you have accrued whether you were terminated or you initiated leaving the company. This is because PTO is considered earned income. Once earned, vacation and/or PTO cannot be taken away. Earned and accrued paid time off become earned wages and employers can be held liable for violating California employment law regarding this benefit if they fail to pay it.
If you believe you are owed PTO, you should get a free and confidential case evaluation from Colby Law Firm to help you determine what actions are available to you. It is unlikely that your employer will rectify the situation for you unless you have somebody in your corner.
How Do I File a Claim for Unpaid Time or Sick Leave?
If you need to know how to file a claim for unpaid time or sick leave here’s the first thing to be aware of, this can be a difficult area to try and handle on your own. The type of claim you’ll be filing is called a wage claim. If you were not paid your sick leave days or you worked hours that you were not paid for, both issues fall under the wage claim. It is advisable to get legal represenation right away. Employers who are guilty of wage theft are not the easiest to go up against without somebody in your corner. If you believe that you can prove the sick days were not paid or the worked hours were not paid, let Colby Law Firm help you. We will give you a free and confidential case evaluation to help you determine how best to proceed. It is unlikely that your employer will rectify the situation for you unless you have somebody in your corner.
Which Employees Are Eligible for FMLA and CFRA?
The eligibility requirements for FMLA and CFRA are the same for employees. Employees must have worked for the covered employer for at least 12 months and have worked at least 1,250 hours during the 12 months to take leave.
What Are the Reasons an Employee Can Take Medical Leave?
There are three eligibility categories for medical leave. First is parental leave for the birth of a child or the placement of a child with an employee in connection with the adoption or foster care of the child. The second is to care for a child, parent, grandparent, grandchild, sibling, spouse, or domestic partner with a serious health condition. The third reason is an employee’s serious health condition that makes the employee unable to perform the functions of their position, except for leave taken for disability on account of pregnancy, childbirth, or related medical conditions.
How Long Is Pregnancy Leave?
The employee’s health care provider determines the actual time designated as disability related to pregnancy. The maximum amount of time available is four months or 17 1/3 weeks per pregnancy. If an employee is disabled longer than four months, the employee may be entitled to additional leave as a reasonable accommodation for a pregnancy-related or other disability.
How Much Leave Is Provided under the Americans with Disbilities Act (ADA) and the California Fair Employment and Housing Act (FEHA)?
The ADA and FEHA do not limit the amount of leave an employer must provide for an employee with a disability. In general, employers must make reasonable accommodations for employees with disabilities and a leave of absence may be a suitable option. Employers should try to continue providing leave as a reasonable accommodation, unless doing so would be too difficult or expensive. In some cases, a finite leave of absence may be a reasonable accommodation under the FEHA if the employee can return to work afterward.
Mandatory Time Off: How Many Days in a Row Can My Employer Require Me to Work?
Labor laws require that an employer provide a certain number of rest days per week and per month to their employees. If your employer did not follow these guidelines, you may have an employment law case.
Generally, every employee is entitled to at least one day off in a seven-day workweek, and an employer cannot cause an employee to go without a day of rest. Labor Code §§ 551, 552.
Employees are entitled to one day of rest in each workweek; they are not entitled to one day off on a rolling basis for any seven consecutive days worked in a row. Periods of more than six consecutive days that stretch across more than one workweek are not, by definition, prohibited. Mendoza v. Nordstrom, Inc., 2 Cal.5th 1074 (2017).
Employees can accumulate rest days when the nature of employment requires them to work seven or more consecutive days. However, employees must receive rest days equivalent to one day in seven during each calendar month. Labor Code § 554.
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Aaron Colby is a California employment lawyer who knows how to resolve disputes. After 15 years representing companies, he started Colby Law Firm to represent employees. Aaron’s perspective and experience from being “on the other side” gives him an edge. Aaron brings his practical, focused, and relentless approach to helping employees protect their rights.
Aaron Colby
Lead Attorney and Founder Colby Law