California Vacation Carryover Request
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FAQ
(5) Caps on Vacation Days: Employers can legally cap how many vacation days you can accrue in California. Employers that choose to offer vacation benefits can cap the number of vacation days that you can bank atfor example5 days, or 10 days.
California employees are entitled to a payout for any unused paid time off (PTO), including vacation time, when they leave their job. The payment amount has to be at his or her final rate of pay. They are entitled to this payout because California treats vacation time as a form of wage.
Vacation time is to be treated like earned wages. Once an employee earns their vacation time according to their employer's accrual rate, they cannot lose the vacation time. In California, an employee's vacation time cannot expire.
Rolling Over Vacation Time In California, use-it-or-lose-it policies are prohibited. Therefore, employers are left with the choice of cashing out employees at year end or allowing them to roll over any unused time.
Accordingly, a policy that provides for the forfeiture of vacation pay that is not used by a specified date ("use it or lose it") is an illegal policy under California law and will not be recognized by the Labor Commissioner.
Rolling Over Vacation Time In California, use-it-or-lose-it policies are prohibited. Therefore, employers are left with the choice of cashing out employees at year end or allowing them to roll over any unused time.
While there's no set number for a permissible cap, the California Department of Labor Standards Enforcement (DLSE) the agency that enforces California wage and hour laws has provided some guidance. In the past, the DLSE has held that a vacation cap could be no less than 1.75 times the annual accrual rate.
In California, an employee's vacation time cannot expire. Some employers may claim that vacation time is under a use-it-or-lose-it policy. However, taking away expired vacation time is a violation of California labor law.
