With the holiday season fast approaching, there’s no time like the present to familiarize yourself with the obligations you as an employer face under California’s employment laws. This article will cover topics ranging from holiday season employer practices, vacation accrual requirements, and other related issues you are likely to encounter as an employer during the upcoming holiday season.
Employer’s Obligations Regarding Holidays
According to the California Department of Industrial Relations (“DIR”), an employer is not required to provide paid time off for holidays, nor does it require employers to provide additional “holiday pay” or extra pay for employees that work on a holiday. Employer’s may treat a holiday as a regularly scheduled workday, and are not required to close their business due to the observance of a holiday. Moreover, it is important to note that there is nothing in the law that requires an employer to pay a premium for work completed on a holiday, other than the traditional overtime premium that is required for work that is performed in excess of eight hours in a single workday, or forty hours in a given workweek.
Employers should also note that providing “holiday pay” or extra pay for employees who work on a holiday is an entirely voluntary choice left to the discretion of the employer. Thus, if you are an employer that seeks to provide holiday pay to its employees, it is important that you take the time to clearly define your company’s holiday pay policies in your employee handbooks and related hiring documents.
Vacation
The DIR also specifies that there is no legal requirement for employers to provide paid or unpaid vacation time. Like holiday pay, the choice of whether to provide paid or unpaid vacation time, and which categories of employees will receive paid vacation time, is solely up to the employer’s discretion. However, if you’d like to provide vacation time for your employees, please take note of the following questions and answers:
Q: How is vacation time accrued?
A: In California, employees earn vacation time in proportion to the amount of time they have worked. Thus, after a certain period of time, they will earn a certain amount of vacation days, to be decided by the employer.
Ex.) An employer may decide that for every 60 days of work, an employee earns 2 vacation days.
Q: Can an employer set a limit on how much vacation an employee can earn?
A: An employer can choose to set a limit on how much vacation time an employee earns, so long as this practice is not part of a “use it or lose it” policy. In addition, an employer can designate certain periods of time during which an employee cannot earn vacation time.
Ex.) An employer can prohibit any vacation time from accruing during a 30-day provisional period immediately after an employee is hired.
Q: Do my employees need to use their accrued vacation time by the end of the year?
A: Vacation time is considered part of an employee’s earned wages, and is earned as work is performed. An employee is entitled to keep their accrued vacation time for as long as they work for the employer for whom they’ve accrued vacation time. Please note that as an employer, you are also prohibited from taking away earned vacation time as a penalty or form of disciplinary action against an employee.
Q: What happens to an employee’s accrued vacation time upon termination or resignation?
A: As an employer, you have the obligation to pay the employee for all unused, earned vacation, at their final rate of pay for all earned and unused vacation days. This requirement stands regardless of whether the employee was terminated or quit. On the contrary, if there is a collective bargaining agreement in place that restricts the payment of unused vacation time, then an employer may circumvent the accrued vacation payment requirements.
How can Rupal Law help you?
As the holiday season approaches, it is important that as an employer you understand your obligation to establish clear company policies surrounding holiday pay, accrued vacation time, and more. Here at Rupal Law, we have the resources to help you craft and design such policies to ensure you are in compliance with California law, to help ease your mind for this upcoming holiday season and guide you through the process of creating the work environment you’ve always envisioned for your company.
For an obligation free consultation, please email us at info@rupallaw.com, or give us a call at (951) 460-0830.
