Denied Earned Vacation Pay Upon Termination?
Last Updated on January 11, 2022
Attorneys working with ClassAction.org are no longer investigating this matter. The information here is for reference only. A list of open investigations and lawsuits can be viewed here.
At A Glance
- This Alert Affects
- Employees in California who were terminated and did not receive their earned vacation time.
- These employees may be able to file a claim to recover their unpaid vacation time, as well as penalties for their employer's willful failure to pay.
- Employers in California
- Additional Details
- It is illegal under California vacation pay law to refuse an employee earned vacation time upon termination. California law also forbids "use-it-or-lose-it" vacation policies in which an employee must use their vacation days at the end of the year, or be forced to give them up.
- Employees who are fired or let go must receive their earned vacation pay on their last day of employment. Those who quit must be paid their earned vacation time within 72 hours of their final day of work.
California employees who were not paid for earned vacation time upon termination may be able to file a claim to recover these unpaid wages. Under California law, vacation pay is considered "wages." If an employee is fired, quit, laid-off or let go, they must be compensated for their vacation time, as this is earned pay. When an employee is not paid for earned vacation time upon termination, they may be able to file a claim against their employer to recover accrued vacation wages, as well as penalties stemming from their willful failure to pay.
California Unpaid Vacation Time
Under California earned vacation pay law, employees who were fired, let go, laid off other otherwise terminated involuntarily must be paid for earned vacation time on their last day of work. In instances where an employee quits, their vested vacation time must be paid within 72 hours of their last day of employment. The vacation wages must be paid at the worker’s final rate of pay.
By law, employers are not required to provide vacation time to their workers; however, many elect to offer vacation days as a benefit of employment. If an employer elects to provide vacation time, they must comply with applicable laws. It is illegal for employers to:
- Refuse to pay or attempt to take back earned vacation pay
- Employ a "use-it-or-lose-it" vacation policy
- Delay the accrual of benefits until after a probation period
California Use It Or Lose It
In California, “use-it-or-lose-it” vacation policies are in violation of earned vacation laws. Employers who enforce this vacation policy are committing an illegal act and employees who are subjected to such practices may be able to file a claim to recover their lost vacation wages. In California, vacation days are considered earned wages, and therefore must be paid to the employee regardless of whether he or she used them. Learn more about “use-it-or-lose-it” vacation policies.
Class Action Lawsuit: California Earned Vacation Time
Home Depot and other companies in California have already been hit with vacation pay class actions, alleging that they failed to compensate their workers for earned vacation time after employment was terminated. If you were not paid for earned vacation time upon termination, you may also be able to seek compensation for unpaid vacation wages, as well as penalties for your employer’s willful failure to pay. Under California vacation law, it is illegal for any employer to retaliate against those who exercise their employment rights.
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