California Holiday Pay Law

By Adele Nicholas
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**Outside of government employees, California workers aren't guaranteed paid holidays or vacation days under California law.** However, once an employer in California opts to give workers vacation benefits, there are many regulations about how vacation days must be calculated and paid.

Holiday Pay

Private employers in California aren't legally obligated to give employees paid holidays, close their doors on any holiday, or give employees a day off for any holiday. Moreover, California law does not require employers to pay workers a special or increased rate of pay for working on federal holidays or on weekends, other than the generally applicable rule that employees are entitled to overtime pay whenever they work more than 40 hours in one week.

Government Employees

State and federal government employees in California are guaranteed certain paid holidays. As of 2015, federal law provides 10 holidays: New Year’s Day, Martin Luther King Jr. Day, Washington’s Birthday, Memorial Day, Independence Day, Labor Day, Columbus Day, Veterans Day, Thanksgiving and Christmas. State employees get 11 official holidays, plus one "personal holiday." The official state holidays are: New Year’s Day, Martin Luther King Jr. Day, Presidents’ Day, Cesar Chavez Day, Memorial Day, Independence Day, Labor Day, Veterans Day, Thanksgiving, the day after Thanksgiving, and Christmas.

Earning Vacation

Under California law, if a private employer chooses to provide paid time off, the employer is subject to regulations about how workers' vacation time is calculated and paid. Employees earn vacation time as work is performed. Once a worker earns vacation time, it is considered part of the employee's wages and can't be forfeited. For instance, if a workplace grants workers 10 days of paid vacation per year, after six months on the job the worker has earned a vested interest in five days of paid vacation. That means if the employee is fired or quits after six months, the employer must pay him for five days of vacation at his or her regular rate of pay.

Probationary Periods

California's Department of Labor Standards Enforcement has approved employer policies that provide a probationary period of up to a year at the beginning of employment during which workers do not earn paid vacation days. For example, an employer can put in place a policy that says that it provides no paid time off during the first six months of employment. If an employee is fired or quits during that time, the employer would not be on the hook for paying vacation benefits. California employers are also allowed to exclude part-time, temporary or probationary employees from their vacation plans.

Losing Vacation Time

Once vacation time is earned, it typically can't be forfeited. This means employers can't implement policies that say unused vacation is lost at the end of the calendar year or on work anniversaries. The one exception is that an employer can put a reasonable cap on total vacation benefits earned to prevent employees from accruing paid time off over a certain total amount of hours.

Pay for Vacation Time Earned

The California Labor Code requires employers to pay the employee for all accrued and unused vacation time when the employment relationship ends, regardless of the reason for the termination of employment. This includes situations where the employee stops working because he is fired, quits voluntarily, dies or becomes disabled. Paid vacation benefits are considered wages under California law and all earned vacation pay must be included in the worker's last paycheck. The only exception to this is that a union can bargain for a different arrangement.

About the Author

Adele Nicholas is a writer in Chicago. Since 2003, she has been a contributor to publications including Corporate Legal Times, ChicagoMag.com and InsideCounsel magazine. Nicholas holds a Bachelor of Science in journalism from Northwestern University and a J.D. from the John Marshall Law School.