California PTO Laws & Vacation Pay – What am I entitled to?

California law does not mandate that employers provide any set amount of paid time off (PTO) or paid vacation days. However, if an employer provides vacation time as a matter of company policy, then you

1. have a right to the allotted vacation time, and
2. must be paid for unused vacation time upon termination.

If your employer fails to reimburse you for your accrual of vacation time, you may be able to recover compensation by filing a claim or lawsuit.

Below, our California labor and employment law attorneys discuss the following frequently asked questions about vacation and paid-time-off pay for California employees:

• 1. Do I have a right to PTO or vacation time in California?
• 2. Can my employer take away my accrued vacation time?
• 3. Can my employer restrict my accrual of vacation time?
• 4. Do I get paid for unused vacation time upon termination?
• 5. Can I sue my employer for unpaid vacation time?
• Additional resources

Under the California Labor Code, an employer is not required to provide vacation time or paid vacation / paid-time-off (PTO).

1. Do I have a right to PTO or vacation time in California?

Under the California Labor Code, an employer is not required to provide

• vacation time,
• personal days,
• holiday pay or
• paid time off (PTO).

However, many employers do provide vacation time as a benefit. Your employer handbook or employment contract should lay out any vacation policies.¹

If your employer does provide PTO or vacation time, the employer has to treat that time like earned wages. Therefore vacation time does not expire, even if you do not use it.² This is true for part-time employees as well as for full-time employees.

Required Time Off

Although California employers do not have to provide vacation time, they are required to provide non-exempt employees meal breaks and rest breaks for work over a certain number of hours.³

Whether you are exempt or not, California employers are also required to provide you with paid sick leave. However, this is not the same as vacation pay.⁴

If you work at least 30 days a year, you are entitled to paid sick days.⁵ Paid sick days are accrued at a rate of not less than one hour per 30 hours worked.⁶

2. Can my employer take away my accrued vacation time?

Since vacation time is treated like earned wages, once you earn your vacation time according to your employer’s accrual rate, you cannot lose it.

Some employers may claim that vacation time is under a “use-it-or-lose-it” policy. However, “use-it-or-lose-it” policies are a violation of California labor law.⁷

An employer can change their vacation policy, but they cannot take away your vacation time once it has accrued under the prior policy.

3. Can my employer restrict my accrual of vacation time?

Employers may place reasonable restrictions on taking vacation time. These restrictions may include:

• A minimum amount of notice to request time off
• Different time-off policies for managers and other employees
• Requiring pre-approval for taking days off
• Mandatory vacation to avoid the accrual of too many vacation days
• A limit on the number of days you can take in a row for vacation⁸
• Vacation “blackouts” or restricted days that are not available as time off
• A waiting period for vacation accrual if you are new, as long as the policy is clearly stated

However, employers may not:

• Place unreasonable restrictions on when you can take vacation
• Impose accrual caps so low that you are prevented from earning meaningful vacation time
• Take away earned vacation as a penalty
• Retaliate against you for taking vacation
• Misclassify you as an independent contractor to avoid giving you benefits
• Omit accrued vacation from your final paycheck

Most importantly, an employer cannot restrict vacation time based on unlawful discrimination. An employer’s vacation policy cannot discriminate due to your:

• race,
• religious creed,
• color,
• national origin,
• ancestry,
• physical disability,
• mental disability,
• medical condition,
• marital status,
• sex,
• age, or
• sexual orientation.⁹

Many employers provide full-time employees with PTO policies as a benefit.

4. Do I get paid for unused vacation time upon termination?

Yes. Upon termination from a job in California, your employer is required to reimburse you for any unused vacation time in your final paycheck.¹⁰ Failure to reimburse you for unused paid time off is like failing to pay you for hours worked or for overtime.

(Note that your final paycheck does not have to include accrued sick days.)

5. Can I sue my employer for unpaid vacation time?

Yes, you can sue your employer in California if they:

• take away your vacation time or
• refuse to pay you for unused vacation time (a PTO cash-out) after you leave the company.

If your employer is cheating other employees as well as you, you may have standing to bring a class action lawsuit.

Moreover, it is illegal for an employer to retaliate against you for exercising your rights under California labor laws. If you get fired because you took vacation you were entitled to under company policy, you may have grounds for a wrongful termination lawsuit.¹²

Additional resources

For more in-depth information, refer to these scholarly articles:

• The effect of paid vacation on health: evidence from Sweden – Journal of Population Economics.
• Vacation Pay: Theory vs. Practice – The CPA Journal.
• Work Hours, Wages, and Vacation Leave – ILR Review.
• Economic Analysis on Attributes of Workers and Method to Take Annual Paid Vacation – Journal of Human Resource and Sustainability Studies.
• Vacation Pay: Theory vs. Practice – Compensation & Benefits Review.

Also see our related articles on California Paid Family Leave (PFL) and “Stress Leave” in California – Are workers entitled to it? Also refer to the Division of Labor Standard Enforcement (DLSE) – Vacation.

Legal References: