Q: I have worked for a company over 20 years and now I am retiring. I never took a vacation the last ten years I worked there. Each year I lost all of the vacation time I did not use. My son told me that is illegal in California. Is that true?
--Need a Vacation (CA)
A: Your son is correct. In California, so-called "use-it-or-lose-it" vacation policies are illegal. Once an employee accrues (earns) their vacation time, they cannot lose it and it must be paid out at the end of employment.
Recent Case Helps Employees
A recent California court decision has fixed a quirk in California law that used to only let employees recover four years of accrued but unpaid vacation time. The court in that decision held that when an employee leaves employment with an employer, he can recover all vacation time he accrued but never received payment for during his employment.
In your case, this is a substantial development, because you can now recover vacation time accrued but not used over the last twenty years.
In addition to your vacation wages, you may be able to recover additional money, such as attorney's fees, interest on your unpaid wages and "waiting time" penalties.
In California, employees whose employer does not pay out all of their vacation pay at the time their employment ends can recover "waiting time" penalties. Under this law, employees can recover one day of wages for each day their wages go unpaid for a maximum of thirty days' additional wages.
Also keep in mind that these are calendar days not workdays. So, over the course of 30 days the penalties would actually equal approximately six weeks of wages.