In most layoff situations, especially these days, the layoff is legitimate and a necessary evil in cutting costs. However, just because an employee has not been wrongfully terminated in a layoff does not mean they have no California employment law rights. One common example is receiving all unpaid vacation pay.
Under California employment laws, once employees have accrued vacation time, they must either be allowed to use it to take time off or have it paid out at termination. This is commonly referred to as California's "no use-it-or-lose-it" rule.
Employees should also be aware that even if an employer calls it "Paid Time Off (PTO)" or a "personal day" instead of "vacation" it most likely must still be paid out. Under California law, vacation pay is defined as any hours an employer provides an employee to take off for any reason.
One example of something which might not qualify as vacation pay is sick pay, which most employers only allow use of when an employee is sick. Otherwise, most forms of PTO is the same thing as vacation pay.
Payment Must Be Made on Exact Termination Date
Whether you are owed accrued vacation pay, hourly wages, salary, commissions, or some other form of wages, an employer who terminates an employee MUST pay ALL money out on the last day of employment-no exceptions.
If this is not done, then an employee is entitled to "waiting time" penalties equal to one day of wages for each day the wages remain unpaid, including weekends and holidays, up to a maximum of thirty days. These issues come into play even where the employer does not dispute that the employee is owed money. For example, if the employer puts the check in the mail or does not pay all of the wages until the next payday, the employee is automatically entitled to penalties from their last day until they actually receive the check.
For example, if your employer does not pay out all of your vacation pay and you make $60,000 per year, after thirty days you would be entitled to approximately $7,000 in penalties even if the vacation is eventually paid out to you.
These are tough times for many laid-off employees. They should make sure they receive all of the wages they are owed, since every dollar counts in making it through their unemployment.
Table of Contents for This Series
- Laid Off? You Still Have Rights! Part 1: Is Something Fishy?
- Laid Off? You Still Have Rights! Part 2: Are You a Statistic?
- Laid Off? You Still Have Rights! Part 3: Get Your Vacation Pay