Laid Off? You Still Have Rights! Part 3: Get Your Vacation Pay

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.

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

  1. Laid Off? You Still Have Rights! Part 1: Is Something Fishy?
  2. Laid Off? You Still Have Rights! Part 2: Are You a Statistic?
  3. Laid Off? You Still Have Rights! Part 3: Get Your Vacation Pay
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31 Responses to “Laid Off? You Still Have Rights! Part 3: Get Your Vacation Pay”

  1. John V. says:

    What about severence money or bonus money still owed to the employee that got laid off? Is that do at time of everything is turned in or do they have a certain time frame for that money?

  2. John:

    ALL wages must be paid to an employee immediately upon termination, regardless of how it is characterized. I hope that helps.

  3. George S. says:

    Here's my situation...I will be getting laid off somethime today...due to another re-org, this is the 5th re-org since of mid 2008, the company office is located in Ohio, but I work in California and they stated that the do not pay PTO. Can I fight this? I still have about 2 weeks of PTO and 80 Hrs of Vacation time unuse... I have been promise alot during these re-orgs but it never happen...now I'm out of a job. I'm been trying to find out in california law will could back me up to get my remaining PTO. Any help will be appreciated...

    George

  4. Mr. Salgado:

    Thank you for contacting us. Regardless of where your company is headquartered, if you worked in California you must receive your PTO paid out in full. Good luck!

  5. Ted says:

    Hello,

    I worked for a Temporary Staffing company for over a year and my assignment ended due to layoffs at the job. Thru the Staffing company I had over a week of Paid Time Off. When the assignment ended they didn't pay me for the accrued PTO. I have tried contacting the Reps and they aren't returning my calls or emails. Do they owe me the money? How do I go about getting it? Thanks James!

  6. lisa h. says:

    Hello, I worked for AT&T a.k.a. SBC a.k.a. Pacific Bell for seventeen years. On January 1, 2007 I had incurred four full weeks of vacation, six paid days off, one unpaid day off and three hours of religious time. Prior to 1/1/07, I returned to work from a work-related short-term disability and on modified duties of working four hours beginning 12/4/06-1/1/06. I notified my employer on 12/4/06, 12/22/06 and 12/29/06 that I would be resuming my regular duties of working eight hours beginning 12/2/07 via fax. On 12/22/06 I requested vacation time starting 1/2/07-1/5/07. On 1/12/06, I received my check and was only paid 16 hours for vacation time of the thirty-two hours I was originally granted and earned for the year. I am still owed a remaining 16 hours of vacation entitlement from 1/2/06-1/5/06. Am I entitled to it, and how do I go about getting it?

  7. Ian says:

    ADP processes our payroll checks. They calculate the daily rate of pay for vacation pay-outs (for employees who are laid off) on a 365-day year. This doesn't seem right since we do not work 365 days a year. The monetary difference between the outcomes of both methods of calculation can be substantial.

    There are examples on the Department of Industrial Relations website that calculate the final daily rate of pay based upon 52 weeks a year and 5 working days a week (260 days).

    There is nothing in our employee handbook that delimits how vacation is paid out upon termination.

    So the question is how is the "final rate of pay" calculated...based upon a 365-day year or a 260-day year.

    Many thanks!

  8. Vic S. says:

    Here's my situation: I am being terminated by my employer which is based in New York. Company policy on vacation pay is use-it-or-lose it. Although I was entitled to four weeks' off each year, I took far less than this because of resistance from my supervisor. Now, I'd like to know the best way to pursue unpaid vacation days that stretch back eight years. Thanks.

  9. Ann Le says:

    Just wanted to comment on how useful your information is, especially during a time of rising unemployment. Keep it up!

  10. Frank Cordova says:

    Here's my situation: Recently, fellow employees who have been laid-off were given an estimated date within a few months from now in which they may be brought back if business circumstances improve. As such, they were told that their accrued PTO time will be paid out to them on that date if re-employment was not possible. Can an employer lay you off and delay PTO payment for more than 30 days in hopes that the business will improve? Will hopes of re-employment negate penalty fees altogether?

    And finally, what if the company files for bankruptcy? Are employers still entitled to pay out PTO time (for pending pay-offs to those laid off as well as current employees) if they do file?

  11. Charles K. says:

    I'm still a bit confused about the vacation issue. I just left a company after 32 years. The company allowed me 20 vacation days per year. I have records dating back to 1990 showing that I never took more than 10 days off per year. (The average was 7 days per year).
    My question is, how far back can I go to claim unpaid vacation pay?

  12. Great advice - I was not sure about asking for vaca time, but now I will. Thanks!

  13. Great post James. In these difficult time, more and more of us are learning about this the hard way.

  14. Josh says:

    My wife is a Salaried employee with her company. Every year, beginning last year, she gets laid off for 5 weeks starting in Aug, going into Sept. This year her last day happened to fall on a Monday, one day into the new week. Because of this, we can not collect unemployment for that week, (MI, unemployment weeks are Monday to Sunday I believe).

    Is there any way to get paid for that week, because essentially we are losing out on that whole week. As a salaried employee, can my wife expect to be paid for the whole week from her employee? Or can we get paid unemployment at a prorated amount for the six day work week?

  15. Actually, you can go back as far as you wish. See our previous post on the subject for more information.

  16. Jane says:

    I was layed off in April. I worked for a very small company, only 3 of us including the boss who was the owner. I was a office manager. I came in on time every day, stayed late many nights, went beyond the call of duty. I knew the company was in trouble. I did the scheduling of clients and we were down from 125 clients last year to 41 when I was layed off. My boss said for me not to take this personally, it was a business decision. He was having trouble maintaining my salary. He told me I would be able to collect unemployment. I did collect unemployment for a short time, then I received a letter from unemployment saying that I may have been discharged or suspended from work for "willful misconduct"! I was so scared. I called unemployment and they explained to me that my boss had let me go for poor workmanship! Now I had to prove that was not true, and I did. I contacted clients and some of the companions that I had placed and explained the situation to them They all wrote very nice letters stating what a great job I did ect... I actually drove around to their homes to pick up the letters and then I sent them to unemployment. I won! My boss had to prove to them I had poor workmanship. He never wrote me up, never said I was doing something wrong, never had a raise in 3 yrs and never had a job review ever!
    But then I had gone on a interview and the HR woman called my boss as I was sitting there and asked him if he would rehire me back, his reply was a big fat NO! Here is a man that I worked side by side for 3 years, handled the office by myself when he wasn't able to come in, when he took vacations ect.. If I was such a bad employee, why did he leave me run the office by my self? Some weeks it would be for 1-3 days straight.
    I am now afraid that if another employer calls him for a reference, he may keep saying no to a rehire. I though there may be a way to sue him for wrongful termination, but I wasn't able to find any informatin that is similar to my case. And I hear it is quite expensive.

  17. Tracy says:

    Hello-
    My dad's boss passed away on November 22, and the family told my dad on November 30 that they would be closing the shop on December 3, and that would be his last day of work. They told the other mechanic to go home on November 30 without his paycheck. Yesterday, December 3 they gave my dad his last paycheck, but only gave him two days of vacation pay, when as of February he would have ten total vacation days accrued. Who do we contact? I was told to start with the Department of Labor.
    Thank you,
    Tracy

  18. Apryl says:

    Hello,

    I was on a medical leave when my employer cited the 50 or fewer protection clause for leave of absence, laid me off. Technically I was paid by a larger company with 200 employees. Since being laid off and receiving severance, the company now refuses to pay my accured vacation (20+ days). The HR VP told me that the owner of the company views the pay received during the leave of absence (no paperwork filed) as vacation pay and I have no remaining vacation left. None of the severance checks received indicate vacation pay.

    I fully expected to receive vacation pay following the receipt of the last severance check in November...by the way, the company reduced my payrate by 50% while paying severance in addition to changing my tax status so that they wouldn't have to write a larger check to include appropriate taxes.

    MY QUESTION...Am I entitled to receive my accrued vacation?

  19. stephen B. says:

    What steps do i have to take to claim the vacation money as well as the money due from penalties?

    I was laid off 11/30/2009 and have still not received my vacation time OR my expenses. Furthermore my boss was threatening to take me to small claims court for $2000.00 I was given to move and begin work in the city he is located.

    It has been really rough on my wife and I, and I want to claim any money I can to pay our bills.

    I am in California.

  20. ronda k. says:

    What about in the state of florida? my boss came in one morning and was confronted by 1 emp. about his alcohol use while seeing patiences, flipped out told everyone he was done and let us go. i have 5 weeks of vaction, that i was never allowed to take, my sister has 12 wks. not to mention unpaid comm. if i call file a lawsuit against this man, i have several people that want to be on it also.

  21. I apologize, but this blog only deals with California law. None of our attorneys are admitted to practice in Florida, but I suggest you start your search at http://www.nela.org for an employee-rights attorney in your area.

  22. Gracie says:

    Hello-
    My dad's boss passed away on November 22, and the family told my dad on November 30 that they would be closing the shop on December 3, and that would be his last day of work. They told the other mechanic to go home on November 30 without his paycheck. Yesterday, December 3 they gave my dad his last paycheck, but only gave him two days of vacation pay, when as of February he would have ten total vacation days accrued. Who do we contact? I was told to start with the Department of Labor.
    Thank you,
    Tracy

  23. Ally says:

    Does an employer get fined for violating labor laws such as not paying in full a laid off employee? It seems as though the can just go ahead and lay one off with out pay and not have a consequence for it. Does anyone know?

  24. Lila says:

    I moved to Cali from NY for a job that was presented as a growth opportunity. After 6 months I was laid off and told that they were out-sourcing the work I did for the company. I received vacation pay but no severance. I changed my life and used my savings to move to Cali (they did not pay me relocation expenses) and now was laid off by the company I did this for. What are my rights here? The contract stated at-will employment.

  25. David Jonson says:

    An employer has listed a commission salesperson who works in the store, has a desk, waits on customers and with regular in store schedule as an outside salesperson, what rights does this employee have in California. The employee handbook states all in store employees will recieve vacation pay of which this employee has not received anything over 17 years. Does this employee have any claims to this pay? Is this employer under any violations for miss stating his employees for monatery advantages

  26. Tina says:

    I have a question, I have not been terminated but the comoany sold and I have not been paid for 2 months and I'm also Pregnant, so what and how can I get them to pay? The company its based out of Brazil I work in the USA so what can I do? I also wanted to know what are they to pay me if the want to let me go now that I'm pregnant.

    Thank You.

  27. Bill Jack says:

    My question is similar to Frank's above:
    http://www.calemployeerightsblog.com/2008/12/02/laid-off-you-still-have-rights-part-3-get-your-vacation-pay/comment-page-1/#comment-30280

    Myself and approx. 35 other employees have just been laid off and received our final regular paycheck with no payment for accrued vacation, sick pay or personal days. We have filed with the labor board for this. Our former employer stated that we are laid off, but not terminated and said we might be back to work in 90 days if they can make major improvements to their store and reopen it. There is no actual return to work date.

    My question: Is there a difference in types of layoffs, fixed or indefinite that precludes them from abiding by the California Labor Code that requires all pay due within 24 hours?

    If we are still employees and not actually terminated, as the employer stated, should they not continue our benefits?

    Thank you for your prompt response.

  28. Lisa says:

    My roommate was laid off or let go yesterday. He starts work at 5:30 or 6AM. He was on salary so start time varied. He was LET GO at approximately 11am yesterday so is he entitled to pay for that day, being his so called last day??? He did receive a final check...and yesterday was NOT included. What should he do???

  29. Bill says:

    My worksite is closing and will not be paying out owed PTO because they don't have the money. What happens if PTO not paid and busines has been dissolved?

  30. Marie says:

    I was laid off and noticed, my photo & bio still on site 3 weeks after the last day of pay. There are only 10 other bios on site, so this is not a large company but a small one which was bought by a huge company. Should I be paid for the days they left my bio up on their site?

  31. Caliworker says:

    I was pulled in by my immediate supervisor and told that effective June 1 I will no longer have a job. They are taking my job and turning into two part time positions so they don't have to pay benefits and can pay the new people less. Is this legal? I am the only one in the company that this is happening to.

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