When can an employer require that you lose your vacation pay? The answer is usually never.
Under California vacation pay labor law, when a worker leaves his or her employment, all vested vacation pay must be paid out at the final rate of pay in accordance with the employer’s vacation policies. Along these same lines, an employer cannot have a “use-it-or-lose-it” policy under which an employee forfeits accrued vacation time if not used by an anniversary date. On the other hand, an employer can cap or limit the amount of vacation time accrued.
Some employers can skirt the strict California laws on vacations by establishing a funded vacation plan under the federal ERISA laws. However, some of these employers do not have vacation plans that comport with the requirements of ERISA, and therefore they are in blatant violation of ERISA law. Obviously, an employee would need the assistance of a labor attorney to determine the official ERISA status of an employer.
The Kaufman Law Firm is a Los Angeles labor law firm that’s dedicated to representing employees in disputes against their employers regarding the California vacation pay labor laws. I am an experienced employment lawyer who has had success in numerous trials, arbitrations and appeals on behalf of thousands of employees. I have recovered millions of dollars on behalf of clients in more than 100 class-action lawsuits.