Can an employer stop giving vacation pay for full-time employees?

UPDATED: Jun 24, 2015

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Can an employer stop giving vacation pay for full-time employees?

Asked on June 24, 2015 under Employment Labor Law, California


M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 7 years ago | Contributor

Yes, an employer can legally do this. The fact is that vacation time is a discretionary benefit. This means that it is not required to be given under the law. Consequently and employer can cancel this benefit. The foregoing holds true unless there is an employment contract or union/collective bargaining agreement to the contrary. Also, no actionable discrimination must be the reason for the cancellation.

That having been said, under CA law, accrued vacation time is considered as wages that have been earned by, but not yet paid to, the employee. Once earned vacation cannot be taken away. Therefore an employer has to allow their employess to use up what they currently have accrued or it must pay them for the time.

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