Paid vacation leave constitutes a form of wages. Because the right to accrue paid vacation vests as the employee renders services, employees “earn” a portion of their annual vacation accrual each day they work.

Companies should make certain that their vacation policies are clear. In California, employers may not implement “use it or lose it” vacation-time policies, but employers can place reasonable caps on vacation.

Author: Gail Cecchettini Whaley

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