California has different laws covering workers’ rights to paid time off for vacation, illness and for certain personal reasons.
Vacation / Paid Time Off (PTO)
There is no law that requires employers to provide paid vacation or personal time off. However, when employer does offer paid vacation or “paid time off” (PTO can be used for any reason–vacation, illness, or other) to its employees, the vacation or PTO that is earned is considered part of employees’ wages and cannot be taken away. Employees typically earn, or “accrue”, vacation/PTO incrementally, with each pay period, even if the employer’s policy says it is earned less often. So, for example, an employer usually cannot wait until the end of the year to grant an employee his/her allotment of vacation for the past year. Also, “use it or lose it” policies are unlawful; that is, employees must be allowed to carry over earned vacation year-to-year and do not lose paid vacation for failing to use it by a deadline. However, employers can put a reasonable “cap” on accrued vacation/PTO, so that an employee stops earning vacation time until the employee uses vacation to bring his/her banked vacation below the cap amount. Upon termination of employment, employers must cash out any unused vacation/PTO and pay it along with the final paycheck.
Paid Sick Time
California law requires employers to provide paid sick leave to employees who work in California for 30 days or more. An employer is required to provide a minimum of three (3) days, or 24 hours, of sick leave per year. An employee can use sick leave to tend to his/her health conditions or those of the employee’s family member, and includes diagnosis, care, treatment, and preventive care. Victims of domestic violence can also use earned sick time in some circumstances. An employee may begin to take sick leave after 90 days of employment. Employees earn paid sick leave incrementally as they work. Wage statements must show how much sick leave was earned during the pay period. As with vacation/PTO pay, employees can carry over unused sick pay year-to-year. Unlike vacation/PTO, employers are usually not required to cash out sick time at termination.
Many cities have expanded employees’ rights to paid sick leave, particularly in the Bay Area.