California Companies Can Impose a Waiting Period on Paid Vacation Accrual

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A California auto detail business required its employees to work for at least 1 year before earning vacation. An employee left after 6 months and received no vacation pay upon his departure. He sued the company, claiming it unlawfully required him to forfeit his accrued vacation pay.vacation

The trial court dismissed the lawsuit because the company’s written policy unambiguously and lawfully stated that employees did not earn vacation during the first year of employment. The California Court of Appeal agreed.

Employee Sues Over Vacation Policy

The written vacation policy implemented by Automobile Creations, Inc., and Dynamic Auto Images, Inc., states:

All employees earn [one] week of vacation after completion of one year [of] service and a maximum of two weeks’ vacation after two years of service. This means that after you have completed your first anniversary with the company, you are entitled to take one week of paid vacation, and after the completion of two years’ service, you will accrue two weeks [of] paid vacation per year. This does not mean that you earn or accrue 1/12th of one week’s vacation . . . each month during your first year. You must complete one year of service with the company to be entitled to

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