Court of Appeal Holds That Some Employees Do Not Get Vacation

This seems evident to me, but it's surprising how many employees think that employers must provide vacation time. In Owen v. Macy’s Inc. (June 29, 2009, Second District, Div. Two), the employer had a policy that new employees would not earn vacation time during their first six months of employment. After termination, an employee alleged that this policy violated California Labor Code Section 227.3. The trial court disagreed and granted summary judgment for the employer.

The Court of Appeal affirmed:

An employer is entitled to adopt a policy specifying "the amount of vacation pay an employee is entitled to be paid as wages," depending on length of service. (Suastez v. Plastic Dress-Up Co. (1982) 31 Cal.3d 774, 783.) The law permits an employer to offer new employees no vacation time: If an express written company policy forewarns new employees that their compensation package does not include paid vacation during their initial employment, then no vacation pay is earned and none is vested. When such a policy is in place, as it is in this appeal, employees cannot claim any right to vested vacation during their initial employment, because they know in advance that they will not earn or vest vacation pay during this period. The trial court correctly determined that plaintiff was not unlawfully denied vacation pay when her employment ended.

Owen includes a good explanation of the limits on LC 227.3 and Suastez. The full text of the opinion is here.