Can an employer legally withold accrued vacation pay if an employee quits without giving proper notice?

UPDATED: Dec 3, 2010

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Can an employer legally withold accrued vacation pay if an employee quits without giving proper notice?

Our company handbook reads: ” Upon termination of employement, associates who provide a written two week advance notice and work the complete two weeks will be paid their unused vacation time. However, forfeiture of unused vacation time may occur where an assocaite has been dismissed for cause, fails to provide notice of voluntary termination, or provides notice, and then does not complete the full extent of said notice.” Is this a legal practice in CA? Also, if the employer chooses to terminate after notice is given, are they obligated to pay the accrued vacation time?

Asked on December 3, 2010 under Employment Labor Law, California


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

Answered 12 years ago | Contributor

Pursuant to CA law, unless otherwise provided for by a collective bargaining agreement, whenever the employment relationship ends, for any reason whatsoever, and the employee has not used all of his or her earned and accrued vacation, the employer must pay the employee at his or her final rate of pay for all of his or her earned and accrued and unused vacation days.  Labor Code Section 227.3.  Since vacation benefits are considered wages, such pay must be included in the employee's final paycheck.

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