There has been activity in two areas regarding employment law in California. One is deemed to be good, even great, news and the other is not so great for smaller companies.
The good news is a court ruling that may affect many of you regarding vacation pay. A company had a policy stating employees earn one week of vacation after one year of employment. When an employee left the company after 6 months, he filed a claim that he was due half the vacation promised after one year.
CA law states earned vacation time is part of the employee’s wages and it is earned each day of work. Vacation time, once earned, cannot be lost… it is used or paid out. If the employee doesn’t use their earned vacation, the total unused time can be limited by a cap that will make the employee stop earning more vacation time until the employee’s balance is below that cap.
A 2009 court case decided the employee was due a portion of the first year’s vacation. However, in that case, the company’s policy stated employees earn one week of vacation during their first year of employment but they couldn’t use it until after one year. Since their way of writing the policy made it clear vacation time was being earned in that first year, the company had to pay out the earned time.
The most recent case was different because their policy specifically stated the employee earned no vacation during the first year of employment. Take a look at how your policy is written and let us help you update it, if needed.
The bad news is that CA’s SB63 has passed through the legislature and is now ready for the governor’s signature. If this bill is made into law, companies with only 20 or more employees will now have to provide employees with up to 12 weeks of unpaid time off each year for family/medical purposes. Currently, similar laws (FMLA, CFRA) only affect companies with 50+ employees.
SB63 provides eligible employees protected time off for certain things, such as baby bonding and medical issues for themselves or family. Pregnant employees would have available both the time off provided in CA’s Pregnancy Disability Leave (up to 3 months) and the 12 weeks available through this bill because they cannot overlap. While you do not pay for any of this time off, the employee could receive supplemental pay from the state for about 3 months while on leave.
Aside from having employees off work for up to 12 weeks, companies will have additional administrative responsibilities in the form of various documents to be sent in a timely manner and tracking the time off related to these leaves. Remember, this is protected time off so hiring someone to fill their position will be on a temporary basis because the employee must be provided with their same or similar job when they return from the leave.
We’ll let you know if the governor signs or vetoes this bill. Even if the bill is vetoed, remember you can still allow employees unpaid time off as a personal leave of absence to accommodate baby bonding or medical leaves for your employees.
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