California Labor Guidance
Free plain-English summaries of opinion letters, administrative policies, and interpretive notices from California's labor agency, with the current status and the official source on every page.
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Deducting partial-day absences of exempt employees from leave balances
An employer asked whether it could deduct hours from an exempt employee's accrued vacation or sick leave bank for a series of specific partial-day absence scenarios. DLSE confirmed that while an exemp…
Whether undifferentiated PTO counts as sick leave for Kin Care and is subject to vacation vesting
A law firm asked whether an employer's undifferentiated paid-time-off (PTO) bank — which lets employees take days off for any reason without distinguishing vacation from sick time — counts as sick lea…
Waiting-time penalties and vacation payouts must include bonuses and commissions
An employer asked whether waiting-time penalties for late final pay, and payouts of unused vacation, should be based on base salary alone or total compensation including guaranteed bonuses. The DLSE c…
Changing a vacation plan's calculation method doesn't erase already-vested pay
An employer wanted to stop including a night-shift pay differential when calculating vacation pay going forward, and asked whether it owed employees a lump-sum "true-up" for vacation already accrued u…
"Use it or lose it" vacation policy and vacation pay at termination
An employer asked whether its vacation policy — under which vacation didn't begin accruing until semi-annual target dates, couldn't be carried over past the calendar year, and was paid out only on the…
DLSE will not follow the Ninth Circuit's Barner v. City of Novato view that vacation pay isn't salary
A law firm asked whether DLSE would follow the Ninth Circuit's decision in Barner v. City of Novato, which held that the federal salary-basis regulation's terms "amount" and "compensation" mean cash/s…
'Cashing in' vested vacation at a discount to current wage rate risks a void wage release
A law firm asked whether an employer, having complied with Labor Code section 227.3 and the Suastez line of cases on vacation, could let employees voluntarily "cash in" vested vacation accrued under a…
A vacation-accrual cap that later drops to a lower cap after use is not a valid 'no additional accrual' policy
PayLess Drug Stores' counsel proposed a revised vacation policy allowing vacation to accrue day-by-day and carry over, but capping further accrual at roughly 17.5 days for nine months and then droppin…
A short plant shutdown of 10 days or less with a set return date is not a termination requiring final-wage payment
An attorney asked DLSE how planned short-duration facility shutdowns (about a week each) would affect an employer's final-wage obligations under the Labor Code. DLSE explained its long-standing policy…
'Floating' birthday/anniversary holidays that can be taken any time are really vacation days, so unused ones must be paid out under Suastez
An employer's counsel asked DLSE to confirm that employees who worked the days before and after their birthday/anniversary "floating holiday" but never took the day off forfeit the benefit, rather tha…
'Bonus days' awarded for perfect attendance that can be used for any purpose are vacation, so unused days vest under Suastez
An employer's counsel asked DLSE to correct a district office's finding that an employee's unused "bonus days" (four hours awarded for every six weeks of perfect attendance, usable for any purpose up …
An employer cannot recover overpaid vacation wages from an employee's final paycheck; that self-help deduction violates the state's wage-exemption public policy
Out-of-state counsel asked DLSE to confirm several statements in a proposed vacation policy, including that an employer could recover overpaid vacation wages from an employee's final paycheck. DLSE co…
A vacation plan that freezes ALL new accrual until an employee uses up every carried-over day is not an acceptable 'cap'
An employer proposed a vacation plan under which an employee who carried over unused vacation days into a new year would not accrue any new vacation until all the carried-over days were used. DLSE rej…
An undifferentiated 'PTO' bank that mixes vacation, sick leave, and personal days is treated entirely as vacation pay, which cannot be forfeited
A staffing company asked DLSE to review a "Paid Time Off" (PTO) policy that lumped vacation, holidays, sick leave, and personal days into one accrual bank, capped at 26 days, with only 10 days carried…
A vacation-accrual schedule that decreases in year two is not a reasonable acceleration policy under Suastez
Counsel for an employer asked DLSE to clarify a 1986 Interpretive Bulletin on vacation pay, describing a plan with no vacation accrual for the first 90 days, one week of vacation at the end of year on…
Reasonableness of a one-year vacation-accrual cap under Interpretive Bulletin 86-3
An attorney asked DLSE whether a one-year ceiling on vacation accrual would be a reasonable "use it or lose it" cap under Interpretive Bulletin 86-3. DLSE explained that caps on vacation accrual are p…
Pre-existing, firm-wide sabbatical programs get a narrow exception from Suastez
An attorney followed up on DLSE's July 13, 1987 letter (1987.07.13-1) to ask about a sabbatical leave program offered to all employees of a firm, not just senior managers. DLSE reaffirmed that a firm-…
Federal Service Contract Act vacation rules are a floor, not a ceiling, under California law
The U.S. Department of Energy's Assistant Chief Counsel asked DLSE about vacation-benefit obligations for federal Service Contract Act contractors operating in California. DLSE's Chief Counsel respond…
Criteria for a sabbatical leave program to fall outside Suastez and Section 227.3
An attorney asked DLSE whether Labor Code Section 227.3 and the Suastez decision apply to a client's sabbatical leave program. DLSE opined that a true sabbatical, defined as paid leave for travel, res…
Longevity bonuses in lieu of vacation at temporary service agencies, evaluated case-by-case for Suastez subterfuge
A temporary staffing company's president asked DLSE how the Suastez decision applies to temporary service agencies that pay longevity bonuses instead of offering vacation. DLSE explained that because …
Federal Service Contract Act vacation rules do not preempt California's Suastez proration requirement
An attorney for a security-guard contractor at the Oakland Army Base asked whether the federal Service Contract Act's vacation rules, which do not require proration, override California's Suastez v. P…
Suastez does not apply where no paid vacation is offered at all
An attorney asked DLSE whether the Suastez decision applied to a client whose sales representatives received no paid vacation but could take unpaid time off by mutual agreement, continuing to earn com…
'Unlimited' executive vacation with approval still vests pro rata under Suastez
An attorney asked DLSE to review a client's executive vacation and sick-leave policy, arguing that no vacation was accruing because managers were told they had unlimited vacation "with approval." DLSE…
Decelerating vacation accrual and probationary forfeitures violate Suastez
A trade association's executive asked DLSE to review specific vacation-accrual mechanics against the Suastez decision and Interpretive Bulletin 86-3. DLSE found that disproportionate, decelerating acc…
Sick leave convertible to 'personal compelling business' time is treated as vacation
A bank's personnel assistant asked DLSE about a policy letting employees use 3 days (24 hours) of earned sick leave for "personal compelling business" once 80 hours of sick leave had accrued. DLSE con…
Personal Days Off convertible to vacation are subject to the Suastez no-forfeiture rule
A company's staff attorney asked DLSE to review its Personal Days Off (PDO) policy against the California Supreme Court's Suastez v. Plastic Dress-Up decision and DLSE's Interpretive Bulletin 86-3. Be…
A vacation accrual rate that decelerates mid-employment is a Suastez red flag, with a narrow pre-existing-policy exception
An attorney asked DLSE to review a client's vacation policy where the accrual rate accelerated in the second six months of employment, then decelerated and leveled off, under the Suastez decision. DLS…
Cafeteria-style benefit plans under IRC Section 125 do not excuse compliance with Suastez
A bank's general counsel asked DLSE how Interpretive Bulletin 86-3 (applying the Suastez decision) interacts with IRS regulations under Internal Revenue Code Section 125 governing cafeteria-style bene…
Traditional sabbatical leave generally falls outside Suastez, decided case-by-case
A company president asked DLSE how the Suastez decision and Interpretive Bulletin 86-3 apply to sabbatical leave. DLSE explained that sabbatical leave is generally not covered by Suastez, assuming it …
Computing pro rata vacation pay for salespeople on a draw plus commissions
A trade association's executive director asked DLSE how vacation pay should be computed for salespeople paid a draw plus commissions, following the Suastez decision. DLSE explained that Suastez lets e…
Flexible time off (FTO) that mixes vacation, sick leave, and personal time is subject to Suastez
A manufacturers' association's general counsel asked DLSE to review a member employer's flexible time off (FTO) policy against the Suastez decision. DLSE concluded FTO usable at the employee's discret…
Floating holidays and general absence time count as vacation; deducting advanced vacation at termination
A law firm asked DLSE several questions under Interpretive Bulletin 86-3. DLSE stated that floating holidays and general absences count as vacation time under Suastez. Vacation time advanced before it…
Car allowance is a business expense, not vacation pay, absent a specific agreement
A personnel coordinator asked DLSE whether a car allowance must be included when calculating accrued vacation pay owed to terminated employees. DLSE responded that, absent a specific agreement includi…
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These are official interpretive documents from California's labor agency: opinion letters answering questions from employers and workers, administrative policies, and interpretive notices. They show how the agency applies wage-and-hour and workplace law to real situations, but they are guidance, not statutes or court decisions, and the agency can supersede or withdraw them. Every page above shows the document's current status, when that status was last verified, and a link to the official source.