Accrued vacation pays out at separation. No exceptions.
Under Labor Code § 227.3, California treats accrued vacation as wages — earned but deferred. At separation, ALL accrued unused vacation must be paid out as part of the final paycheck. 'Use it or lose it' policies are illegal in California. Reasonable accrual caps are permitted, but accrued time can never be forfeited.
Vacation/PTO Payout
Tracks all accrued vacation/PTO as wages. Pays out 100% of accrued unused balance at separation. Enforces accrual caps without allowing forfeiture.
What the rule does on every accrual and at separation.
The hero card configuration: Block on illegal forfeiture configs, Flag on accrual-as-wages tagging. Here's what each does at runtime.
When configuring a CA vacation policy, the use-it-or-lose-it option is not surfaced. Annual reset policies that forfeit accrued time are blocked. Reasonable caps (where accrual stops at a ceiling) are allowed.
Every period, vacation accrual is tagged as wages on the wage statement. The balance is wages already earned, just deferred. This matches § 227.3 treatment.
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Vacation accrued is vacation owed.
California is one of the strictest states on vacation. Once accrued, it cannot be forfeited. Employers can cap accrual at a reasonable ceiling but cannot make accrued time disappear.
'Vested' means earned
Vacation 'vests' as it is earned — typically per pay period or per hour worked. Once vested, it is property of the employee and cannot be taken back. Different from sick leave, which California explicitly does NOT consider wages and does not pay out.
Use-it-or-lose-it is illegal
Annual policies that say 'use your vacation by Dec 31 or lose it' are illegal in California. The Supreme Court ruled in Suastez v. Plastic Dress-Up Co. (1982) that vacation is wages and cannot be forfeited. Some employers try to disguise these as 'paid time off' instead of 'vacation' — but if the time can be used at the worker's choice (not just for sickness), it's vacation under California law.
Teambridge accrues, caps, and pays out — never forfeits.
California vacation rules are mechanical. Teambridge implements them as a structural rule, not a configurable choice.
Vacation tagged as wages.
Each pay period, vacation accrues per the policy (typically hours per hours worked or hours per pay period). The accrual is tagged as wages — already earned, just deferred.
Stops accrual at the cap.
When a worker reaches the accrual cap, accrual stops until use brings the balance below the cap. Existing balance never decreases except through use.
Used hours deducted at request time.
When vacation is used, hours deduct from the balance. Manager approval is per company policy (not legally required to approve specific use).
100% of balance at final rate.
At separation, the full accrued balance pays out at the worker's final rate of pay. The payout is included in the final paycheck and tagged as wages on the final wage statement.
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