Our policy states that after 1 year of employment and employee will receive 5-days of paid vacation. They are not allowed to use it until they have completed at least 1 year. If an employee quits or is terminated before our 90-day introductory period, do we have to pay accrued vacation?
Not if your policy clearly says no vacation time has yet accrued. You are only required to pay out accrued vacation pay. If your policy is unclear, it may be prudent for you to pay and then make the policy clear. A few days of vacation pay is cheaper than 30 days of waiting time penalties.
If you have any question about how a court might determine the meaning of your vacation pay policy, seek out specific, confidential advice from an experienced employment law attorney.
Good luck to you.
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The law requires you to pay any "earned and unused" vacation. So, the question is what does you written policy state about how/when vacation is earned. Once earned, it is owned by the employee and cannot be taken away. If none has been earned yet, there is noting to pay regarding vacation.
California law does not require an employer to offer vacation but if they do, there are restrictions in how they can administer payment for those vacation days. The Labor Commission, who enforces vacation, would likely find that your employees have been accruing vacation during that first 90 days and although you have discretion to decide when employees take vacation, you must pay them out for all hours of accrued and unused vacation when they leave even if it is before 90 days is up. An employment law attorney can help you draft a policy that complies with the law. It is more complicated than it seems.
This advice is general information about the law and does not provide legal advice for any particular situation. It does not form an attorney/client relationship or provide confidentiality.
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