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Dec09

Cap on accrued paid time off in California

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What is California law on placing a cap on the maximum number of days that can be accrued for paid time off?

This is one of the few limits that California allows you as an employer to place upon vacation time or PTO.

Under California law, an employee who accrues vacation time must be paid for it, or allowed to retain it for use at a future date. And PTO must be treated the same as vacation time. However, the law allows an employer to set a cap on the amount of PTO that can be accrued.

Suppose Sarah has 200 hours of PTO. The employer cannot take this earned time away from Sarah, unless she is paid for it. However, the employer can cap PTO at 200 hours, essentially telling Sarah *You will not earn or accrue any more PTO until you have used some.* The state has determined that this is a reasonable way for the employer to limit liability for paid vacation and PTO. This strategy is legal in every state, including California.  

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This entry was posted on Wednesday, December 9th, 2009 at 11:34 am and is filed under
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2 Responses to “Cap on accrued paid time off in California”

  1. patricia Says:
    February 12th, 2010 at 6:14 pm

    Is there a minimum cap required in California, e.g. 1.5 times? Also, is the cap valid only from one year to the next?

    If we give Sue 15 days paid time off and she uses 0 in year 1, she can accrue 15 toward year 2, right? What if she uses 0 again in year 2? How many can she bring forward to year 3?

  2. Caitlin Says:
    February 12th, 2010 at 7:51 pm

    Hi patricia! What you are describing is not a cap — it is carrying over vacation into the next year. Please post a question if you need more info. HTH, and thanks for reading the blogs!~ Caitlin

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