On April 1, 2020, the California Court of Appeal issued the first published decision addressing unlimited vacation policies under California law.  “Unlimited” vacation policies in which employees have no minimum and no maximum vacation and do not accrue any vacation time have become increasingly popular in recent years.  However, without guidance from the courts, employers that have implemented these policies have faced legal uncertainty.  In McPherson v. EF Intercultural Foundation, Inc., the court held that the employer’s purported “unlimited” paid time off policy violated Labor Code Section 227.3 based on the particular facts of that case.  Since the court limited its ruling based on the facts in McPherson, it left open many questions regarding the lawfulness of unlimited vacation policies generally.  Fortunately, the court also provided example features of an unlimited vacation policy that it suggested might not violate Section 227.3.  Nevertheless, this newly published decision may have opened a door for more litigation and we recommend employers review their flexible/unlimited time off policies.
Continue Reading California Court of Appeal Addresses Unlimited Vacation Policies for the First Time in McPherson v. EF Intercultural Foundation, Inc.

On July 13, 2015, Governor Jerry Brown approved AB 304 Sick Leave: Accrual and Limitations, which amends the Healthy Workplaces, Healthy Families Act of 2014 (i.e., Sections 245.5, 246, and 247.5 of the California Labor Code).  These amendments took effect immediately upon signature.  The following is a summary of the key amendments to the law, most of which clarify what is required by the law.
Continue Reading California Paid Sick Leave Law Amended, Effective Immediately

While the New Jersey Senate and Assembly continue to debate state-wide sick leave laws, four more New Jersey municipalities have enacted mandatory sick leave laws for private employers.  Effective January 2015, East Orange, Paterson, Irvington and Passaic will join Newark and Jersey City in requiring paid sick time for employees.
Continue Reading Paid Sick Leave Spreads Throughout New Jersey

As previously reported, on May 8, 2013, the New York City Council, by a vote of 45-3, passed the Earned Sick Time Act (the “Sick Leave Act”). On June 7, 2013, Mayor Bloomberg vetoed the Sick Leave Act, citing a possible chilling effect on hiring. As expected, on June 27, 2013, the City Council overrode Mayor Bloomberg’s veto by a vote of 47-4, setting the implementation of the Sick Leave Act in motion.
Continue Reading UPDATE: New York City Council Overrides Mayor Bloomberg’s Veto And Enacts The Earned Sick Time Act Requiring Mandatory Paid Sick Leave

On November 23, 2009, the Chief Counsel of the California Department of Industrial Relations’ Division of Labor Standards Enforcement (DLSE) issued an opinion letter stating that employers may deduct vacation and sick leave for exempt employees’ partial-day absences of less than four hours as long as consistent with the employer’s express policies. In addition, the DLSE opined an employer may deduct a combination of vacation leave and sick leave for a partial-day absence.Continue Reading DLSE Issues Opinion Permitting Employer Deductions of Vacation and/or Sick Leave for Absences of Less Than Four Hours

On July 21, 2005, in Conley v. Pac. Gas & Elec. (2005) __ Cal.App.4th __, 2005 WL 1693801, the First District Court of Appeal decided an issue of first impression in California wage and hour law: whether an employer’s policy of charging its exempt employees’ vacation leave banks for partial-day absences (4 hours or more) from work renders all of those employees non-exempt as a matter of law under the salary basis test. The good news for employers is that the answer is no. In affirming the trial court’s denial of class certification for a proposed salary basis class of exempt PG&E employees, the Court of Appeal held that, consistent with federal policy, PG&E’s practice of deducting partial-day absences from vacation leave does not violate California law. 2005 WL 1693801, *1.
Continue Reading Court Finds California Employers Can Require Exempt Employees To Use Vacation Time For Partial Day Absences

California and federal law contain overtime pay exemptions for executive, administrative and professional employees. In order to qualify as exempt, employees must meet requirements regarding their duties and salary. For example, they ordinarily must spend over half their time on exempt duties and receive a minimum amount that is paid on a “salary basis.” Currently, the minimum is $28,080 a year under state law.
Continue Reading DLSE Rescinds Controversial Opinion Regarding The Ability Of Exempt Employees To Use Vacation In Partial-Day Increments