Yes. DLSE’s enforcement policy does not preclude an employer from providing a specific period of time at the beginning of the employment relationship during which an employee does not earn any vacation benefits. This could apply to a probationary or introductory period, and can even apply to the whole first year of employment.
Such a provision in a vacation plan will only be recognized, however, if it is not a subterfuge (phony reason) and in fact, no vacation is implicitly earned or accrued during that first year or other period. For example, a plan with the following provisions would be an obvious subterfuge and not recognized as valid:
Year 1: No vacation
Year 2: 4 weeks vacation
Year 3: 2 weeks vacation
The four weeks’ vacation earned in the second year, when viewed in the context of the two weeks’ vacation earned in the third year, makes it clear that two of the four weeks earned in year two are actually vacation earned in year one.
A valid vacation plan could look like the following:
Year 1: No vacation
Year 2: 2 weeks vacation
Year 3: 3 weeks vacation
Years 4 through 10: 4 weeks vacation
In those instances where a “waiting period” (Year 1 in the examples above) is found to be a subterfuge, employees who separate from their employment during the “waiting period” will be entitled to prorated vacation pay at their final rate of pay. On the other hand, where the employer’s vacation plan has a valid “waiting period” provision, employees who separate from their employment during that period will be ineligible for any vacation pay.
October 2018
Tags: Vacation, California