Vacation rights when CA Ee's pay or schedule is reduced

I've heard it said that vacation entitlement in California is tantamount to a property right. But what is the "asset" that's held, the HOURS of entitlement or the DOLLAR VALUE of the hours?

Example 1: Let's say we have an employee earning $10 per hour. She works 40 hours a week, and she has earned a vacation entitlement of 80 hours for the year. One can easily accept that the value of the vacation is $800. If she agrees to a pay cut to $9 per hour but everything else stays the same, is she entitled to the "value" that's been lost, namely $1 x 80 hours? Or does she simply get her two weeks of earned vacation to take, and the value is based on her new rate with no further consideration?

Example 2: Similarly, let's say that our unfortunate employee keeps her same $10 pay rate, but her scheduled hours are cut to 35 hours per week. "Two weeks of vacation" would now be 70 hours, not 80. Is she entitled to $100, the value of the reduction in her "earned" vacation ($10 x 10 hours)?

Any opinions, or better yet, first-hand knowledge?

Comments

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  • [font size="1" color="#FF0000"]LAST EDITED ON 12-13-02 AT 08:17PM (CST)[/font][p]It's the hours entitlement. The regulation says pay out at time of termination (discharge or quitting) is at the wage rate then in effect unless there is a collective bargaining agreement that establishes a different rate.

    Take a look at California Labor Code Section 227.3

    [url]http://www.leginfo.ca.gov/cgi-bin/waisgate?WAISdocID=83158627225+0+0+0&WAISaction=retrieve[/url]

    "227.3. Unless otherwise provided by a collective-bargaining
    agreement, whenever a contract of employment or employer policy
    provides for paid vacations, and an employee is terminated without
    having taken off his vested vacation time, all vested vacation shall
    be paid to him as wages at his final rate in accordance with such
    contract of employment or employer policy respecting eligibility or
    time served; provided, however, that an employment contract or
    employer policy shall not provide for forfeiture of vested vacation
    time upon termination. The Labor Commissioner or a designated
    representative, in the resolution of any dispute with regard to
    vested vacation time, shall apply the principles of equity and
    fairness."


    Remember, California specifically prohibits a "use it or lose it" approach to accrued vacation. Thus, in the second situation, once those 80 hours have been earned, the emplyee is entitled to them even if her work week is reduced. If that reduction in hours results in her not being eligible to use vacation time, then I would think that the employer would then have to pay off all accrued vacation time in accordance with 227.3.
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