California Employers: Rescinding Vacation Time May Be Illegal

Whether you are a veteran business owner, or new to the game of running a company and managing a team, you may often find yourself thinking that the work never ends. For many—and especially in the US as reaching the American Dream is so often considered the pinnacle of success—entrepreneurship is associated with the ability to take control of one’s life and destiny, achieve great things (hopefully), and make consumers happy in the process.

It all begins with a strong business model and the ever-important startup capital. Once you are ready to form the initial structure of your company, a skilled business attorney like Shane Coons should be consulted to help consider whether you need a corporation, partnership, sole proprietorship and LLC, or more. Along with helping you to file all the necessary paperwork, your business attorney can assist in creating employee and independent contractor agreements, partnership and vendor contracts, and more. Throughout the years, you may find yourself calling on your attorney for a wide range of legal services—and unfortunately that may sometimes involve representation in court.

Getting educated on the rules, regulations, and laws that apply to business owners—and staying continually updated—can prevent legal disputes from arising, and especially over employee matters. Undeniably, there is an enormous amount of information to digest regarding employee benefits, as well as rights. You may have a human resources department in your company, or perhaps it is all up to you, but if you offer an array of benefits to your employees, be assured they will take them seriously; in fact, you may have wooed numerous individuals to your company over others simply because of the benefits offered.

Vacation time figures in predominantly for many—and taking promised days and holidays off should be encouraged as well-rested, happy employees benefit the team and the company overall. Life, dedication to the work schedule, and big projects often intervene, however. This means vacations are not always possible, and the days and weeks may begin to accrue for some. As an employer in California, be aware that although there are alternatives to watching vacation days pile up significantly for your staff, you cannot rescind their time.

Once an employee has earned vacation hours, they are theirs to keep with any type of ‘use it or lose it’ policies being legal. If they have accrued so much time that it is becoming a concern, you may offer to give them cash for some of the days or ask that they take some vacation time before accruing any more. It is up to you to set policies for new employees who may not be able to start earning vacation pay until they have worked for you for a year, but upon leaving your employment, they must be paid for any unused vacation days. Writing a comprehensive policies and procedures manual for your company and outlining vacation time is extremely helpful to educate everyone on what to expect in the workplace. Be as specific as possible to avoid any gray area that could lead to potential lawsuits.

If you have concerns about business or employee issues, consult with Attorney Shane Coons. Our law office represents clients involved in a wide range of businesses and legal issues, and we would be glad to review your case and help you explore your options. Call now at 949-333-0900 or email us at Shane.Coons@seclawoffices.com.

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California Employers: Rescinding Vacation Time May Be Illegal

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