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California: Is this legal? We're switching to flexible time off, and

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  • California: Is this legal? We're switching to flexible time off, and

    Hi. My company is switching from an accrued-time-off policy to flexible time off, and it takes effect at the start of the year. Inevitably, some employees will not have used up all their accrued vacation days.

    The company says that at the end of the year, it will take note of how much accrued vacation time it still owes to each employee, and it will put aside the cash value of that vacation time. The money will then go into each worker's final paycheck -- that is, the company will hold on to that money until the employee leaves the company. That could be days later. It could be decades later.

    I'm wondering a few things.

    - Is it legal for the company to hold on to that money this way?
    - Is the company obligated to pay interest if it holds on to that money for a long time?
    - If the company files for bankruptcy someday, could that debt to employees be erased in the bankruptcy?
    - Do you know of any other potential pitfalls?

    Thank you so much.

  • #2
    What do you mean by "flexible time off"? How does it differ from "paid time off"? CA-DLSE considers PTO to be another phrase that means vacation. FTO is something your company made up that has no legal meaning. I can cite the CA vacation rules.

    http://www.dir.ca.gov/dlse/FAQ_Vacation.htm
    "Reality is that which, when you stop believing in it, doesn't go away".
    Philip K. **** (1928-1982)

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