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In CA, can you aggresively cut salary thus making the accrued PTO less valuable?

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  • In CA, can you aggresively cut salary thus making the accrued PTO less valuable?

    If your pay is substantially cut, does that effectively cut the value of your unclaimed PTO as well? If I was asked to work half time for half pay (salary pay), would this effectively half my PTO value?

    It seems insane, to me, because you could drop an employee's salary to $1 and suddenly their accrued PTO is worthless. Doesn't this go against the spirit of other laws in California which protect PTO?

  • #2
    Sorry but that is how PTO works. It is generally a set number of days or hours, not a dollar figure. Whether you take 40 hours or 5 days off, you are still getting the same benefit. The law does not require that employers pay out PTO at the highest salary level an employee ever earned.

    It goes both ways too. PTO that is earned and carried over while making a lower salary , after a raise, would then be paid at the higher amount when taken.
    I post with the full knowledge and support of my employer, though the opinions rendered are my own and not necessarily representative of their position. In other words, I'm a free agent.

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    • #3
      In CA the PTO is paid out at the wage rate at the time of separation. If I understand your question, you are on salary and they cut your salary in half but you only have to work half the time you did before.

      If that's the case, then your hourly wage rate does not change and an hour of PTO is still worth the same amount.

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      • #4
        Originally posted by decommissioned View Post
        If I understand your question, you are on salary and they cut your salary in half but you only have to work half the time you did before.

        If that's the case, then your hourly wage rate does not change and an hour of PTO is still worth the same amount.
        Good catch, decommissioned.
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        • #5
          Originally posted by ElleMD View Post
          Sorry but that is how PTO works. It is generally a set number of days or hours, not a dollar figure. Whether you take 40 hours or 5 days off, you are still getting the same benefit. The law does not require that employers pay out PTO at the highest salary level an employee ever earned.

          It goes both ways too. PTO that is earned and carried over while making a lower salary , after a raise, would then be paid at the higher amount when taken.
          In California they (the DLSE) will look at it on a case-by-case basis. They are accustomed to hearing disputes about the value of PTO when the wage rate varies from pay period to pay period. Commissioned sales people frequently bring claims for PTO that includes their commission, and their former employers only want to pay it based on their base salary.
          California labor law gives the DLSE (and a jury) the ability to examine the facts and make a determination if an employer's action was "shocking to the conscience". If I was sitting on a jury and I was presented with facts that supported a claim that an employer slashed a salary just to avoid paying accrued PTO, I'd find my conscience shocked.

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          • #6
            Originally posted by decommissioned View Post
            In CA the PTO is paid out at the wage rate at the time of separation. If I understand your question, you are on salary and they cut your salary in half but you only have to work half the time you did before.

            If that's the case, then your hourly wage rate does not change and an hour of PTO is still worth the same amount.
            This is pretty much my response also.

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