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California Vacations: What you need to know

If promised, it must be granted. Although no California law requires private sector employers to provide employees with vacations, whether paid or unpaid, most employers do offer their employees some version of vacation. It is important for employers to keep in mind, that in California, if employers “promise” vacation, they may be legally bound to provide it--and a binding promise does not require embodiment in a formal employment contract. California case law says that an employer's assurance of paid vacation time, whether made in an employee handbook, or given orally, or simply a matter of consistent practice, under most circumstances, constitutes a binding and enforceable implied contract.
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In addition, California employers have the right to decide when employees may take their vacations and the length of time employees are allowed to be away on vacation.
Employers may allow employees the option of receiving cash instead of using their vacation days. The employer can establish certain times during the year when an employee can receive the cash instead of using their accrued vacation time, or can allow employees to cash in at any time during the year.
Employers may allow employees to take vacation time before it is accrued, but do not have to allow this.
A California court of appeal has held that an employer in California need not provide paid vacation to its employees; need not provide paid vacation to new employees for a certain period of their initial employment; and may maintain a policy that employees will cease to accrue vacation time in excess of any earned but unused amount in their vacation bank (Owen v. Macy's, Inc., No. B207719 (CA Ct. App. 2d, Div. 2, 7/1/2009)).

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