Is PTO Required by Law?

Employers in California are not required to provide any PTO, such as paid time off or paid or unpaid vacation, to their employees.

Author: Brad Nakase, Attorney

Email  |  Call (888) 600-8654

In California, the law does not require employers to give employees paid time off (PTO) or paid vacation days. That said, an employer can choose to provide vacation time as part of his or her company policy. In this case, his or her employees have a right to the granted vacation time, and under the law must be paid for any unused vacation time when they part with the company upon termination. An employer that does not reimburse an employee for unused vacation time could face a claim or a lawsuit to recover compensation.

In this article, our employment attorney in San Diego discusses California PTO law as follows:

In California, Are Workers Entitled to PTO Or Vacation Time?

According to the California Labor Code, an employer is not required to give his or her employees vacation time, PTO, holiday pay, or personal days. Often, employers offer vacation time a benefit to attract workers. But vacation time is by law not required.

Generally speaking, employers in California have the right to govern how vacation time is earned and when employees are able to take earned vacation time. For new employees, employers can impose a waiting period, meaning that the new employee has to wait for a certain set amount of time before being able to build up vacation time. This policy must be clearly stated. This is because in California, vacation days are considered a type of wages.

While an employer in California may choose to offer vacation time or PTO, if he or she does so, the vacation time must be treated like earned wages. Even if the employee does not use his or her vacation time, the vacation time does not expire. This condition also applies to part-time employees, not just full-time.

An employer is not allowed to take away earned vacation time as a form of discipline. When an employee leaves the company, the employer is required to pay out any unused earned vacation time, again, since vacation time counts as wages.


Jack is a full-time math tutor at MathAddict, a company based in Manhattan Beach. His employer has a vacation policy that grants him ten days of paid vacation each year. In the winter, Jack books a trip to Miami that will last five days. After the trip, he will still have five days of unused vacation time.

When Jack tells his boss about the vacation, his boss is angry and instructs him not to go. She says that many of his students have a big test that week and will need his help. Jack promises to rebook his vacation and teach Algebra instead. However, he decides to go to Miami anyway, breaking his promise. When he gets back to work, his boss fires him. His boss also refuses to pay out the remainder of his earned vacation time.

As Jack has broken his employer’s vacation policy by going on vacation at a time inconvenient for his employer, he is eligible to be fired. However, he still has a right to his unused vacation time, as it qualifies as earned wages. At the time of his firing, Jack’s employer must compensate him for the five days of unused vacation time in his final paycheck. If his boss does not do this, then she may receive “waiting time penalties.”

Sick Days

While employers in California do not have to provide vacation time to their employees, they do have to provide paid sick leave. Under California labor laws, employees who work at least 30 days a year must receive paid sick days.

Paid sick leave is earned at a rate of no less than one hour per 30 hours worked. If a full-time employee works 40 hours a week, then in one month, he or she would have earned a little over 5 hours of sick leave.

In California, paid sick leave is required for both exempt and non-exempt employees.

Can Earned Vacation Time Be Taken Away?

Again, vacation time must be treated like earned wages. Once an employee earns vacation time, it cannot be taken away. Nor can the vacation time expire. Some employers might have a “use-it-or-lose-it” policy that places an expiration date on vacation time. However, such a policy is a violation of California labor law.

An employer is allowed to require an employee to use earned vacation time. This would be an effort to avoid a worker building up too much vacation time to be used at once. An employer might also put a cap on how many vacation days an employee can earn. Both situations are legal under California law.

An employer is not allowed, however, to take away earned vacation time to discipline an employee. While the employer could always change the company’s vacation policy to ban vacation time, any earned leave is protected once earned.


Hank is an employee at Sunshine Rentals, a company that sells timeshares in tropical locations. At the end of the quarter, his boss Linda goes off on an angry tirade, accusing her team of not selling enough that quarter. She threatens to take away vacation time as punishment.

While Linda is allowed to adjust the company’s overall policy to prohibit vacation time, she is not allowed to take away vacation time already earned. Since Hank has accrued ten days of vacation time, he is entitled to that time off, and even if Linda is upset at Hank, she cannot take away that earned time. And if Hank is to quit his job the next day, Linda still has to pay out those unused vacation days.

Can an Employer Place Restrictions on Vacation Time?

Employer can indeed put restrictions on taking time off for vacation. These restrictions could include the following:

  • Employees must give a certain amount of notice before taking time off
  • Vacation policies may differ among other managers and employees
  • Vacation time must be approved prior to being taken
  • An employee may only take a certain number of days off in a row
  • Blackouts, or days when time off is not available to be taken

Vacation time cannot be restricted, however, based on illegal discrimination. A vacation policy cannot be determined based on race, religion, disability, sex, age, or any other protected group.


Horace is the manager of a hobby store that sells dollhouses and model trains. Seventy years old and crotchety, Horace does not like young people, or joy in general. Whenever one of his younger employee requests vacation leave, he denies it for some vague reason or another. Whenever an older employee asks for vacation leave, Horace grants it, no questions asked. While Horace is allowed to create general rules for his company’s vacation policy, his current policy may violate California law. Since he does not approve vacation requests of employees based specifically on their age, his policy may be discriminatory.

Are Employees Paid for Unused Vacation Time?

When an employee quits or is fired from a job, employers are required to pay the employee for any unused vacation time. This is because under California law, vacation time qualifies as earned wages. Therefore, if an employer does not reimburse an employee for unused vacation time, it is as though he or she is not paying the employee for hours worked. The employee would have the right to take the issue to court, seeking the denied wages.

Is “Use-It-Or-Lose-It” Legal?

In California, a “use-it-or-lose-it” policy is illegal. Vacation pay is a form of wages, so it cannot expire. Even if an employee does not use vacation leave by a certain date, they are still entitled to compensation.

Can an Employer Be Sued for Not Paying Vacation Time?

In California, employees can sue employers who do not pay out vacation time at the time of termination. An employee who leaves a company must receive compensation for any unused vacation days.

Have a quick question? We answered nearly 2000 FAQs.

See all blogs: Business | Corporate | Employment Law

Most recent blogs:

What is an EDD Audit?

An EDD audit is a payroll tax audit initiated when a former worker you classified as an independent contractor applies for unemployment with EDD.  The EDD thinks you misclassified the worker as an independent contractor and audits your company. 

Using PTO for Paid Vacation Time

PTO is any time an employee gets paid while away from work, including paid vacation time. PTO is paid time off, meaning a worker may use PTO for any reason, such as paid sick leave or paid vacation time.

When to hire an employment attorney?

You should hire an employment attorney as soon as you are aware of the issue or believe something is wrong and that the employer is not remedying the issue, such as harassment, wrongful termination, or discrimination.

Is PTO Required by Law?

Employers in California are not required to provide any PTO, such as paid time off or paid or unpaid vacation, to their employees.

Are 10 Minute Breaks Mandatory in California?

Employers in California are required by law to give non-exempt employees one 10-minute rest break for every four hours worked. A non-exempt employee is generally a worker who is paid by the hour and not by salary.

Is Unpaid Training Legal in California?

Yes, unpaid training is illegal in California. California employers must pay for mandatory training. Employees not paid for meetings or job training can sue for unpaid training.

Can PAGA Claims Be Arbitrated?

The U.S. Supreme Court clarified on June 15 that companies can compel arbitration of an employee's individual of an employee's individual PAGA claim, the non-individual claims should be dismissed.

Can you get fired for dating a coworker?

Most employment is generally at-will, so employers can fire an employee for dating a co-worker. However, if the co-worker you're dating was not fired, the employer firing you could be considered gender discrimination, and you can file a lawsuit.

How to report a company paying employees under the table?

A worker can report cash wage "under the table" by hiring an attorney or reporting to EDD. Before you say that the employer is paying under the table, you should ensure that it is illegal because it is not illegal if done correctly.

Can an employer take away earned PTO?

Paid Time Off or PTO cannot be taken away or forfeited when the pay accrues as earned. An employer is prohibited from taking away earned vacation time to punish you.

What Makes a Strong Retaliation Case?

The standard for proving a retaliation case requires the worker to show that the supervisor's action against the worker might deter a reasonable worker from reporting discrimination or participating in the EEOC complaint process.

Do you get paid for training at a job?

Under California employment law, employers are legally obligated to pay employees for time spent training for a job. It is illegal for employers to require employees to undergo unpaid training.

What is paid time off?

Paid time off - also known as personal time off - is when an employee takes off work while still getting paid by the employer. Likewise, personal time off is when an employee gets paid or unpaid while away from work.

What does an employment lawyer do?

An employment lawyer help employers and employees understand their respective rights and obligations, such as wages, wrongful termination, overtime, PTO, disability, discrimination, harassment, etc.

13 Wrongful Termination Examples

Employees wins millions of dollars in wrongful termination lawsuits against their employers. If an employee has been dismissed for the reason that is deemed illegal in California, then they may be able to sue their former employer for wrongful termination.

How do I know if I am exempt from overtime pay?

As of 2023, to be exempt from overtime pay, you must make at least $62,400.00 per year or $5166.66 per month. To be classified as an exempt employee, your salary must be at least twice California's minimum wage for full-time employment. 

Women’s Rights When Experiencing Sexual Harassment at Work

Title VII of the Civil Rights Act of 1964 (“Title VII”) makes it illegal for employers to allow anyone to be sexually harassed at work by anyone else, regardless of sexual orientation, gender, or sex. Women who experience sexual harassment at work may experience a range of negative consequences, including mental and physical health problems, lower earnings, and career interruptions.

How to respond to a notice of PAGA lawsuit?

5 steps to defend a PAGA lawsuit: 1) contact a PAGA lawyer after getting a PAGA Notice, 2) locate the arbitration agreement, if any, 3) determine if the safe harbor provision of the PAGA state applies, 4) compile a list of all employees that were similarly situated, 5) Collect the employee's manual.

What happens if you get an EDD audit?

An EDD audit is a process of verification that you have correctly withheld and reported personal income tax for wages paid to your employees. If you get an EDD audit, you may be liable for a wide range of fines, interest, and penalties on taxes that you owe.

What are the 4 Caregiver rights in California?

California caregivers are entitled to rest breaks, meal breaks, minimum wage, overtime pay for working over 8 hours per day, and double time for working over 12 hours, including overnight stays. Employers often face lawsuits from caregivers for violating caregivers’ rights, such as basic wages.

Terminating Employee with Cancer

Cancer is protected under the Disability Act, which protects an employee from retaliation and discrimination because of health impairment related to a cancer diagnosis. An employer cannot discriminate against an employee upon discovering that an employee has a severe illness or cancer.

Can I be fired for work restrictions?

No, you cannot be fired for work restriction if it is based on disability. However, an employer can fire an employee in some situations if the employee has work restrictions.

Annualized Compensation

An annualized compensation is to a predetermined gross pay per month paid to an employee for twelves months, totaling an estimated annual income.  In other words, annualized compensation - also known as annualized salary - is an estimate of how much pay an employee will earn over the course of a year if they were to work the full year. For example, teachers commonly do not work summer months and therefore need to annualized their salary for reporting taxes.

Contact our attorney.

Please tell us your story:

1 + 0 = ?