Deducting vacation time for missed work is OK in California!

Employers can deduct exempt employee annual leave (vacation) time for missed portions of work days.

In the sometimes confused landscape of employee compensation rules, California’s Fourth District Court of Appeal recently clarified that Employer’s who require exempt employees to use their annual leave hours when they are absent from work for portions of a day do not violate state law.

Conley v. Pacific Gas & Electric Co., 131 Cal. App. 4th 260 (2005), which held that California law does not prohibit an employer “from following the established federal policy permitting employers to deduct from exempt employees’ vacation leave, when available, on account of partial-day absences,” remains good law and is not limited to missed work time in excess of four hours or more in a single day.

The case is Rhea v. General Atomics – filed July 21, 2014, Fourth District, Div. One: D064517.PDF

Employers should consider whether their existing practices, and their existing Employee Policy Handbooks, comport with this and other nuances of California law.



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