Vacation/PTO Payouts

Q: We are re-evaluating our vacation policy for all California employees in an effort to be more consistent across the company (and still keeping in compliance with CA laws on vacation/personal time). In the past, our employees have continuously accrued vacation, and then we would do an evaluation at year-end, and any vacation balance above 160 hours would be paid out (allowing them to keep 160 hours on the books). However, this policy is inconsistent with any other site within our organization so we would like to modify it in an effort to stay compliant but also be as consistent across the organization as possible. Given that, I have a few questions:

1. For any other organizations who have sites in multiple states, how are you managing the discrepancy in laws between varying states (in reference to vacation/personal time)?
3. Do you have a maximum vacation accrual amount?
5. Can your employees roll-over or accrue an unlimited number of hours?
7. Do you pay out unused vacation at the end of every year?
9. Do you have the same policy for personal time, or a separate policy for personal time?

A: Thank you to all who participated, your information was extremely valuable in helping us determine how we will handle things going forward. I received a total of 10 responses. If you would like further data or information, please let me know. Here is a synopsis of the findings:

• Of everyone who has responded, no company does a pay out at the end of the year. Instead, companies do have a maximum accrual amount. Once the employees reach the maximum, they could not accrue any more until they used some of the vacation.
• 9 out of 10 companies responded by indicating that their maximum accrual amount was more than their yearly accrual amount. That maximum amount ranged anywhere from 40 hours more than what they could accrue in a year, to double what they can accrue in a year. I should note, one individual responded by letting me know that there is a maximum accrual regulation set by the state of CA indicating that 1.75 times an employees annual accrual was the maximum that could be allowed “on the books.” (Ed. note: The 1.75 times should actually be more of a minimum. Technically, this isn’t a written law, however it is a DLSE opinion and recommendation.)
• As for PTO – everyone who responded indicated that they do not have separate Vacation and Personal accrual allotments, they either have

1. 1 PTO bank that includes vacation/personal/sick
2. A combined accrual for vacation/personal but have a separate bank for sick
3. A vacation accrual, and then a set # of personal days that can only be used for very specific things (ex. 5 days for Jury duty, with proper justification, or 3 days for bereavement leave, with proper justification)

• Lastly, there was one company that indicated that their maximum accrual amounts varied depending upon tenure with the company.