If you’re planning to close your doors for the holidays to help trim costs, and you want exempt employees to use up their accrued vacation during this period, you may want to review whether your plans comply with state wage and hour rules regarding exempt employees. A recent opinion letter from the state Division of Labor Standards Enforcement confirms that you can shut down your operations for a full workweek and not pay your exempt employees for that period. But whether you can require them to use up their accrued vacation or PTO (paid time off) depends on your written policies or the terms of an employment agreement.
The HR Management & Compliance Report: How To Comply with California Wage & Hour Law, explains everything you need to know to stay in compliance with the state’s complex and ever-changing rules, laws, and regulations in this area. Coverage on bonuses, meal and rest breaks, overtime, alternative workweeks, final paychecks, and more.
According to the DLSE, you can only require use of vacation or PTO if: 1) you have a policy, which was issued at least nine months before the scheduled closure, stating that exempt workers must use vacation or PTO during that period; or 2) an exempt worker’s employment agreement states that they must use such accrued time off during a specified period of the year (such as during the weeks of Christmas and New Year’s Day).