252 | 2023 Cal-Peculiarities ©2023 Seyfarth Shaw LLP www.seyfarth.com months or one year of employment. Thus, if California employers want to avoid paying accrued vacation pay to terminating short-term employees, then they must clearly provide that no vacation is earned for some specific initial period of time.429 If an employer also wants to permit an employee to take vacation immediately after that initial period, then it can arrange for the employee to take the vacation pay in the form of an advance against wages to be earned in the future, pursuant to a written agreement. But the DLSE has opined that California employers must not deduct from a final paycheck to recover for advanced, unearned vacation.430 7.19.4 “Personal time off” policies Some employers have combined vacation and sick leave to create an overall benefit typically called “personal time off.” This arrangement has administrative advantages, but enhances employer liability under California law because California will treat PTO as simply vacation by another name unless use of the PTO is conditioned upon a specific event, such as illness, an anniversary date, or a holiday. Moreover, employers with a PTO policy should ensure that the policy complies with the requirements of the California Paid Sick Leave Law (see § 2.14), unless they maintain a separate California Paid Sick Leave policy and bank of hours. A PTO arrangement also has “kin care” implications (see § 2.11). 7.19.5 Sabbaticals Some employers provide long-term employees with a sabbatical: a paid leave to promote retention and increase productivity upon the employees’ return to work. An employer thus might entitle employees to an eight-week paid leave—in addition to regular vacation—once they complete seven years of service. The DLSE acknowledges that a true sabbatical is not subject to the anti-forfeiture rules that protect regular vacation. But the DLSE insists that a “sabbatical” is really just extra vacation unless the leave (a) is awarded in addition to earned vacation, (b) occurs only after lengthy employment (such as seven years), (c) is granted for an extended period longer than the normal vacation, and (d) is provided only to high level managers and advanced professionals.431 One Court of Appeal decision, Paton v. Advanced Micro Devices, Inc.,432 rejected the DLSE’s arbitrary view that true sabbaticals are offered only to high-level or professional employees,433 but Paton generally adopted the DLSE’s approach and declined to define a clear set of rules on which employers could rely to ensure that the sabbaticals they grant will not be mistaken for vacation.434 The trial court in Paton had granted summary judgment to an employer sued by former salaried employees who claimed that the employer’s failure to pay them for unused sabbatical leaves amounted to an unlawful forfeiture of vested vacation pay. The leaves—available for eight weeks once an employee reached seven years of employment—were in addition to regular vacation. Paton distinguished regular vacation—deferred compensation typically earned in proportion to the length of employment—with a true sabbatical, which Paton defined as a leave designed to “provide incentive for experienced employees to continue with and improve their service to the employer.”435 Paton reversed the summary judgment for the employer, reasoning that because the employer imposed no condition on how employees used their sabbaticals, a reasonable jury could find that the sabbatical was really just extra vacation for long-term employees.436 Paton declined to apply a definitive test that would distinguish a sabbatical from a regular vacation. Rather, Paton announced a four-factor test to determine if a particular form of unconditional leave qualifies as a true sabbatical: (1) whether the leave is granted infrequently (e.g., every seven years), (2) whether the length of the leave is adequate to achieve the employer’s purpose (an unconditional leave should be longer than regular vacation),
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