Question

I am the Human Resources Director for a mid-sized company. Our employee handbook says that the company provides employees with family leave, but requires that employees use their accrued vacation time before using the leave. Under the law, must we advise the employees of that requirement a certain number of days before they use their leave?

Answer:

There is no statutory requirement that provides that an employer must let an employee know within a certain number of days that he or she must first use accrued vacation time before using leave. However, the Division of Labor Standards Enforcement (“DLSE”) had held that an employer must give employees a minimum of nine (9) months notice that he or she must use accrued vacation. Recently, the Labor Commissioner for the State of California announced that there is no basis for a nine-month notice requirement, and instead determined that “reasonable” notice, specifically 90 days, must be given.

As background, the DLSE is the state agency that enforces minimum labor standards. In the past, the DLSE has issued opinion letters in response to requests for opinions on a variety of subjects. In 1996, the California Supreme Court in the Tidewater case held that these opinion letters do not have the force of law. Nevertheless, many employers look to these letters for guidance in their efforts to comply with the state labor standards.

Donna Dell is the Labor Commissioner for the State of California and as such is the Chief of the DLSE. She is currently reviewing the DLSE opinion letters to determine their legal force and effect. As a result, she is withdrawing some of those letters when she finds they have no basis in law. Most recently, she withdrew an August 30, 2002 opinion letter due in part to the position taken on this notice issue.

The August 2002 letter addressed issues involving temporary plant shutdowns, but the ultimate conclusion affected other types of situations. The specific question addressed was whether during a weeklong plant shutdown, an employer can require employees to use accrued paid time off (PTO) or accrued vacation. According to the opinion letter, an employer could have this requirement but had to give employees a minimum of nine (9) months notice prior to the week or weeks in which the PTO or vacation time had to be taken. In other words, the employer would have to know more than nine months in advance that it was going to shut down the plant for a week so that it could fulfill the notice requirement. Likewise, in your situation, if an employer had a family leave policy requiring that the employee use his or her vacation time before using leave, it could not enforce this policy unless it notified the employee of this policy nine or more months before the employee took the leave.

Labor Commissioner Dell found no legal authority for the determination that a minimum of nine (9) months notice must be given when an employer is requiring an employee to use accrued vacation or PTO. Labor Code section 227.3 provides that “[t]he Labor Commissioner or a designated representative, in the resolution of any dispute with regard to vested vacation time, shall apply the principles of equity and fairness.” Based on that Labor Code section, the Labor Commissioner has now stated that employers must only give their employees “reasonable notice” of a requirement to use accrued vacation or PTO. She has interpreted “reasonable notice” to mean no less than one full fiscal quarter or 90 days, whichever is greater.

Although this is still approximately a 3-month notice requirement, it is more workable than the DLSE’s prior 9-month notice requirement. The new 90-day notice requirement is not specifically set forth in any statute. However, it is advisable that employers follow it since it is the determination of the California Labor Commissioner. As such, the DLSE will look to that determination in reaching its decisions at the administrative level, and the courts may rely on it as well.
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