Is that "sabbatical" in your employment contract really a "vacation?"
Employers should know the answer to this question is particularly important when an employee leaves and claims a right to deferred compensation. California Labor Code sections 227.3 require employers to pay employees the balance of "vested vacation time" unused as wages. The California Supreme Court has explained what is meant by vested vacation time: whatever amount of time the employee has labored, where the person is entitled to a certain number of vacation days per year of employment, the consideration is the duration of employment past, making unused vacation time deferred compensation which vests pro rata as the employee renders service. (Suastez v. Plastic Dress-up Co.(1982) 31 Cal.3d 774, 779-781.) The state's Labor Commissioner became concerned that employers would disguise vacation time as sabbatical time to avoid this requirement and issued opinion letters enforceable through the Department of Labor Standards and Enforcement (DLSE). The appellate opinion discussed below examines the DLSE test that emerged and determines the first-impression, threshold question of how to distinguish legitimate sabbatical from vacation.
In Eric Paton v. Advanced Micro Devices,Inc. (opinion filed August 5, 2011) 2011 DJDAR 11831, plaintiff sued defendant employer as a representative class member for defendant's failure to pay him for an eight-week "sabbatical" he had earned yet had not used by the time he resigned. Defendant filed a motion for summary judgment in the Santa Clara County Superior Court, arguing the plaintiff's sabbatical benefit is not vacation within the meaning of Labor Code section 227.3. The trial court granted defendant's motion and ordered judgment in defendant's favor.
The Court of Appeal, Sixth Appellate District, reversed, finding that there are triable issues of fact that should be decided by a jury. The appellate court identified four factors (the first three as found in the DLSE test) that would tend to show that a sabbatical program is not regular vacation: (1) leave that is granted infrequently, (2) length adequate to achieve employers purpose of enhancing employee's performance upon return, (3) this leave is in addition to regular vacation leave that is comparable to the average vacation leave in the relevant market, and (4) some feature that demonstrates the employee is expected to return to work.
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