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Joseph, Lawyer
Category: California Employment Law
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I have a small business with 4 people on the payroll including

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I have a small business with 4 people on the payroll including myself.
In regard to paid vacation / sick days:
The annual allowence is 10 vacation paid days and 5 sick paid days. This allowence is stated in the employment agreement and company employee guide.
1. Is there a distinction between paid vacation and paid sick or are they allconsidered personal days.
2. Right now I allow a roll over of unused paid vacation but they can't roll over / accrue paid sick time. Am I doing the right thing.
3. Recently, an employee under financial hardship masked to and I agreed to pay him his accrued vacation (additional paycheck). Did I do the right thing & again can I do it with sick days to futher help him or there is a distiction here.
4. Any additional facts that I need to be aware of in this regard.
Thank you.
Hello and welcome to JustAnswer.

My goal is to provide you with excellent service today.

1. As the employer, any distinction would be yours to make, but paid vacation and paid sick time are all considered paid time off. This generally makes them personal days, but you are definitely within your rights to require some type of verification for sick days if you would like. You can group your paid vacation and sick days together to simplify the policy and give your employees up to 15 paid days off a year for sick days or vacation.

2. No, unfortunately, if you are offering paid time off, it is considered a wage that is earned for sick days or vacation days, so you cannot eliminate the days from the employee without paying them for their unused time.

However, it is perfectly legal to cap the accrual of sick time and/or vacation time at a certain amount, at which point the employee will not continue to accrue sick days until he or she uses a sick day.

So, you can cap the accrual of sick days at 5 days and require employees to use a sick day before accruing more (up to 5), you just cannot eliminate days that are in the employee's vacation or sick day 'bank.'

3. It is entirely up to you to pay an employee accrued vacation or sick days during the time of employment. There is no distinction between paying out vacation or sick days and you can pay our the accrual of both. It is also extremely nice of you to do so and help your employee out of his financial hardship.

I hope the above information is helpful.

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Thanks and best of luck!
Customer: replied 4 years ago.

Let me see if I'm understanding you correct:

1. If the employee reached his roll over date with unused paid vacation or sick which are legally the same those can't be eliminated and must be allowed / paid in added gross instead.

2. It is legal to cap the accrual of paid personal days. A cap will be valid regardless of the length of employment. Any additional accrual will depend on consumption and the replenishment will be to the level of the cap only. In other words a cap will override the allowence if the allowence is not used.

3. If the above is correct. How do I legaly establish a cap. Make changes to the employemnt guide that I use? Notify the employees?

4. Would a cap of 15 days be legal in my situation.

1. Yes, PTO days cannot be eliminated once accrued, but you could cap them to prevent additional accrual. You are not obligated to pay them in added gross, but can leave them in the employees' bank of paid time off.

2. Yes, caps are legal, but it is illegal to eliminate days through not allowing for 'foll over.'

3. Yes, assuming your employees are at-will employees, you can notify them immediately of the change and implement it. You can then change the employment guide that you use to update your policies.

4. Yes, since you are not legally obligated to provide your employees with any PTO, you can definitely cap it at 15 days or any number of days you decide.

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