California Court Of Appeal Confirms Employers May Require Salaried Exempt Employees To Use Vacation/PTO Time For Partial Day Absences In Any Increment

In Rhea v. General Atomics, the California Court of Appeal issued an important ruling confirming that employers may require salaried exempt employees to use accrued vacation/PTO time for partial day absences in any increment, including increments of less than four hours, without violating the salary basis requirements for exempt status under California wage and hour law. Rhea puts to rest a lengthy dispute on this issue and is welcome news for many employers in California that previously adopted policies requiring employees to use vacation/PTO time for any partial day absences of any length.

California's white collar exemptions (executive, administrative, and professional) all require employees to be paid on a salary basis. Generally this means, subject to certain exceptions, if a salaried exempt employee...