In Thea v. Gen­er­al Atom­ics the Cal­i­for­nia appel­late court reaf­firmed and clar­i­fied the vaca­tion rule.  In this case, the com­pa­ny offered exempt employ­ees accrued PTO, and requires them to use their PTO hours when they are absent from work for par­tial or full days.  Deduc­tions are made from accrued PTO for par­tial day absences of any length.  They con­tin­ue to accrue PTO and their full salary dur­ing this “leave” They are not required to use PTO if their work week exceeds 40 hours, however.

The plain­tiff said the rule for par­tial day deduc­tions was unlaw­ful, vio­lat­ing the law pro­hibit­ing for­fei­ture of wages (includ­ing accrued vaca­tion or annu­al leave).  The tri­al court dis­agreed with the plain­tiff and upheld the rule for the employ­er.  On appeal the Cal­i­for­nia court agreed.