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.