What Is Accrued Leave?
Accrued leave is the amount of paid time off (PTO) that an employee has accumulated over a period of time but has been unable to utilize. Accrued leave may include vacation, sick leave, and/or personal days according to an employer's policy regarding their PTO. Employees who are using accrued leave can take time off with continued support from their employer, and it allows employers to manage their staffing requirements as well as help support the overall health of their employees.
How Accrued Leave Works
Accrual Method
- A fixed number of PTO hours per pay period;
- A fixed number of days each month or each year.
Accrual Rate
The accrual rate is specified in the written policy from the employer and may differ from position to position, length of time with the company, or classification of employee (e.g., full-time versus part-time).
Carryover Rules
Some employers permit carrying over un-used accrued leave into the next calendar year while others have limits on the amount that can be carried over or require that the employee use their accrued leave by a specified date. Applicable state and local laws dictate those carry-over restrictions.
Accrued Leave upon Leaving Employment
Whether or not accrued leave will be paid to an employee upon termination will depend on the following:
- State law; and
- The individual employer's policy.
In many jurisdictions, accrued vacation or PTO is treated as earned wages and must be paid upon termination. Sick leave typically gets treated differently than vacation or PTO
Accrued Sick Leave in California
Accrued Sick Leave in California
The Healthy Workplaces, Healthy Families Act governs employee sick time requirements in California effective January 1, 2024.
Eligible Employees
If an employee has worked in California for an employer for at least 30 days in the last 12 months they qualify for paid Sick Leave. It includes full-time, part-time, temporary and seasonal employees.
Accrual Rate
An employee has the right to earn at least one hour of Sick Leave for every thirty hours worked. An employer may limit the total amount of Sick Leave accrued to eighty hours or ten days.
Using Paid Sick Leave
An employee can start using Paid Sick Leave after ninety days. Employers may limit the amount of Sick Leave an employee can use in a year to forty hours or five days. Paid Sick Leave can be used for an employee's own health needs, to care for a family member, or for a reason related to domestic violence, sexual assault or stalking.
Carrying Over Unused Sick Leave
Sick Leave accrued during one year will carry over to the following year. An employee's use of Sick Leave will still be subject to the sick leave cap above.
Unused Sick Time at the End of Employment
California Law does not require an employer to pay unused Sick Leave. If the employee is rehired within one year, all Sick Leave that was earned, but not used will be restored to that employee.
Employer Responsibilities
Employers must keep Sick Leave records for three years. Employers must give notice of how much Sick Leave is available to employees on their wage statement. Post required employee rights notices in a visible workplace location.
Local Ordinances
Some California cities and counties have stricter sick leave laws. Employers must follow the rule that provides the greatest benefit to employees.