Recently, in McPherson v. EF Intercultural Foundation, Inc., the California Court of Appeals addressed the legality of unlimited or uncapped vacation policies under California law. Three exempt employees sued the company for payment of unused vacation time at termination, despite being subject to an unlimited paid time off policy, because they argued the policy was neither unlimited in policy nor practice. The court agreed. Fortunately for California employers, the decision sets forth guidelines for employers to properly implement such policies and avoid liability.  For more information, see our legal update, California court finds employer liable under unlimited vacation policy.

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