Collective Bargaining Exception to Immediate Vacation Pay Law Requires Clear and Unmistakable Waiver

The Second District today articulated a "clear and unmistakable" standard for a waiver of the right to immediate payment of vacation time, under the collective bargaining exception to Labor Code section 227.3.  Choate v. Celite Corporation, No. B239160, __ Cal. App. 4th __ (2d Dist. May 2, 2013).  Labor Code section 227.3 requires full payment of vested vacation time upon termination:

Unless otherwise provided by a collective-bargaining agreement, whenever a contract of employment or employer policy provides for paid vacations, and an employee is terminated without having taken off his vested vacation time, all vested vacation shall be paid to him as wages at his final rate in accordance with such contract of employment or employer policy respecting eligibility or time served . . . .

(Emphasis supplied.)

The court rejected an implied waiver standard, instead holding that for the exception to apply, the CBA must clearly and unmistakably waive the right to immediate payment:

We hold that a collective bargaining agreement "otherwise provide[s]" and thereby abrogates an employee's statutory right under section 227.3 to immediate payment for vested vacation time only if the agreement clearly and unmistakably waives that right. 

(Emphasis supplied.)

​You can read more in California Wage & Hour Law.