California law does not require private employers to offer paid vacation or paid holidays. However, once an employer promises vacation or PTO, that time counts as wages. It builds up as you work, it cannot expire, and any unused balance must be paid out when the job ends. Paid sick leave is the exception, because every employer must give at least 40 hours or five days a year.
The rules below are current as of October 2026. They apply statewide, and workers inside the City of Los Angeles get extra sick leave on top. For more local explainers, see our Los Angeles and California guides.
What the law requires and what it leaves to employers
Most confusion comes from mixing up different kinds of time off. Each one follows its own rule, so it helps to see them side by side.
| Type of time off | Required by state law? | Paid? | Paid out when you leave? |
|---|---|---|---|
| Vacation | No | Yes, if the employer offers it | Yes, all earned and unused time |
| Combined PTO bank | No | Yes, if offered | Yes, same as vacation |
| Paid sick leave | Yes, 40 hours or 5 days a year | Yes | No, unless the policy says so |
| Paid holidays | No | Only under a policy or contract | No, except floating days you can use anytime |
| Extra pay for holiday work | No | Only normal overtime rules | Not applicable |
| Bereavement leave | Yes, up to 5 days (5+ employees) | No, unless the policy pays it | Not applicable |
| Time off to vote | Yes, statewide elections | Up to 2 hours | Not applicable |
In short, sick leave is the only paid time off every California worker can count on. Everything else depends on what the employer chooses to offer. Once it is offered, though, the state sets firm rules.
Vacation and PTO: earned time is wages
In California, vacation vests as you work. That means it becomes yours day by day, like a paycheck. The Labor Commissioner’s vacation FAQ gives a simple example. If a job offers two weeks a year, a worker who has been there six months has already earned five days.
A combined PTO bank works the same way. When an employer merges vacation and sick days into one pool you can use for any reason, the whole pool follows vacation rules. So PTO cannot be forfeited, and it must be paid out at the end of the job.
Employers still keep a fair amount of control. For example, they can:
- Decide when vacation can be taken and how much at a time.
- Exclude part-time or temporary staff from the plan, if the policy says so clearly.
- Set a genuine waiting period, such as no vacation during the first six months.
- Cash out unused vacation at the end of each year instead of carrying it over.
A waiting period has to be real, though. If a plan gives four weeks in year two and two weeks after that, the state treats the extra time as vacation secretly earned in year one.
No “use it or lose it,” but caps are legal
A policy that wipes out unused vacation on a set date is illegal in California. Because the time is already earned, erasing it would mean taking back wages. The state Supreme Court settled this principle back in 1982.
A cap is different. An employer may say that accrual stops once a balance reaches a limit, for example 200 hours. Nothing is lost, and new vacation starts building again once the balance drops below the cap. Still, the cap must be reasonable and leave real time to use the days.
Getting paid for unused vacation when you leave
Under Labor Code section 227.3, all earned and unused vacation must be paid when employment ends. The reason does not matter. It applies if you quit, get fired or are laid off. The time is paid at your final rate of pay, so a recent raise counts in full.
Here is how it adds up. A worker earning $25 an hour who leaves with 60 hours banked is owed $1,500. That money must arrive with the final paycheck, and the deadlines are strict:
- Fired or laid off: final pay is due immediately, on the last day.
- Quit with at least 72 hours’ notice: final pay is due on the last day.
- Quit without notice: final pay is due within 72 hours.
If the employer pays late on purpose, it can owe a waiting-time penalty. That penalty is one day’s wages for each day of delay, up to 30 days. A union contract can set different vacation terms, which is the main exception to the payout rule.
Floating holidays and personal days often count as vacation too. If you can take them at any time for any reason, the Labor Commissioner generally treats them as vested time, so unused days are paid out. A floating day tied to a set event, such as your birthday, is treated as a holiday instead.
Paid sick leave: the one PTO every employer must give
Since January 1, 2024, California employers must let workers use at least 40 hours or five days of paid sick leave a year, whichever is more. Someone on 10-hour shifts can therefore use at least 50 hours. The rules come from the state paid sick leave law, which the Labor Commissioner explains on its paid sick leave page.
The main points for 2026:
- Who qualifies: anyone who works 30 days for the same employer within a year in California, including part-time and temporary staff.
- When you can use it: from your 90th day on the job.
- How it builds: at least one hour for every 30 hours worked, or the full amount given up front each year.
- Caps: use may be limited to 40 hours or five days a year, and the saved balance to 80 hours or 10 days.
- When the job ends: unused sick leave does not have to be paid out. If you are rehired within 12 months, though, your old balance comes back.
An employer that already offers a PTO bank does not need a separate sick leave plan. The PTO must simply meet the same minimums. In that case, since the bank follows vacation rules, the unused balance is paid out at the end.
Extra sick leave in the City of Los Angeles
Workers inside city limits get more. Under the city’s minimum wage ordinance, employers must allow at least 48 hours of paid sick leave a year. Unused hours carry over, and any cap on the balance must be at least 72 hours. The ordinance covers anyone who works at least two hours a week in the city for the same employer for 30 days or more.
When city and state rules differ, the employer has to follow whichever is more generous to the worker. The city’s Office of Wage Standards enforces these rules and takes complaints. The same office enforces the city minimum wage of $18.42 an hour, which our California minimum wage guide covers in detail.
Holiday pay: what the law says about working on holidays
California treats a holiday like any other workday. According to the Labor Commissioner’s holiday FAQ, employers do not have to close, give the day off or pay for holidays not worked. They also owe no special premium for working on a holiday, a Saturday or a Sunday.
The only extra pay comes from the normal overtime rules. Non-exempt workers earn time and a half after eight hours in a day or 40 in a week. They earn double time after 12 hours in a day. So someone who works eight hours on the Fourth of July and 40 hours that week gets straight pay for the holiday.
Paid holidays you do not work also do not count toward overtime. For instance, if your office closes on Memorial Day with pay and you then work Tuesday to Saturday, you are paid for 48 hours. Yet overtime is based on hours worked, so none of it is owed at the overtime rate.
The official list of state holidays applies to state offices, courts and public schools. Private employers pick their own holidays. That said, if a written policy or union contract promises holiday pay or double time, the employer must honor it. It then becomes part of your wages.
Other leave that can affect your pay
A few other laws give time off, even though most of it is unpaid:
- Voting: if you cannot vote outside work hours in a statewide election, you may take time off. Up to two hours of it must be paid.
- Bereavement: employers with five or more workers must allow up to five days after the death of a close family member. The days can be unpaid, but you may use vacation or sick leave.
- Reproductive loss: the same employers must allow up to five days after a miscarriage, stillbirth or failed adoption.
- Paid Family Leave: this state insurance program pays benefits for up to eight weeks to bond with a new child or care for a sick relative. For 2026 claims it replaces about 70% to 90% of wages, up to $1,765 a week, according to the EDD.
Paid Family Leave comes from the state, not your employer, and it does not protect your job by itself. Job protection comes from separate leave laws. Meal and rest periods are another area where premium pay applies, and our guide to California meal and rest break laws explains them.
If your employer refuses to pay out vacation or blocks sick leave, you can file a wage claim with the Labor Commissioner. You generally have three years for unpaid wages. This article is general information, not legal advice.
Frequently asked questions
Does California law require paid time off?
Only paid sick leave is required: at least 40 hours or five days a year. Vacation and PTO are optional. Once offered, however, they count as earned wages.
Is holiday pay required in California?
No. Employers do not have to pay for holidays or pay extra for holiday work. Standard overtime still applies after eight hours a day or 40 a week.
Can my employer make me lose unused vacation?
No. “Use it or lose it” policies are illegal in California. An employer can, however, cap your balance so you stop earning more until you use some.
Do I get paid for unused PTO when I quit?
Yes. All earned and unused vacation or PTO must be paid with your final paycheck, at your final rate. Stand-alone sick leave is the exception and is not paid out.
How much sick leave do I get in Los Angeles?
Inside the City of Los Angeles, at least 48 hours a year, with a balance cap of no less than 72 hours. Elsewhere in California, the state minimum is 40 hours or five days.
Have a question about this topic? Ask in the comments below. Our editors read every comment and answer questions here, and we add useful answers to the guide.
Sources
- dir.ca.gov/dlse/faq_vacation.htm
- dir.ca.gov/dlse/faq_holidays.htm
- dir.ca.gov/dlse/paid_sick_leave.htm
- leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml
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- leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml
- leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml
- leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml
- leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml
- leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml
- leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml
- dir.ca.gov/dlse/opinions/1992-04-27.pdf
- wagesla.lacity.gov
- wagesla.lacity.gov/sites/g/files/wph1941/files/2026-04/MWO-Notice-2026 8×11…
- edd.ca.gov/en/disability/paid-family-leave
- edd.ca.gov/en/disability/Calculating_PFL_Benefit_Payment_Amounts