Legal Question in Employment Law in California

Re: Plant Closure - Notification and Severance

You say that a larger company is closing your California business. I take that you mean that the company is not itself going out of business or filing bankruptcy. If so, you would probably not get the full payments you are entitled to.

If the company has a severance plan in place, it is required to follow the plan. A formal severance plan is regulated by federal ERISA law, and the California Labor Commissioner has no authority over it (unlike an individual severance arrangement which can be enforced by the CA Labor Commissioner).

Vacation pay is, however, regulated by California law. In California, vacation pay is considered wages, as is sick pay if your employer has a policy of allowing a certain number of sick days per year (for instance, if your company says it allows 6 sick days per year). Courts have said that such time is not a gift or gratuity, but is earned incrementally each day you work. Any unused vacation time and sick time must be paid, along with other wages, at the time and place of termination or substantial penalties may apply. Be aware that even if your employer says you lose any unused vacation time each year, such a policy is illegal in California. As it stands now, courts have decided that unused time for the prior two years must be paid.

Re: Plant Closure - Notification and Severance

It does not appear that there are enough employees affected to kick in a federal law that requires an employer to give 60 days notice of closure. Regarding severance, if there is a fixed severance plan, the employer is required to follow the terms of the plan. Without such a plan, employers have no obligation to pay severance. It is purely discretionary. Finally, employers of California employees must pay all accrued vacation pay due. This includes a part of the vacation time earned during the year, even if the employee hasn't worked to the anniversary date. By the way, "use it or lose it" vacation policies are illegal in California.