Many California businesses that shut down when the pandemic started in the U.S. two years ago almost to the day furloughed staff indefinitely, especially in the hospitality industry. Did California law entitle those furloughed employees to the immediate payout of the value of their accrued but unused vacation time?
Los Angeles federal judge Dale Fischer answered that question last month in Hartstein v. Hyatt Corporation. The question arose, she wrote, “following an unprecedented situation: a global pandemic that caused businesses to change workplace policies rapidly and, in many cases, lay off, discharge, or terminate workers as it became clear the pandemic would not quickly subside.”
Background
In March 2020, Hyatt Hotels furloughed much of its workforce. The company stopped paying the employees, while advising them Hyatt did not intend to sever employment. Furloughed employees continued to have their health insurance premiums paid by Hyatt; remained eligible for complimentary hotel stays; and, contrary to the company’s announcement to furloughed employees, continued to accrue vacation time.
Hyatt also allowed furloughed employees to cash out earned, unused vacation upon request. Payment was made the next regular payday after it was requested. The Hyatt Manchester in San Diego reported paying out $1,181,065.12 in accrued vacation wages and floating holidays to 609 employees.
In June 2020, Hyatt made the furlough permanent and paid out the value of all unused vacation to...
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