Integrators, security contactors and other industry-related firms doing business in California will want to consider a recent court ruling that upholds an employer’s right to impose a clearly defined waiting period before an employee can begin accruing vacation time.

The San Diego division of the Calif. Court of Appeal recently ruled, so long as an employer’s vacation policy clearly states employees do not earn vacation time unless they are retained beyond a specified waiting period, employers do not have to provide vacation pay vesting on the first day of employment.

If an employee is terminated or quits shortly after being hired, the employer is not legally bound to pay a portion of the value of vacation time the employee would have earned had the employee lasted beyond the clearly expressed time period.

The Court of Appeal addressed the issue in Minnick v. Automotive Creations Inc., which was decided in late July. Nathan Minnick sued his former employer, alleging the company’s vacation policy violated state law because it required employees who worked for less than one year to forfeit vested vacation pay. Minnick, who was employed for six months, sought penalties under California’s Labor Code Private Attorney General Act of 2004 (PAGA).

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The Court of Appeal found the defendants’ vacation policy lawfully provided that employees did not begin to earn vacation time until after their first year. Because Minnick’s employment ended during his first year, he did not have any vested or accrued vacation pay. Therefore, he was not owed any vacation wages.

The Calif.-based law firm Mitchell Silberberg & Knupp discussed the court’s decision on its web site. In a blog post, the law firm alerts employers to be mindful in the wake of the Minnick decision if they are going to place conditions on vacation time, the policy language needs to unambiguously inform the employees of any such conditions.

“The policy language in Minnick was found to be lawful primarily because it specifically informed the employees in advance that they did not earn any vacation until they completed one year of service, and also that they did not earn or accrue any vacation during that first year,” the law firm stated.

This article originally appeared in CE Pro sister publication Security Sales & Integration.