California Unpaid PTO Investigation

By Bruno OrtegaWage Theft

Migliaccio & Rathod LLP is investigating employees who have experienced unpaid PTO and vacation wages to departing employees in violation of California labor laws.

What’s the Issue?

Under California law, paid vacation and PTO are considered earned wages. Once accrued, they cannot be forfeited—even at the end of employment. Employers must also pay out all accrued vacation/PTO at the employee’s final rate of pay, which includes non-discretionary bonuses, incentive pay, and commissions when applicable.

A recent lawsuit filed against Swift Transportation highlights a broader issue affecting workers across California: some employers are allegedly:

  • Failing to pay all vacation/PTO earned upon separation;

  • Excluding bonuses and incentives from the payout calculation, resulting in underpayment;

  • Issuing inaccurate wage statements that do not reflect vacation/PTO owed or paid;

  • Delaying final paychecks, in violation of California’s prompt payment laws.

These practices may violate multiple provisions of California’s Labor Code and constitute unfair business practices.

Why Investigating Unpaid PTO Matters

Vacation and PTO wages are earned compensation, not optional benefits. When companies shortchange workers at the end of employment:

  • Employees lose wages they’ve already earned;

  • Final paychecks are incomplete or delayed, causing financial strain;

  • Wage statements are inaccurate, making it harder for workers to enforce their rights;

  • The employer may be liable for waiting time penalties and statutory damages.

What May Be Unlawful

Employers may be violating California law by:

  • Failing to pay all accrued and vested vacation/PTO wages at termination;

  • Calculating vacation payouts without including bonuses or incentives;

  • Providing incomplete wage statements that omit vacation/PTO;

  • Delaying payment of wages owed at the end of employment.

These are violations of California Labor Code §§ 201–203, 226, 227.3, and may also amount to unfair competition under Business & Professions Code § 17200.

You May Have a Legal Claim If:

  • You worked in California and earned vacation or PTO benefits;

  • You were not paid all accrued vacation/PTO wages when you left the company;

  • Your vacation payout did not include incentive pay or bonuses;

  • Your wage statements were missing or inaccurate;

  • Your final paycheck was late or incomplete.

Contact Us

If your former employer withheld or underpaid your vacation or PTO wages in California, you may be eligible to join a class action or pursue individual claims for compensation and penalties.

Please complete the confidential questionnaire below. For questions or to speak with an attorney, email [email protected] or call (202) 470-3520.