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Walmart Failure to Pay Accumulated Vacation Time California Class Action

Front of a Walmart Store

Walmart is an extremely large company. As such, it has a lot of clout in making up its own company rules and requiring that employees adhere to them. However, this class action brings suit against Walmart, Inc. and Wal-Mart Associates, Inc. for violations of California’s state labor laws in denying employees accrued vacation time pay when they leave the company.

The class for this action is all persons who worked for Walmart as a salaried employee and/or salaried associate in California and who separated from that employment at any time between May 20, 2015 and the date the class in this case is certified.

Plaintiff Justin Haskins was a store manager at a Walmart in Escondido, California between May 2007 and February 2019.

The allegations are overall fairly simply: The complaint claims that when employees separated from Walmart with vested and accrued vacation time, they were forced to give up all but five days of that time and the pay owed for it.

Unfortunately, California’s Labor Code Section 227.3 expressly prohibits this. It requires, the complaint says, “all vested vacation pay to be paid to a terminated employee at his or her final wage rate at the time of separation, and that an employer [cannot] enact a policy which provide[s] for forfeiture of vested vacation time upon separation.”

This is the first cause of action set forth in the complaint. The other two flow from it in a kind of ripple effect. 

The second cause of action concerns the company’s alleged violations of Labor Code Sections 201, 202, and 203. Section 201 specifies that, if an employer discharges an employee, “the wages earned and unpaid at the time of discharge [are] due and payable immediately.” 

Section 202 specifies that, if an employee leaves employment voluntarily, wages earned and unpaid must be paid within 72 hours, unless the employee has given 72 hours’ notice, in which case the earned and unpaid wages must be paid at the time of quitting. 

The unpaid earnings in this case would include the vacation time pay.

What if the employer does not pay as required? If the employer does not pay on schedule, the complaint says, Section 203 provides that “the wages of the employee shall continue as a penalty from the due date thereof at the same rate until paid or until an action therefore is commenced” for up to thirty additional days. Thus, the unpaid vacation pay would incur an extra thirty days’ pay penalty for each worker who has been denied it.

Finally, the complaint claims that the company has violated the state’s Business & Professions Code because “a practice that violates any state law or regulation may constitute the basis of an unlawful business practice prohibited by the Business and Professions Code…” That might include the violation of the requirement to pay accrued vacation time at separation.

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