California PTO Laws: Accrual, Carryover, and Penalties

California doesn’t require employers to offer general paid time off, but it does require paid sick leave, and it treats any vacation or combined PTO you do earn as wages. Under California PTO laws, every covered employer must provide at least 40 hours or five days of paid sick leave each year, must pay out all accrued vacation when you leave the job, and faces per-employee penalties if it withholds either one. The distinction between “sick leave” and “PTO” controls almost every practical question that follows, from carryover to your final paycheck.

How Much Paid Sick Leave You Earn

Since January 1, 2024, when Senate Bill 616 took effect, the annual minimum is 40 hours or five days of paid sick leave, and the accrual cap sits at 80 hours or ten days.¹ The accrual rate is one hour of paid sick leave for every 30 hours worked, starting on your first day of employment. You can begin using accrued time after your 90th day on the job.²

Employers have a second option. Instead of tracking hour-by-hour accrual, they can frontload the full 40 hours or five days at the start of each benefit year. Frontloading employers don’t have to carry anything over, because you start fresh each year with the full allotment.¹ For new hires on a frontloaded plan, at least 24 hours or three days must be available by the 120th calendar day, and the full 40 hours or five days by the 200th calendar day.²

Who’s Covered

Almost every worker in California qualifies. If you work for the same employer for 30 or more days within a year, you’re entitled to paid sick leave. Part-time, temporary, and per diem workers all count, and there’s no minimum employer size. A business with one employee is covered.²

A short list of workers is fully exempt: air carrier flight crews who already receive equivalent compensated time off, retired annuitants working for government entities, and railroad employees. Construction workers covered by a qualifying collective bargaining agreement are partially exempt. Their employer still can’t retaliate against them for taking leave, but the CBA’s terms can replace the statute’s accrual rules.²

What Paid Sick Leave Covers

Permitted uses go well beyond a bad cold. You can take paid sick leave for:²

Your own diagnosis, preventive care (including annual physicals and flu shots), or treatment of an existing condition.
Care for a spouse, registered domestic partner, parent, child, grandparent, grandchild, sibling, or a person you designate.
Needs related to domestic violence, sexual assault, or stalking, including medical attention, counseling, safety planning, restraining orders, or relocation.
Jury duty or appearing as a witness under subpoena, effective January 1, 2025.
Attending judicial proceedings related to violent or serious felonies if you or a family member was a victim, expanded effective January 1, 2026.

Your employer isn’t allowed to ask why you’re using paid sick leave or record the reason. They only track hours accrued and hours used.³

Carryover and the Accrual Cap

If your employer uses the accrual method, unused paid sick leave carries into the next year. The employer can cap total accumulated hours at 80 hours or ten days and can separately limit how much you use in a year to 40 hours or five days.¹ Once you hit the 80-hour ceiling, no more accrues until you draw the balance down, but the employer can’t strip time you’ve already earned. Frontloading employers skip carryover entirely because the full allotment refreshes each year.

Vacation, Combined PTO, and the Final Paycheck

Here is where sick leave and PTO diverge the most, and where most disputes come from. California treats accrued vacation as earned wages. When you leave a job for any reason, your employer must pay out all vested vacation at your final rate of pay. “Use it or lose it” vacation policies are illegal.⁴

Paid sick leave works the opposite way. Nothing has to be paid out at termination. If the same employer rehires you within 12 months, your previously accrued sick leave must be restored.²

Many California employers combine vacation and sick leave into a single PTO bank. That’s legal as long as the combined policy meets or exceeds the paid sick leave minimum: 40 hours or five days available for health reasons per year, with proper accrual and carryover.² But because the vacation portion is wages, lumping the two together makes the entire PTO balance payable when you leave. A standalone sick leave policy carries no payout obligation. The structure of the policy decides what hits your final paycheck.

Unlimited PTO Policies

Unlimited PTO is common in California tech and professional workplaces, and it can comply with the paid sick leave law. The employer must indicate “unlimited” on wage statements or in a separate written notice provided each pay period.¹

Vacation payout is the harder question. A California court has held that an employer cannot avoid the vacation payout rule simply by labeling the policy “unlimited” while quietly limiting how much time workers actually take. To stay clear of payout liability, an unlimited policy should state in writing that the time off is not additional compensation, spell out both the employee’s and the employer’s rights, and in practice let workers take real time off. A policy that functions as a disguised cap, approving little actual leave while calling itself unlimited, can be treated by a court as vested wages owed at termination.

What Must Appear on Your Wage Statement

Your employer has to show your available paid sick leave on your itemized wage statement or in a separate written document given to you on each payday. Unlimited plans can simply say “unlimited.”¹

Separately, employers must keep records of hours worked, sick days accrued, and sick days used for at least three years, and must make them available to the Labor Commissioner on request and to employees under the same rules that govern access to payroll records. If an employer fails to keep adequate records, the law presumes the employee is entitled to the maximum accrual, and the employer has to overcome that presumption with clear and convincing evidence.³

Retaliation Is Prohibited

An employer cannot fire, threaten, demote, suspend, or discriminate against you for using accrued sick leave, filing a complaint with the Labor Commissioner, or cooperating in an investigation.² Point-based attendance policies that count a protected sick day as an unexcused absence are a per se violation. Every point docked for a lawful sick day is its own violation.

Penalties for Violations

The Labor Commissioner enforces paid sick leave violations through administrative proceedings, citations, and civil actions. Penalties stack in layers:⁵

For unlawfully withheld sick days: the dollar value of the withheld days multiplied by three, or $250, whichever is greater, capped at $4,000 per employee.
For other harm, such as termination for using sick leave: $50 per day the violation continued, also capped at $4,000 per employee.
State investigation costs: up to $50 per day per affected employee, payable to the state.

In a civil action, the Labor Commissioner or Attorney General can seek reinstatement, back pay, the treble-damages penalty for withheld days, the $50-per-day penalty, injunctive relief, and reasonable attorney’s fees and costs.⁵ Per-employee caps sound modest in isolation, but across a workforce the exposure can climb into six figures before attorney’s fees. If you believe your employer has denied you paid sick leave or paid out your vacation incorrectly, you can file a wage claim with the Labor Commissioner’s office.

1
California Legislative Information. California Labor Code 246
2
Department of Industrial Relations. California Paid Sick Leave Frequently Asked Questions
3
California Legislative Information. California Labor Code 247.5
4
California Legislative Information. California Labor Code 227.3
5
California Legislative Information. California Labor Code LAB 248.5