Can we have different vacation policies for different worksites and different groups in the same office?

Yes, California employers may establish different vacation policies among their employees.

Paid vacation is a discretionary employee benefit offered by employers. Because no laws require employers to provide paid vacations to employees, companies may decide who is entitled to paid vacation leave, the amount of leave and when vacation can be taken.

Employers have the flexibility to establish different accrual rates or rules based on multiple factors.

Companies also may use paid vacation to attract new employees or to incentivize and reward current employees. For example, applicants may negotiate a higher vacation amount than is provided in the company’s general vacation policy, or a company might grant an additional week of paid vacation to reward the outstanding performance of an employee.

Different vacation policies cannot be based on an illegal reason or have a disparate impact on protected groups.

In establishing distinctions between groups of employees in paid vacation policies, a company would violate discrimination laws if the vacation policy were based on a classification prohibited by law. A company cannot adopt different policies based on race, gender, sexual orientation, religion, age, nationality or any other protected characteristic.

Companies also should be alert to vacation policies that have a disparate impact on certain groups. For example, agricultural workers who receive fewer vacation days than office workers may allege the discretionary policy affects them unfairly.

Different vacation policies are rarely illegal. However, treating one group of employees more favorably than others may lower morale and cause resentment between the groups. Employees understand that working longer for a company may warrant more paid vacation. It may be harder to understand why employees in the Los Angeles office get more paid days off than those working in San Francisco.

Unlike many areas of employment, the state doesn't heavily regulate vacation policies. California employers can establish different vacation policies for their employees so long as the differences are not based on illegal reasons or do not adversely affect a protected group. Ideally, if challenged, companies can explain the reasons they have chosen to adopt different policies for different groups.

Read more about Vacation in the HR Library.