Hyatt Found to Violate California Labor Law by Delaying Vacation Time Payout to Laid-Off Employees

In a recent case involving Hyatt, the 9th Circuit Court of Appeals has ruled that the company violated California labor law by failing to promptly pay out vacation time to its laid-off employees. The court’s decision comes after it found that Hyatt’s decision to delay payment until June 2020, when the employees were formally terminated, was in violation of the prompt payment provisions outlined in the California Labor Code.

Violation of California labor law

According to court documents, the California Labor Code requires employers to promptly pay out vacation time to employees upon termination. The court determined that Hyatt’s delay in paying out vacation time to its laid-off employees was a direct violation of this provision. The court’s ruling reverses the summary judgment previously granted in favor of Hyatt by the U.S. District Court for the Central District of California and remands the case back to the district court for further proceedings.

Defining ‘Discharge’

One of the crucial aspects considered by the appeals court was the definition of ‘discharge.’ Given that the law does not explicitly define this term, the court sought clarity on whether a temporary layoff, with no specified return date, would qualify as a discharge under Section 201 of the California Labor Code. Interestingly, the court found no existing case law or cited cases that provided clear guidance on this matter.

DLSE Opinion and Guidance

In the absence of relevant case law, the appeals court turned to the California Division of Labor Standards Enforcement (DLSE) for guidance. The DLSE, through an opinion letter and its policies and interpretations manual, stated that a temporary layoff without a specific return date within the normal pay period would be considered a discharge, triggering the prompt payment provisions of the California Labor Code.

Ruling based on DLSE guidance

Relying on the DLSE’s interpretation, the appeals court concluded that Hyatt should have paid accrued vacation pay to its employees during the initial layoff in March 2020. As the temporary layoff exceeded the normal pay period and had no specified return date, the court ruled that the delayed payout of vacation time was a violation of the state law’s prompt payment provisions.

Acknowledging Pandemic Uncertainty

While acknowledging the challenging circumstances faced by businesses during the early period of the pandemic, the appeals court emphasized that Hyatt’s actions, although understandable, did not absolve the company from the violation. The court maintained that the March 2020 layoff qualified as a discharge under Section 201 of the California Labor Code, and therefore, Hyatt was obligated to promptly pay out the accrued vacation time to its employees.

Hyatt’s response

As of now, Hyatt has not issued an immediate comment or response to the court’s ruling. It remains to be seen how the company will address the violation of California labor law.

The recent ruling by the 9th Circuit Court of Appeals has found Hyatt in violation of California labor law for failing to promptly pay out vacation time to its laid-off employees. The court’s decision reverses the previous summary judgement in favor of Hyatt and emphasizes the importance of complying with the prompt payment provisions outlined in the California Labor Code. While the court acknowledged the challenges posed by the pandemic, it maintained that the delay in vacation time payout was a violation of the law. This ruling serves as a reminder to employers to adhere to labor laws and promptly compensate employees for their accrued benefits upon termination.

Explore more

Is Recruiting Support Staff Harder Than Hiring Teachers?

The traditional image of a school crisis usually centers on a shortage of teachers, yet a much quieter and potentially more damaging vacancy is hollowing out the English education system. While headlines frequently focus on those leading the classrooms, the invisible backbone of the school—the teaching assistants and technical support staff—is disappearing at an alarming rate. This shift has created

How Can HR Successfully Move to a Skills-Based Model?

The traditional corporate hierarchy, once anchored by rigid job descriptions and static titles, is rapidly dissolving into a more fluid ecosystem centered on individual competencies. As generative AI continues to redefine the boundaries of human productivity in 2026, organizations are discovering that the “job” as a unit of work is often too slow to adapt to fluctuating market demands. This

How Is Kazakhstan Shaping the Future of Financial AI?

While many global financial centers are entangled in the restrictive complexities of preventative legislation, Kazakhstan has quietly transformed into a high-velocity laboratory for artificial intelligence integration within the banking sector. This Central Asian nation is currently redefining the intersection of sovereign technology and fiscal oversight by prioritizing infrastructural depth over rigid, preemptive regulation. By fostering a climate of “technological neutrality,”

The Future of Data Entry: Integrating AI, RPA, and Human Insight

Organizations failing to recognize the fundamental shift from clerical data entry to intelligent information synthesis risk a complete loss of operational competitiveness in a global market that no longer rewards manual speed. The landscape of data management is undergoing a profound transformation, moving away from the stagnant, labor-intensive practices of the past toward a dynamic, technology-driven ecosystem. Historically, data entry

Getsitecontrol Debuts Free Tools to Boost Email Performance

Digital marketers often face a frustrating paradox where the most visually stunning campaign assets are the very things that cause an email to vanish into a spam folder or fail to load on a mobile device. The introduction of Getsitecontrol’s new suite marks a significant pivot toward accessible, high-performance marketing utilities. By offering browser-based solutions for file optimization, the platform