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

Can Readers Tell Your Email Is AI-Written?

The Rise of the Robotic Inbox: Identifying AI in Your Emails The seemingly personal message that just landed in your inbox was likely crafted by an algorithm, and the subtle cues it contains are becoming easier for recipients to spot. As artificial intelligence becomes a cornerstone of digital marketing, the sheer volume of automated content has created a new challenge

AI Made Attention Cheap and Connection Priceless

The most profound impact of artificial intelligence has not been the automation of creation, but the subsequent inflation of attention, forcing a fundamental revaluation of what it means to be heard in a world filled with digital noise. As intelligent systems seamlessly integrate into every facet of digital life, the friction traditionally associated with producing and distributing content has all

Email Marketing Platforms – Review

The persistent, quiet power of the email inbox continues to defy predictions of its demise, anchoring itself as the central nervous system of modern digital communication strategies. This review will explore the evolution of these platforms, their key features, performance metrics, and the impact they have had on various business applications. The purpose of this review is to provide a

Trend Analysis: Sustainable E-commerce Logistics

The convenience of a world delivered to our doorstep has unboxed a complex environmental puzzle, one where every cardboard box and delivery van journey carries a hidden ecological price tag. The global e-commerce boom offers unparalleled choice but at a significant environmental cost, from carbon-intensive last-mile deliveries to mountains of single-use packaging. As consumers and regulators demand greater accountability for

BNPL Use Can Jeopardize Your Mortgage Approval

Introduction The seemingly harmless “pay in four” option at checkout could be the unexpected hurdle that stands between you and your dream home. As Buy Now, Pay Later (BNPL) services become a common feature of online shopping, many consumers are unaware of the potential consequences these small debts can have on major financial goals. This article explores the hidden risks