Asked in Employment Law for California

Q: I have been refused unclaimed PTO pay. This should be illegal in California - does being an intern make any difference?

I have spent one year working as an intern in California. The contract specified a rate per hour and gave PTO. I did not use any of this owing to only taking days in lieu after working many hours overtime.

At the end, I was told I would not be paid my PTO owing to a 'use it or lose it' policy, which is supposed to explicitly be illegal in California - PTO is considered as days already worked but not yet paid. However I was told that the PTO granted was not a 'policy', but a 'component of the internship', seemingly meaning that this law does not apply to this PTO. This doesn't sound right at all. I cannot find any law that would seem to allow this.

The contract also stated that we were overtime exempt employees and would not be paid overtime. Again, I can only find information stating that California paid interns are not supposed to be exempt regardless of what the contract states.

Does it make any difference that I am on the internship through an international program?

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1 Lawyer Answer
Francis X. Pray
Francis X. Pray
  • Newport Beach, CA
  • Licensed in California

A: PTO is the equivalent of wages earned, and must be paid immediately on termination of employment. PTO can be capped, but it cannot be forfeited -- i.e., the "use it or lose it" policy is illegal in California. Compensatory Time Off [CTO] must meet California conditions: Labor Code Section 204.3:

-- The employee requests CTO, in writing, in lieu of overtime.

-- The employee is regularly scheduled to work no less than 40 hours in a workweek.

-- There is a written agreement for CTO before the work is performed.

-- Accrued CTO must be paid out when the employee terminates employment.

Note also that the CTO is to be given not just for the hour worked over 8 in a day, but at the overtime rate of time: 1 hour worked = 1.5 hours off up to 12 hours, and 2 hours off over 12 per day.

The reference to "intern" status is vague where you are being paid. A true intern, usually as part of an academic requirement and approved sponsorship, is unpaid. As an intern, your work duties are by definition in training and under continuous supervision, with little or no discretion to decide matters of significance to the company. Bottom line: you are non-exempt. Demand your overtime and money equivalent of unused CTO. You likely have a claim for the extra 1/2 hourly rate even for each hour you were allowed to take off at base hourly pay.

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