118 VACATION PAY

摘要

Vacation pay programs that are paid out of an employer's general assets may be regulated by state law. Such state laws would not be preempted by ERISA regulation of benefit plans, courts have held. That is because payment of compensation to employees on vacation out of general assets constitutes a payroll practice rather than the establishment of a welfare benefit plan. Thus, a California state law requiring employers to pay in cash the value of unused pro-rata vacation time upon an employee's termination was valid and not preempted by ERISA.