Authored by Laura Reathaford
On January 20, 2011, the District Court for the Southern District of California granted Home Depot’s motion to dismiss a putative class action involving plaintiff’s claim for penalties associated with Home Depot’s purported failure to include earned vacation hours on employee itemized wage statements. Plaintiff’s complaint alleged that California Labor Code Section 226(a), which requires an employer to itemize an employee’s “gross wages earned” on employee wage statements, includes a line item for earned vacation wages.
In determining that earned vacation hours need not be itemized, the court recognized that the plain language of Section 226(a) does not enumerate a requirement that earned vacation hours be itemized on wage statements. The court then looked at the statutory scheme. It recognized that California Labor Code §200, which defines “wages,” does not indicate that “wages” include earned vacation hours. Further, Labor Code §227 distinguishes earned vacation hours from wages insofar as it permits an employee to transform his unused vacation hours into wages at the time of termination. Finally, the court noted that pursuant to Labor Code §227.5, employers are required to furnish employees with statements of payments made pursuant to a vacation plan. The court found that this provision, in particular, provides employees with a mechanism to track their earned vacation hours.
Finally, the court noted the absence of any legal authority to support the plaintiff’s position. Plaintiff cited to cases which effectively equated earned vacation hours with “additional wages.” The court indicated that this authority was not persuasive because none of the cases addressed whether earned vacation hours are a “wage” within the statutory meaning of §226(a). The case is Heinzman v. Home Depot USA, Inc., (SACV 10-01827-CJC (RNBx), S.D. Cal. (So. Div.) 1/20/2011).