For the first time, a California appellate court has addressed when paid leave offered as a sabbatical is considered “paid vacation.”The distinction is important because California has long held that separating employees must be paid for any accrued “paid vacation," whereas leave granted as part of a true sabbatical may be forfeited if not used prior to separation.
In Paton v. Advanced Micro Devices, Inc. No. H034618 (6th App. Dist., Aug. 5, 2011), the appellate court emphasized that a sabbatical is more than additional vacation time. To qualify as a sabbatical, the paid leave must be “intended to retain the most experienced or valued employees or to enhance their future service to the employer.”Altering the Labor Commissioner’s test for a sabbatical, Paton found four factors distinguish a sabbatical from regular paid vacation:
1. A sabbatical is granted infrequently (noting that once every seven years is the traditional frequency);
2. The length of the leave is sufficient to achieve the purpose of the sabbatical—and when no conditions are set regarding how an employee spends his or her sabbatical, the length of leave should also be longer than that normally offered as vacation;
3. A sabbatical is granted in addition to regular vacation; and
4. The sabbatical program incorporates a feature that demonstrates the employee is expected to return to work after the leave is over.
Paton makes clear that employers must carefully consider whether sabbatical programs meet the new test. Any employer with a sabbatical program should document the purpose(s)/goals of the program and administer the program consistent with the identified purposes, noting that sabbaticals with no conditions on how the employee uses the leave (similar in nature to vacations) must meet additional standards.While general guidance can be gleaned from the specific facts in Paton, the court noted that the validity of each sabbatical program "will have to be decided on its own facts."Thus, employers should carefully review all of the circumstances associated with their particular sabbatical programs to ensure they are true sabbaticals.