Unlike some other states, California does not allow “use-it-or-lose-it” vacation policies. Under a “use-it-or-lose-it” policy, accrued vacation must be used by a certain date – usually by the end of the year – or it is forfeited.
Because accrued vacation is considered earned wages, use-it-or-lose-it policies are seen as illegally withholding wages owed to employees.
Employers can, however, place a cap on vacation accrual. In other words, once employees reaches a certain number of days, they will stop accruing vacation until they use some of their vacation. This allows employers to maintain some control over vacation accrual and prevent employees from racking up unreasonable amounts of vacation time.
David Payab, Esq. from The Law Offices of Payab & Associates can be reached @ (818) 918-5522 or by visiting http://payablaw.com