Use or Lose

• According to California's Division of Labor Standards Enforcement employers cannot require employees to use all their accrued vacation time within a certain period of time. "Use or lose" rules are illegal.
  
  

Accrued Leave Limits

• Although employers cannot require employees to use all accrued vacation time they can put reasonable limits on how many hours employees may accrue. A court case, "Boothby v. Atlas Mechanical" established the employer's right to limit the number of hours of vacation pay employees can accrue.
  
  

Employment Termination Rights

• Section 227.3 of California's Labor Code protects the vacation leave employees have accrued if they lose their job, regardless of the reason for termination. Unless a collective-bargaining contract dictates otherwise, any unused vacation pay accrued at the time of termination is considered unpaid wages the employer must pay the employee in their last paycheck.