Can a private company put a cap on vacation accrual?

Currently, I can only accrue 180 hours of vacation leave. My question is whether a company can require me to take vacation leave or lose it if I surpass the 180 hours of leave.

Asked on July 4, 2017 under Employment Labor Law, California


M.D., Member, California and New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

In CA, a company can place a cap on vacation accrual. This means that once employees reaches a certain number of days, they will stop accruing vacation until they use some of their vacation. This allows their employers to maintain some control over such accrual and prevent employees from racking up unreasonable amounts of vacation time. That having been said, employers cannot have a “use-it-or-lose-it” vacation policies. Under such a policy, accrued vacation must be used by a certain date or it is forfeited. This is because accrued vacation is considered as wages earned, so a use-it-or-lose-it policy is seen as illegalan withholding wages.

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 3 years ago | Contributor

Yes, caps on vacation accrual are legal and common. Remember: there is no law requiring employers to give vacation in the first place--an employer could refuse to provide any. If they choose to allow employees to earn vacation, the employer may put reasonable limits on it, such as a maximum amount which may be accrued.

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