Did you know that the common corporate “use it or lose it” vacation policy is illegal in California?

Q. My employer’s vacation policy provides that if I do not use all of my annual vacation entitlement by the end of the year, that I lose the unused balance. Is this legal?

A. No, such a provision is not legal. In California, vacation pay is another form of wages which vests as it is earned (in this context, “vests” means you are invested or endowed with rights in the wages). Accordingly, a policy that provides for the forfeiture of vacation pay that is not used by a specified date (“use it or lose it”) is an illegal policy under California law and will not be recognized by the Labor Commissioner.

I’ll be (very politely) bringing this to the attention of my employer as the year draws to a close. I’m actually in the red as far as vacation time goes, but others with whom I work are in the position of forfeiting earned vacation due to deadlines.