Under a "use it or lose it" policy, an individual who does not use all of his or her accrued vacation pay by a particular time forfeits the right to be paid fro those days at a later date. The California Supreme Court held, however, that vacation pay vests as it is earned, and any vacation earned cannot be taken away. Vacation pay is, in effect, additional wages for services performed, the receipt of which is postponed. Thus, this "use it or lose it" policy is unlawful. Comments are closed.
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