Can earned vacation expire in California?
No. Earned vacation is a vested wage in California, so "use it or lose it" policies are unlawful and unused vacation must be paid out at the final rate when employment ends. Employers may cap further accrual once a balance reaches a reasonable ceiling, but may not take back time already earned.
The distinction matters: a cap stops the clock going forward, which is permitted. Forfeiture erases time already worked for, which is not.
Because vacation is a wage, an unpaid balance at separation is subject to the same waiting-time penalties as any other unpaid wage.
California paid sick leave works differently — it is not a vested wage and generally need not be cashed out. Policies that lump the two together as undifferentiated PTO usually inherit the stricter vacation rules for the whole balance.
Sources
Last reviewed 2026-08-07. Informational only — not legal advice. California rules change; confirm against the current source before acting.
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