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Accrued vacation time

What is the minimum and maximum legal cap on accrued vacation or PTO for California that an an employer can place on PTO. Or can the employer just decide the limits when to cap accrued vacation time and not let it accrue till it is used.

There is no California or federal law that establishes minimum or maximum limits for accrued vacation in the state. As an employer, you can implement any limits that you like. There is no law that requires an employer to give paid vacations to workers, even in California. If you do grant paid vacations, you determine the policies surrounding them. The same is true of Paid Time Off, or PTO.

Capping vacation time is one of the few ways a California employer can limit vacation, since employees must be paid for vacation that is not carried over. When vacation is capped, no time is lost. However, the employee does not earn any additional vacation until some is used. This is legal in California, and every other state.

You could cap vacation at 4 hours if you liked, and not allow an employee to earn any more until those 4 hours were used. Or, you could cap vacation at 200 hours or more — and many employers do so. Of course, there is no law that you must cap vacation, and many employers do not.


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