Employers are not required by federal or state law to provide vacation benefits to their employees. The key is to ensure that the employer’s policy clearly states the employer’s requirements for vacations and vacation pay and is communicated to all employees.
The employer also may place reasonable limitations on when employees can take vacation, as, for instance, by requiring employees to take one week of vacation during the annual plant shutdown or the two-month slow period.
Employers may prohibit employees from accumulating vacation over time rather than taking it. Although an employer should never require an employee to forfeit earned vacation, the employer may prevent the accumulation of vacation from year to year by providing that no further vacation will be earned until previously earned time has been taken.
Another means of controlling the amount of accrued vacation pay that the employer ultimately must pay is for the employer – in its employee handbook – to designate the relevant accrual period and state that vacation will not be earned...
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