Boothby

Paid vacation provided by an employment agreement vests as the employee labors. (Suastez v. Plastic Dress-Up Co. (1982) 31 Cal.3d 774, 779 [ 183 Cal.Rptr. 846 , 647 P.2d 122 , 33 A.L.R.4th 254 ].) Because vested vacation is nonforfeitable, an employer must compensate the employee for all vested vacation time remaining unused at termination. (Id. at p. 781; Lab. Code, § 227.3; further statutory references are to the Labor Code.) However, an employment agreement may provide that the employee does not earn additional paid vacation if a specified amount of vested vacation remains unused. Such a provision does not attempt forfeiture of vested vacation and is therefore permissible.

Here, an employee sued his former employer for, among other things, vacation allegedly earned over several years but unused, for which his employer did not pay him at termination. The trial court ruled the employee could not accumulate vacation from year to year absent an agreement permitting accumulation. However, accumulation of vacation time does not depend on an agreement which expressly permits it. Rather, unused vacation accumulates unless the employment agreement legally prevents it.…