Is there any type of law in existance that says that employers cannot create a "use it or loose it" vacation policy? I know I remember reading somewhere that it is illegal for employers to do that but now am unable to find it when I need it. Any help would be appreciated.

The answer depends on state law. For example, earned vacation pay CANNOT be forfeited under California law. (aka the Suastez case) I do not know the result in the other 49 states.

Thank you for reply. Do you happen to know which state law it is? We are in California. I need to be able to give my boss specifics because he is convinced that he can do that as another company we do a lot of business with also practices the use it or loose it policy.

No, I do not know it off the top of my head and I do not have access to the California statutes at the moment. A few suggestions - 1. Call your labor lawyer, 2. Call the California labor commission, 3. Try to do a lexis search.

Good luck!

I think there is something about earned vacation being considered a form of compensation. Once earned, it can't be taken away. I seem to recall a federal case some years ago. You might try checking Wage & Hour laws through the Department of Labor.