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The employer has the right to schedule vacations. Labor Code Section 227.3 provides, in brief, that vacation is vested and requires unused vacation to be cashed out at termination. Further, there can be no forfeiture, such as a “use it or lose it” policy. The employer does have the right to manage the vacation program by setting vacation dates.
One suggestion is to send out requests around the first of the year, giving the employees two vacation date choices and make it clear that in any conflict, seniority or any nondiscriminatory method will be used to determine who gets their preference. Also make it clear that company needs will prevail.
If an employee fails to respond, the company has the right to assign vacation dates. Managing vacation programs in this manner will help to alleviate end-of-the-year problems and high vacation balances.
The California Labor Commissioner takes the position that exempt employees should be given at least 90 days' notice of mandatory vacation. Exempt employees can voluntarily take vacation for shorter periods without notice with employer approval, however.
Employees may be scheduled for vacation, but events occur such as pregnancy disability leave and Family and Medical Leave Act and California Family Rights Act leaves. Depending on the timing, this could affect vacation schedules, but employers must comply with these leaves of absence.
Read more about Vacation in the HR Library.