Legal in California: You earn 2 vacation days per month, to a max of 24. Hired in January, never use PTO, by December you have 24 days banked. In January you fail to earn PTO because you hit the cap. Total balance at end of January: 24 days banked.
Illegal in California: You earn 2 vacation days per month, and they are "use it or lose it." Hired in January, by December you have 24 days banked and never use them. The next January, your existing PTO balance is set to 0 and you are not compensated for the unused days. Balance at end of January: 2 days banked.
The legal distinction is that your employer can decide not to give you PTO for any arbitrary reason (there is no legal requirement to give any at all), but they cannot take back PTO that has already been paid out.
I'd still call this "use it or lose it", just a less harsh version than a yearly reset to zero.
I've never heard of anywhere doing this sort of yearly zero-reset anyway. Wouldn't this make it literally impossible to use the vacation earned during the last pay period of the year?
Typically the yearly reset is for awarded (as opposed to earned) PTO. e.g. On Jan 1 you reset, but back to 15 days, and you have the rest of the year to use it. I'm guessing this is also legal in California because PTO is not earned in this model.
Speaking from experience. The PTO is given up-front. (Say by quarter.) There may be a grace period into the next calendar before the previous year's PTO is zeroed out. And you can potentially, by policy, go negative.
It's not uncommon for companies to have some variant of this.
I agree that it's not all that different from accrual caps in practice but does need a little more management to avoid losing time.
ADDED: Accrual caps are also typically more along the lines of vacation earned over 18-24 months in my experience.
Illegal in California: You earn 2 vacation days per month, and they are "use it or lose it." Hired in January, by December you have 24 days banked and never use them. The next January, your existing PTO balance is set to 0 and you are not compensated for the unused days. Balance at end of January: 2 days banked.
The legal distinction is that your employer can decide not to give you PTO for any arbitrary reason (there is no legal requirement to give any at all), but they cannot take back PTO that has already been paid out.