Questions: 1) In California are the actions of this company permissible/legal?
Yes and no. Vacation time accrued vests as earned and while the vacation time itself can be taken away, the value as pay cannot.
Wages include accrued vacation pay. Vacation pay is not a gratuity or a gift, but is, in effect, additional wages for services performed. Suastez v. Plastic Dress–Up Co. (1982) 31 C3d 774, 779, 183 CR 846, 849. However, an employer may adopt a policy specifying the amount of vacation pay an employee is entitled to be paid as wages, depending on length of service. Suastez v. Plastic Dress–Up Co., supra, 31 C3d at 783, 183 CR at 851.
Your facts suggest that the employer is trying to "thread the needle" by limiting the amount of past vacation hours that must be paid, using a system that prevents employees from taking any vacation, while simultaneously refusing to pay the vacation time as compensation. This may be actionable, via a complaint to the Division of Labor Standards Enforcement
-- or a private lawsuit
.2) would the reasons for my leave disqualify me from receiving state unemployment in California?
A: Title 22 CCR 1256-23(c) permits an employee to show "good cause" to quit and receive UI benefits where new job conditions violate the "agreement of hire." Similarly, a job change that clearly increases the employee's workload can be used as good cause.
The problem with this right, is that the employee must generally quit immediately upon notice of the change in job description -- otherwise, continued employment operates as assent to the modifided job conditions.
Were the employer to be found to have wrongfully taken your vacation time, that along with your quiting would probably suffice for a showing of "good cause." Who wouldn't quit, knowing that the employer was effectively stealing money from them?
But, as it stands right now, you have a coin toss as to whether or not you would be found eligible for UI benefits -- especially if you have been working under the new deal for more than one workweek.
Hope this helps.
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