Legal Question in Employment Law in California

It is completely legal. An employer has the right to change terms of employment at any time as long as the changes are prospective. So they can't take away vacation, but they can change the policy on accruing vacation going forward in any way at any time, just as they can raise or lower your salary, or change or cancel benefits. Unused vacation is a real problem for employers. Among other issues is the fact that you earned it at one rate, but if you save it up and get raises they have to pay it to you at the higher rate, and they have to pay it to you in cash when your employment with them ends. It is bad for business to have to carry that kind of constantly growing debt on their books. Another issue is that studies have proved that employees who do not take vacation perform more poorly on the job than those who do. Employees need to "recharge their batteries," with time off. So by never taking your vacation you are not doing your employer any favors, and they have a right to put a stop to you making the problem worse for them.