Legal Question in Employment Law in California

Whatever the company polices say.

They can range from 'use it or lose it', to paid on some triggering date if not used. Decide and implement it, then follow it uniformly.

Mr. Nelson is ABSOLUTELY WRONG. Vacation pay is owed when earned. It is ABSOLUTELY ILLEGAL to have a use it or lose it policy! In all honesty and no offense intended, the fact that you have to ask this question indicates that you are so out of touch with California Employment Law that you really need to talk to an attorney in person about your payroll and personnel policies right away, rather than asking questions on the internet that show you don't even really understand enough to know what to ask.