Question: Aside from labor costs, do you see any other issues with employees consistently using their vacation time to complete their 40/weekly pay instead of using it for rest and relaxation? 

Answer: The labor code does not require vacation/PTO policies, so an employer’s obligations to its employees generally arises out of contractual provisions. Those provisions (which are created by the employer) are found in employee handbooks, vacation/PTO policies, informal policies and employment contracts. Employers are free to limit the use of vacation to minimum increments (there are some additional restriction for exempt employees), and any other limitations they see fit. Vacation has traditionally been designed for "rest and relaxation" but modern PTO policies are more regularly used for all absences including vacation, illness, personal obligations, etc. As an employer, you should determine (1) what is the purpose of paid time off (vacation, PTO, sick, etc), and (2) what restrictions will the employer place on the use of that time off. Once those decisions are made, the policy should be clearly communicated, in writing. As a practical matter, the use of accrued paid time off to fulfill a minimum workweek often leaves the employee without available, accrued time off when they need it most (sickness, family issues, etc).

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