This is the exact reason why these policies claim there is no specific time. No allocated days legally means zero days. Companies use this "flexible vacation" policy specifically so they don't have to comply with pay out in jurisdictions such as California. It's a big scam, which is why the real question to ask and answer is how many days on average are taken, and if they include "half days" as "vacation time" in the response, they are being intentionally highly misleading. Working half days is NOT vacation. It's work.
As stated elsewhere, I doubt the payout liability is that large, considering that most employees only get to keep vacation days for a little over a year before they expire.
I disagree with your use of the word scam to describe an untracked vacation policy. An employee at any one point in time will probably have no more than 6 weeks of accrued, unexpired vacation time (assuming they get 3 weeks per year and haven't taken a vacation in 2 years and their vacation rolls over a little bit). This is only 3 pay periods, or just over 10% of their actual pay (6/52 weeks).
I would agree that in general vacation policies are a bit of a scam in that you are promised x days as part of your compensation package, but then are told when they can or can't be used, and resist if you try to use them all at once, and expire them if you hold on to them for too long... Come to think of it, defined vacation days are a bit like airline miles.
Yes the law does mandate vacation payout in some areas, but the actual vacation days also expire, meaning that your employer won't have to pay you for 20 years of accrued vacation. This is why I don't like vacation days as an accrued benefit.
Interesting. I worked at a large bank a while back and they had a use it or lose it policy. Either the law recently changed or they were out of compliance.
I don't think it is a recent change. The reason I am familiar with it is my current employer tried to pull this one--I showed them the law and they backed down thankfully.
Also, don't give up on old wages. An employee at a former employer filed a class action lawsuit (somehow I got attached), his hardwork resulted in an $8k check that found its way to my doorstep. ;)
Depends on the state. In California, vacation time is earned as it is accrued and thus must be paid out on termination (voluntary or not).