My employer currently has a vacation accrual policy when you can accrue up to a maximum of 240 hours. Accruals stop at this limit until vacation time is taken. The company is now wanting to reduce the limit to a maximum of 200 hours effective June 30, 2008 The questions are: if an employee has 220 hours on June 30, can the employer reduce the employee's accrual by 20 hours and inform the employee that no additional accruals can occur until time is taken? Or can the employer leave the balance as is and no additional accruals are given until balance is under 200? Or does the employer need to pay out the 20 hours?

I know that CO law says if you have a stated policy and the employee terms that you need to pay out all accrued vacation pay but I can not find anything on changing of accrual maximums. I have also checked the CO DOL and can not find any references.

Any help here would be greatly appreciated!

In a few states that regulate vacation, lowering the cap requires that the employer allow the employee a certain amount of time to take vacation so that he doesn't lose it (California immediately comes to mind). However, I honestly don't know if Colorado regulates vacation to that extent. I know MLane is more knowledgeable about Colorado law than I. Hopefully, he will be by soon.

On the other hand, the employer has given the employees 3 months' notice of the change, and 40 hours is only one work week. I don't think that would be unreasonable.

Or, just call the state DOL and ask them.