I currently work for a small employer in California. We only get 2 paid holidays - Thanksgiving and Christmas, as we service the food industry and it is always operating around holidays. Recently my boss decided that we would be closed on the 4th of July this year. The hourly employees were told that if we wanted to get paid, we would have to use paid time off, while the salary employees would be paid without using any of their accrued pto. Are they allowed to suddenly decide to pay one group and not the other when our paid holidays are specified in our employee manual (everyone gets the same manual), or do they have to treat everyone the same? I used all of my pto not knowing that we were suddenly going to be closed on a day that we would normally be open.

Yes, they can, as long as the results do not discriminate against a persorn or group of persons based on their age, race, religion, etc.