We are a California employer and in our Employee Handbook have a "years of service award" policy for employee who have been here for 10, 15 & 20 years. Upon their 10 year anniversary they receive an additional 2 days of pay (16 hours) . We call the award "floating Holidays" and they are allowed to use the hours anytime during the calendar year. At the end of the year if they have not used the "floating holiday" they lose the benefit for that year. Then in Januaary they are awarded the current years' service hours. Our policy states that upon termination all accrued vacation is paid BUT floating holidays are NOT paid. I wanted to be sure that this is a legal pay practice. Thank you,
Laura,
Payroll Administrator

Not sure about California, but I work for a major employer in the North East and we have the very same clause. Unused vacation that is accrued to that date is paid (none is carried over year to year either), but unused sick, personal or floating holidays are not paid.