I would like to know what the law is about taking peoples vacation for absenses.The company has had a policy that anything over one and a half unexcused days in 3 months is considered excessive.
What has happened is because of a few employees who miss a lot of time and do not care if they loose a days pay for their day off, the company has decided that all employees will be docked vacation time for any time off.
Is this legal ?

If it is stated company policy and not discriminatory, then it is totally legal. Companies do not have to pay for absences period. Nor are they legally required to give sick or vacation time. So it is legal for them to require that time off be taken as vacation time.

I do not believe that there is a law about how companies handle personal and vacation time. Give us a little more info and we might be able to help further:

Is this a policy that the company has put into an employment agreement or handbook?

Is this a new policy? (And related: How long have you worked there? Was this policy in place when you started there?)