Recently, some employers in California have turned to flexible work arrangements and unlimited paid vacation policies as a tool for recruiting and retaining employees. Before April 2020, however, no California court had addressed whether a nonaccrual, unlimited paid time-off policy was subject to Labor Code Section 227.3, thereby requiring an employer to pay out vested vacation time at the time of an employee’s discharge. Although the California Court of Appeal somewhat sidestepped the issue, its recent decision in McPherson v. EF Intercultural Foundation, Inc., No. B290868 (April 1, 2020), highlighted the potential exposure California employers may face when offering “unlimited” vacation policies that are not clearly communicated to employees. This decision is of particular interest to employers with “unlimited” vacation policies that may be facing substantial vacation payouts in light of terminations, layoffs, and furloughs caused by the COVID-19 pandemic.