Is it legal to fire someone without notice and withhold their vacation pay?
I was terminated in 01/10 for something that happened in 07/09. I was not paid out my vacation as I was told that 2 weeks vacation is awarded at the beginning of the year. I received no written or verbal warnings.
First of all, your firing was probably legal, whether or not you received warnings. The reason is that most employment relationships are what is known as "at will". This means that you can work for an employer, or not, your choice. In turn, the employer can hire or fire someone for any reason or no reason whatsoever (unless there was an employment/union agreement or company policy statement to the contrary, or discrimination was a factor.
As for your vacation pay, the news is better. While there is no law in CA requiring that employees be provided with paid vacation time (ie vacation pay is voluntary), if it is provided as an employee benefit, then earned but unused pay cannot be forfeited and must be paid upon termination of employment. When an employer does provide for paid vacation time, this time constitutes earned wages (Labor Code § 227.3).
Additionally, vacation time is earned proportionately as labor is performed (ie it is earned daily). Upon termination, an employee is entitled to a "pro rata share" of their vested vacation pay since vacation pay is considered as compensation of past services. Therefore, for example, if a company states that an employee earns 1 week of vacation for every year worked, then after 6 months of service an employee would have earned 1/2 week of vacation. This also means that if an employee is terminated mid-year, they are entitled to their accrued vacation pay up until the time of termination.
Note: An employer can have a policy that prevents vacation pay from vesting for a certain period of time. For example, there may be 60-day probationary period during which vacation time does not accrue.