I am not a lawyer nor do I play one on TV, but I do hire, manage and fire people in California. As stated above, paid vacation is a benefit not a right. However, once there is a written agreement between parties that vacation is granted, it accrues and becomes an asset of the employee per the agreed-upon formula. For instance, if the employee terminates for just about any reason, unused but accrued vacation has to be paid out. Reneging on that is just asking for a labor board complaint or lawsuit that the employer very likely will lose, given the pro-worker politics in this state. Your best case scenario is a big pile of attorney bills and a settlement. Not worth the risk.
That being said, employers have a lot of leeway in dictating when vacation can and cannot be used by employees, but again that 'should' be clearly stated in a policy or employee handbook. For instance we ask for reasonable advance notice and require supervisor and top-management approval, since we are a small company where absence can really impact things negatively.
Also, California is an 'at-will' employment state, as mentioned above, meaning that the terms or continuation of employment can be changed at any time without notice (unless there is a contract in force to the contrary.)
However, if the employee has earned/accrued benefits then those still belong to him/her even if they stop accruing more at some point.
Here are links to the actual codes (admittedly I hire real lawyers to deal with this stuff as this is a socialist state that heavily favors workers over employers, and we have a litigious culture to boot):
California Labor Code
Overtime exemptions