This might sound contradictory at first. Why would you have to pay out vacation if you don’t even have to offer vacation to begin with?
Well, if you choose to offer vacation, you have to follow some rules. You don’t actually have to offer vacation in California at all if you don’t want to (although, it is a perk that employees find desirable so maybe you should!) but if you do decide to implement some vacation benefits, you’ve got to stick to it till the end.