It may vary by state but it's always been paid out to me as far as I can remember based on three different states. (This type of thing does tend to be state-based law and does seem to be [1].) "Use it or lose it" also is prohibited in a few states although (I'm assuming) all of the others do allow accumulation caps.

[1] http://ask.legalsolutions.thomsonreuters.info/cc-nto-vacatio....