What are the legal requirements when moving from vacation/sick time to PTO?

If you have a written contract for your sick, etc. time, its terms must be followed; if they are not, you can sue to enforce those terms if necessary (a lawsuit for "breach of contract"). But without a contract, an employer can change sick, vacation, etc. policy, which includes changing the rules on carrying it over (such as on how long it may be carried, or how much may be carried). The employer does need to provide some reasonable opportunity to use time the time, subject, however, to reasonable rules about using it--e.g. making sure sick time is only used when actually verifiably sick, and not as de facto additional vacation or personal days. If they are transitioning over the course of approximately a year or more, as you indicate, what they are doing is legal. Bear in mind that the purpose of vacation time is to take vacation each year, so that employees do not burn out; the purpose of sick time is to use it for legitimate illness; despite the fact that some jobs (like certain teaching and fire/police jobs) let you "bank" it indefinitely and use as deferred compensation to be paid out when your employment ends--as per union or collective bargaining agreements), that's not actually the purpose of those days and the courts have no problems with policies (or policy changes) that require employees to actually use the days as intended.