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Jul12

Vacation Pay

Our company vacation time runs from 1/1 to 12/31. When an employee anniversary date, which entitles him to additional vacation time, is in the middle of the year should I & how do I prorate it?
Thanks!
Tracy

This is a matter of company policy rather than employment law, but most employers would not prorate the vacation.

If we understand correctly, employees are awarded vacation on January 1 of each year, based on how many years they have worked for the company. Suppose your company awards 2 weeks of vacation to all employees, and 3 weeks to employees who have been with the company for 5 years or more. Ted joined the company in June 2005. On January 1, 2010 Ted had been with the company 4.5 years and he was awarded 2 weeks of vacation. On January 1, 2011 Ted will have been with the company 5.5 years and he will be awarded 3 weeks of vacation. However, Ted is not due any additional vacation on his anniversary date.

Normally vacation time is either awarded on January 1 OR on the anniversary date, but not both.

 

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