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Vacation Calculation

Our hours are 9 to 5 with a 1/2 hour lunch which is 7 1/2 hours. Sometimes we may need to work till 5:15 or go over our scheduled hours a little here or there. Do we pay vacation hours at the 71/2 hours a day or are they paid at 8 hours or how do you figure that out?

Since fringe benefits such as paid vacation are not federally mandated, there is no federal legislation addressing the issue of vacation calculations. Some states have adopted legislation requiring paid time off and/or establishing guidelines regarding the administration of paid time off. Also, some states classify vacation time as earned wages subjecting accruals to wage payment laws. Thus, it’s important to know of applicable state regulations.

Most large companies have a Human Resource Information System (HRIS) or similar program that calculates vacation accruals. Smaller companies often rely on manually entered data and use Excel to maintain the calculations.

Absent state regulations or employment contracts stating otherwise, employers are free to adopt calculation procedures at their discretion. The most common method is calculating the time based on hours worked and establishing rounding guidelines. A common rounding guideline is rounding down for 01-29 minutes and rounding up for 30-59 minutes. Again, employers are free to establish their own calculation guidelines.

When adopting vacation calculation procedures it’s important to clearly document the guidelines established and use them consistently and uniformly.


This entry was posted on Monday, August 4th, 2014 at 11:29 am and is filed under
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