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Jan12

Compensation/Vacation Accrual

I have an employee that is allotted 120hrs of vacation time. The company downsized and she went from FT to PT as of 10/15/15. As of this date, she used 68hrs and owned 3.5days. From 10/15/15 until 12/31/15; what would be her owned vacation that she would be entitled to?

Calculate the employee’s earned vacation time for the period 10/15-12/31/15.
The employee earns 2.31 hours of vacation each week (120 hours of vacation time per year divided by 52 weeks per year = 2.31 hours of vacation earned per week).

So, an employee’s who vacation accrual rate hadn’t changed would’ve earned 25.41 hours of vacation from 10/15/15 to 12/31/15 (2.31 hours of vacation earned per week x 11 weeks = 25.41 hours of vacation earned).

Since the employee was changed to part time, it’s likely her accrual rate changed as well. This obviously would affect the calculation. The new accrual rate can be used in the calculation above to determine the number of vacation hours earned from 10/15 to 12/31/15.

As of 10/15/15, as you state, she accrued but had not used 28 hours or 3.5 days (assuming 8 hours worked per day) of vacation time.

Thus, the employee should have 53.41 hours of accrued vacation time (28 hours of vacation remaining + 25.41 hours of vacation earned = 53.41 hours of vacation). Again, this total number will differ if the employee has a new accrual rate as a part timer.

This entry was posted on Tuesday, January 12th, 2016 at 1:28 pm and is filed under
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2 Responses to “Compensation/Vacation Accrual”

  1. Kimberly Mutz Says:

    I have an employee who’s FT status rolled on 11/09/2015. As of 5pm on 01/14/2016 she was placed at PT. During her FT status she was granted 15 vacation day and 5 personal days. I would like to prorate these. I come up with 3.53 payable days. Is this correct.?

  2. hrlady Says:

    Hi Kimberly, Assuming the employee works 8 hour days, her annual PTO allotment is 160 hours. Thus, the employee earns 3.08 hours of PTO each week (160 hours of PTO per year divided by 52 weeks per year = 3.08 hours of PTO earned per week). From 11/9/15 to 1/14/16 is 10 weeks, rounded up. Thus, she would’ve earned 30.0 hours of PTO or 3.85 days. Our numbers may be slightly off due to rounding, which is fine. Just remember to establish rounding standards and apply them consistently. HTH!

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