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HOW TO CALCULATE VACATION PAY- OUTSIDE SALES SALARY TERMINATION\? Arizona

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  • HOW TO CALCULATE VACATION PAY- OUTSIDE SALES SALARY TERMINATION\? Arizona

    Please help me!?! I need an answer to this as soon as possible.
    I was laidoff Fri 2/14/14-outside sales, exempt salary 2458.33/semi-monthly + 2500/mo bonus. Paydates 15th, last day of mo. I work in AZ, Employer is in TN. I received full salary on my last day, 2/14 (ER isn't open on wknds, & I don't work wknds) I received 1/2 of Feb bonus & 10 days vacation pay on 2/28
    Employer's vacation calculation:
    2458.33 divided by 15 days in pay period = 163.89/day x 10 vacation days = 1638.90 - 163.89 = 1475.01
    They say sales pays based on # of days in pay period NOT work days. My vacation pay is: 1638.90, which breaks down: 163.89 x 360days (24 periods x 15days/period) =59k/yr
    They deducted a day because I was paid thru the 15th & my last day was 2/14. They said I was overpaid for the 15th & they had to recoup the overage. Is this right?
    I feel this is wrong because:
    Shouldnt they use work days NOT days in pay period?
    Not every payperiod has 15days. 6 periods have 16days & 1 has 13 days. There's 365 days in a yr, not 360.
    Policy says FT salary ee works a scheduled 40hr workweek, 86.67hrs per pay period. I don't work wknds!
    Law says ER may prorate salary for time actually worked in terminal week; I worked all 5days in term week, so no deductions should be made.
    They didn't deduct a day from my bonus, I receive the full amount of half of my bonus.
    My calculation:
    59k salary divided by 260days = 226.92 x 10days = 2269.23 or
    59k divided by 52wks = 1134.62 divided by 5days = 226.92 x 10 = 2269.23
    Who's right? Can they deduct for the 15th, even though I worked all of the work days in the terminal week? Please include reference for laws to validate my argument when I respond to employer &/or file a wage claim. Thanks.
    Last edited by Boom1997; 03-19-2014, 03:42 PM.

  • #2
    At the present time Arizona has no laws addressing the payout of vacation time at termination. Therefore any method the employer uses to calculate the time will be considered legal so long as the employer adheres to his own policy.
    The above answer, whatever it is, assumes that no legally binding and enforceable contract or CBA says otherwise. If it does, then the terms of the contract or CBA apply.

    Comment


    • #3
      vacation pay is going to be dependent on the employer's policy. They can generally calculate vacation pay however they want to. Unless you have a written contract or CBA, they can set and change the policy as they wish. There are no requirements that they pay you vacation at termination at all unless that is their normal policy in Arizona.

      If they paid you through the 15th and you didn't work the 15th, then yes they could charge you a day of vacation since you didn't work that day.

      Comment


      • #4
        Let me try again:

        Originally posted by hr for me View Post
        vacation pay is going to be dependent on the employer's policy. They can generally calculate vacation pay however they want to. Unless you have a written contract or CBA, they can set and change the policy as they wish. There are no requirements that they pay you vacation at termination at all unless that is their normal policy in Arizona.

        If they paid you through the 15th and you didn't work the 15th, then yes they could charge you a day of vacation since you didn't work that day.
        I don't think I asked my question properly. I'm not the best with email.
        Their policy is to pay vacation. I was due 10 days of vacation pay. They have no policy has to how they calculate vacation pay. The policy says vacation can be taken in 2hr increments, and all unused vacation days are paid out to employee's upon termination. I stated in my post that they paid me for 10 days of vacation. I'm questioning how they calculated it. I don't work on Saturday or Sundays. Each pay period is scheduled for 86.67hrs per pay period. How can they calculate my daily rate by including weekends, when I don't work weekends, it's not included in the 86.67 hrs per pay period. I've seen posts on here with this similar questions, where the employer calculates vacation pay using total # of days in pay period, or 365 days in the year, as opposed to total # of working days in a pay period, and the expert (or whoever answers these threads) said that they should use the total # of working days NOT the total # of days in a pay period. This was for states that didn't require employers to pay vacation. They used the calculation I used in my post:
        annual salary divided by 52 weeks in a yr = weekly pay divided by 5 days in a work week = day rate x # of vacation days = vacation pay or
        annual salary divided by 260 working days in a yr = day rate x # of vacation days = vacation pay.
        I want to know where this calculation came from? Is there a law or regulation somewhere that references this calculation?
        Alss, how can they deduct me for a day I never work? Our workweek is based on a 40hr workweek, Monday thru Friday. I don't work weekends. 2/14/14 is the last working day in that pay period. I was paid on the 14th, but because it's salary its a predetermined rate for the 1st thru the 15th paid on the 15th, 16th thru the last day of the month, paid on the last day of the month. If paydate falls on a weekend or holiday, we are paid on the workday prior to the holiday or weekend. Also, I stated in my post that the laws says an employer may deduct a salary in the terminal week by prorating part of the full salary for the time actually worked. I interpret that saying I'm paid for the days I actually worked in the terminal week. If there are 5 working days in the terminal week, and I work those 5 working days in the terminal week, how can they deduct for a day I wasn't scheduled to work? (If it wasn't my terminal week I still wouldn't work on that Saturday) The last working day was 2/14 for that pay period, which was also my last day.
        I don't mean to sound confusing or throw so many details at you, I just want to make sure you have all the correct information. The method my employer used to calculate my vacation pay doesn't seem fair. If I used my vacation while I was working, I would take a paycut. I can't use vacation days on weekends because I already have them off. So, I would like to know what is the proper way to calculate vacation pay if the employer's policy is to pay unused vacation days at termination & have no policy on how to calculate it (at least none that was explained to the employee's) & can they deduct for a nonscheduled day (a day I don't typically work), if I worked all of the working days in the terminal week? In this case: there were 5 working days in the terminal week, I worked all 5 days in the terminal week. Thanks.

        Comment


        • #5
          Perhaps we didn't explain properly.

          Neither Federal nor Arizona law cares whether you get any vacation paid out at all. There is no set formula that your employer is required to use. There are states that do care, but Arizona does not and neither do the Feds. An Arizona employer may use any formula they choose. That formula could consist of any unused vacation being lost outright and neither Arizona law nor Federal law would care.
          The above answer, whatever it is, assumes that no legally binding and enforceable contract or CBA says otherwise. If it does, then the terms of the contract or CBA apply.

          Comment


          • #6
            Question for DAW RE: vacation pay outside sales salary ee in AZ. Please help!

            Originally posted by DAW View Post
            Your state is not my state, so parts of this will be a soft answer.
            - Termination pay for hours worked is generally due quickly under stattuory law. Your state's DOL will likely take an interest in such payments paid late. HOWEVER, this means filing a wage claim and waiting months/years to resolve. It is always eaiser to just call up the employer and ask what the story is. You can always file a legal action.
            - Vacation is a function of state law. Most states do not care if you EVER get paid vacation. And those states that do care do not necessarily consider vacation buyouts upon termination to be suejct to quick payouts or related penalties if paid late. You are not in my state and I do not know what (if anything) AZ thinks about terminatino related vacation payouts. But do not assume that these fall under the same rules as termination hours worked payouts
            I realize this is not my thread, but I was really hoping you DAW can help me with my question. You're not in my state, but you really know what your talking about & you have a great personality. I have read through many of your posts & I'm impressed. I have a question that I can't get a direct answer to. My question digs a little deeper than the typical how do you calculate vacation pay. I was deducted for a day I don't typically work. I can't use vacation days on weekends because I already have them off. Keep this in mind when reading the following post. I apologize for the length, i just want to make sure you have all of the details.
            I was laidoff Fri 2/14/14-outside sales, exempt salary 2458.33/semi-monthly + 2500/mo bonus. Paydates 15th, last day of mo. I work in AZ, Employer is in TN. I received full salary on my last day, 2/14 (ER isn't open on wknds, & I don't work wknds) I received 1/2 of Feb bonus & 10 days vacation pay on 2/28. It's company policy to pay unused vacation days at termination. (Termination can be taken in 2hr increments). I feel they miscalculated my vacation pay.
            My employer's vacation calculation:
            2458.33 divided by 15 days in pay period = 163.89/day x 10 vacation days = 1638.90 - 163.89 = 1475.01
            They say sales pays based on # of days in pay period NOT work days. They said my vacation pay is: 1638.90, which breaks down: 163.89 x 360days (24 periods x 15days/period) =59k/yr
            They deducted a day because I was paid thru the 15th & my last day was 2/14. They said I was overpaid for the 15th & they had to recoup the overage. Is this right? I am not ever scheduled to work on Saturday or Sunday. If I wasn't terminated during this work week, I still wouldn't work that Saturday. So, how can they deduct for a day I don't typically work?
            I feel this is wrong because:
            Shouldnt they use work days NOT days in pay period? My policy says FT salary ee works a scheduled 40hr workweek. There are 86.67hrs in each pay period, this is stated on each of my pay checks. I don't work wknds.
            They calculate my annual salary using 15days for each pay period, but Not every pay period has 15days. 6 periods have 16days & 1 has 13 days. Also, there's 365 days in a yr, not 360.
            The law says ER's may prorate salary for time actually worked in terminal week. There are 5 workdays in my terminal week & I worked all 5days in the term week, so no deductions should be made, right?
            They didn't deduct a day from my bonus, I received the full amount of half of my bonus.
            I feel my vacation should be calculated by:
            Taking 59k salary divided by 260days = 226.92 x 10days = 2269.23 or
            59k divided by 52wks = 1134.62 divided by 5days = 226.92 x 10 = 2269.23
            I saw both of these methods provided by the experts on this blog for similar questions where the ER calculates vacation using total # of days in pay period rather than # of working days in pay period.
            Who's right? Can they deduct for the 15th, even though I worked all of the work days in the terminal week? Please include reference for laws to validate my argument when I respond to employer &/or file a wage claim. I really appreciate you taking the time to read this. I hope you can help me out. Thanks.

            Comment


            • #7
              Please include reference for laws to validate my argument when I respond to employer &/or file a wage claim.
              There is no law that specifies how to compute vacation time payouts in Arizona. There may be industry best practices that have been cited in blogs or posts here, but they do not rise to the level of an enforceable law. You are certainly free to file a wage claim and see what happens.
              I am not able to respond to private messages. Thanks!

              Comment


              • #8
                They don't have to pay you any vacation pay at all. It is perfectly legal for them to pay you a different amount of vacation pay than what you think you should get. How they calculate it is completely irrelevant in the eyes of the law. How you calculate it is completely irrelevant in the eyes of the law. You have no legal recourse whatsoever in getting them to change their method of calculation or to get more vacation pay than what they have chosen to give you.

                Hope this is finally clear.

                Comment


                • #9
                  If they are paying you any unused vacation time at all, you are being paid more than the law requires them to.
                  The above answer, whatever it is, assumes that no legally binding and enforceable contract or CBA says otherwise. If it does, then the terms of the contract or CBA apply.

                  Comment


                  • #10
                    Further, pro-rating the salary for an exempt person based on the total number of days in the payperiod is legal. You are always welcome to file a wage claim as it is free to do so. Ultimately, it is up to the DOL anyway.
                    I post with the full knowledge and support of my employer, though the opinions rendered are my own and not necessarily representative of their position. In other words, I'm a free agent.

                    Comment


                    • #11
                      Agreed with all the other answers, which is why I did not respond before.
                      - The feds do not care if you EVER are paid vacation. Not their issue. No federal rules at all on the subject. FLSA looks at pay based on hours worked only.
                      - AZ is not my state, but even CA which has the toughest vacation rules in the country would not care about this issue for the reasons other people have stated.
                      - Now so far we have been talking about Statutory/Regulatory labor law, meaning actual laws with actual supporting regulations. No law here because no one ever passed the laws and regulations addressing this subject. What is left is something called Common Law. Basically the "your dog p***ed on my lawn" type of law. You can file a small claims court action. Might work. Might not work. Very Wheel of Fortune type of law.
                      - If I had written your company's policy, I would have put the calculatopn method in the policy, not because the "law" requires it (the law does not require it) but failure to do so leaves the door open for a small claims court judge to play Wheel of Fortuine.

                      I understand that this is not the answer you are looking for, but all of the other answers are indeed correct.
                      "Reality is that which, when you stop believing in it, doesn't go away".
                      Philip K. **** (1928-1982)

                      Comment


                      • #12
                        Thank You DAW!

                        Originally posted by DAW View Post
                        Agreed with all the other answers, which is why I did not respond before.
                        - The feds do not care if you EVER are paid vacation. Not their issue. No federal rules at all on the subject. FLSA looks at pay based on hours worked only.
                        - AZ is not my state, but even CA which has the toughest vacation rules in the country would not care about this issue for the reasons other people have stated.
                        - Now so far we have been talking about Statutory/Regulatory labor law, meaning actual laws with actual supporting regulations. No law here because no one ever passed the laws and regulations addressing this subject. What is left is something called Common Law. Basically the "your dog p***ed on my lawn" type of law. You can file a small claims court action. Might work. Might not work. Very Wheel of Fortune type of law.
                        - If I had written your company's policy, I would have put the calculatopn method in the policy, not because the "law" requires it (the law does not require it) but failure to do so leaves the door open for a small claims court judge to play Wheel of Fortuine.

                        I understand that this is not the answer you are looking for, but all of the other answers are indeed correct.
                        Thank you DAW for your nice and elaborate answer. I got a chuckle from your analogy. I appreciate you taking the time to read my question, and thank you for the additional information. I understand there is no law enforcing vacation pay, but the law does say that they have to abide by their policy, and I feel there's some concern in that area. By any chance, do you know why they would use 360 days in a year as opposed to 365 days in a year? If they're going to calculate using all of the days in the pay period/year, shouldn't they use all of the days in the year? My other question is regarding them deducting a day for the 15th, a Saturday. If I'm not scheduled to work on that day, I don't work on weekends, can they still make that deduction? The law says deductions can be made in the terminal week by prorating part of the full salary for the time actually worked. If I work all 5 work days in the terminal week, doesn't that mean I should get paid for all 5 days?

                        Thank you again for your help. This wouldn't be an issue if my former employer had paid us on a commission structure like they promised, rather than a capped bonus. Don't get me wrong, I'm grateful for the bonus and I'm typically not a "complainer", but people, like myself, who work in my industry, are highly educated, work really hard and are compensated substantially well for their efforts. I'm happy to move on to a new opportunity. Great people; but they didn't follow through with many of the commitments made to our division. I'm speaking to a lawyer about this to see if it's worth pursuing a wage claim. Thank you again for taking the time to read my post and give your expertise on my situation. This site is a valuable resource. You all are wonderful people for helping us common, non-payroll folk.

                        Comment


                        • #13
                          Thank you CBG

                          Originally posted by cbg View Post
                          Perhaps we didn't explain properly.

                          Neither Federal nor Arizona law cares whether you get any vacation paid out at all. There is no set formula that your employer is required to use. There are states that do care, but Arizona does not and neither do the Feds. An Arizona employer may use any formula they choose. That formula could consist of any unused vacation being lost outright and neither Arizona law nor Federal law would care.
                          Thank you cbg. I hope I didn't sound pig-headed. I like to understand how things are processed, and I can't seem to grasp how this calculation is justified. But, the Law is what the Law says, and they just don't give a Hoot in good ol AZ. AZ allows people to do what they want with guns, so it makes sense that they allow employers to do what they want with their money. I guess it's the price we pay for amazing weather. Quick question; I live and worked in Arizona, but I also worked in New Mexico, Nevada, and El Paso, TX. Does that make a difference? Most of my work is done in AZ. Also, my offer letter states, that by accepting employment with my former employer, I agree for all purposes, with the exception of State and Federal taxation, I am deemed an employee of Tennessee, and subject to all Federal and State of Tennessee laws for employment purposes. I'm pretty sure I abide by AZ laws since most of the work is done in AZ, but I thought I would ask just in case. Thank you, and everyone else who responded, for taking the time to read my posts and respond. I really appreciate it! You all are wonderful people, and you have created a fabulous resource! Thank you!!

                          Comment


                          • #14
                            If you live and work in Arizona, you are considered an employee of Arizona and Arizona laws apply. It doesn't matter where the corporate headquarters is. However, you're batting a thousand in that of all the states you mention, none of them have any laws requiring that vacation be paid out at termination. Not Tennessee; not New Mexico; not Texas; not Nevada. There are more states that don't require it than that do. At best, one or two of them require that an employer who has a policy of paying it out follow their policy. And, as DAW has already indicated, even in the states that do require unused vacation to be paid out, none of them have any legally mandated formula for the calculation. Not even my state, and my states regs on vacation payout are perhaps the most convoluted in the US.

                            So no, it doesn't make any difference.

                            ETA: It's always worth asking!
                            Last edited by cbg; 03-21-2014, 11:45 AM.
                            The above answer, whatever it is, assumes that no legally binding and enforceable contract or CBA says otherwise. If it does, then the terms of the contract or CBA apply.

                            Comment


                            • #15
                              No idea why they wlould consider you an employee of TN, but it really doesn't matter. Could be that is where the headquarters is located or something but as a practical matter, the laws of the state where you are performing the work are the ones you need to follow. Having performed work in others states in the past does not change anything you describe as it sounds like you were working in AZ at the time you left.
                              I post with the full knowledge and support of my employer, though the opinions rendered are my own and not necessarily representative of their position. In other words, I'm a free agent.

                              Comment

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