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Q.How is vacation earned?
A.In California, because paid vacation is a form of wages, it is earned as the employee works. An employer’s vacation plan may provide that vacation benefits accrue on any period basis such as: daily, weekly, or by the pay period. For example, if an employee is entitled to two weeks (10 work days) annual vacation, and works full-time, eight hours per day, 40 hours per week, for each full day the employee works the employee accrues 0.219 hours of paid vacation time (80 hours of vacation time divided by 365 days = 0.219).
Now assume you are entitled to two weeks vacation (80 hours), there was no waiting period, you work for the employer for 200 days at $10 per hour, never take a vacation day, and then quit Your employer would have to pay you your accrued vacation time ($435), which is calculated as on a daily pro rata basis as follows:
200 days worked divided by 365 in a year equals 55%
55% of 80 hours vacation entitlement equals $43.84 hours earned vacation
Subtract Vacation days used = 0
Vacation earned but not taken at time of separation = 43.84 hours
43.5 hours x $10/hour (final rate of pay) = $435 vacation pay due at separation
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