If workers are paid by salary and the employer provides “paid vacation” during the year, you need to ensure that it meets the minimum ESA standards.
As mentioned in previous blogs, “salary” is simply a method of distributing pay; employers are still required to track and calculate the actual hours worked for a variety of compliance reasons, even for Managers who would be exempt from overtime.
In many cases, simply providing the worker with their mandated 2 or 3 weeks of “paid time off” will not actually meet the ESA provision.
If they work overtime or receive any type of bonus or commission that is recognized as “wages” by the ESA, then the employer is required to include that money in the calculation of vacation pay (the 4% or 6% applies). The exception to this is tips and gratuities for service workers.
Employers should be tracking the accruing vacation pay for their workers so that, upon termination or resignation, the employer pays out the “banked” pay owing to the employee.