Vacation Pay

Vacation pay is compensation employee receive while taking time off work. It is important to understand the difference between vacation time and paid vacation because an employer may not always compensate you during your time off. In this case, the vacation time is part of employee’s benefits package, but not part of compensation package.
How Does Vacation Pay Work?
Employees typically acquire paid vacation time based on the amount of time they have worked. For example, if you are eligible for two weeks of paid vacation time each year and are on a bi-weekly pay schedule, you will accrue around 3.08 hours of vacation time for each pay period. Some employers apply all 10 vacation days to employee’s time-off bank at the same time, while others will only add vacation time into time-off bank as employee earn it. Employer should have set guidelines that identify whether you must earn accrued vacation time before employee can take time off.