What You Need to Know About Paid Time Off for Hourly Employees
The federal government does not require employers to provide paid time off (PTO) for hourly employees, but most businesses provide it. Here’s everything you need to know about calculating paid time off as an hourly employee.
Employers give an average of 11 days off to hourly employees in the United States. There is no single method employers can calculate how to give paid time off to hourly employees, but here are a couple of methods.
Calculating PTO for Hourly Employees
To calculate paid time off for hourly employees, it is standard to divide the number of PTO days per year allowed by the total number of hours the employee would work in a year. Some employers give a lump sum of days on the anniversary of an employee’s hire date, while others calculate it by the days or hours worked.
Related: PTO Payout Laws By State
Employers must give PTO daily. To calculate vacation time based on a daily accrual rate, you would use the following vacation pay formula:
Days in a workweek x 52 = workdays a year
Start your calculations by figuring out the number of days your employee works. For our example, we’ll use five. Now, multiply the number of days by 52 weeks in a calendar year. Don’t forget to exclude any paid holidays or days off.
5 (days of work) x 52 (how many weeks in one year) = 260 days of work in one year
Next, you will subtract the number of workdays (260 in our example) by 5 (allocated paid time off) and any paid holidays (5).
Related: Can I Sue My Employer For Lying?
260 – 5 (PTO) = 255 days 255 – 5 (holidays) = 250 workdays in one year
To get the accrual multiplier, you must divide the number of vacation days by the total workdays. In our example, we have five holidays and 250 workdays. So the math would look like this:
5/250 = .02 days
.02 days is the accrual multiplier
The employee earns .02 days of paid time off for each day worked.
Contact Us
If you or a loved one would like to learn more about Calculate PTO for Hourly Employees, get your free consultation with one of our Employment Attorneys today!