Paid Time Off for Salary and Commission as per Law

(Last Updated On: April 1, 2020)

Instead of giving employees sick vacation and vacation time, many businesses offer paid time off (PTO). Instead, say, after a two-week vacation and four days of sick leave, the employee gets a 14-day PTO for whatever purpose they choose.

Some companies, however, use this term as another way of saying “vacation time.” When you work with commissions or paid staff, PTO benefits can become complicated.

Law and PTO

There is no federal requirement for a company’s PTO, vacation time or sick leave. Most states do not. Businesses can decide not only whether they provide PTO, but also what employees can use paid time off for.

However, if a company offers paid time off benefits, it must have promised that company. Companies Can’t Discriminate:

A company that allows employees to use paid time off for Christian holidays, but Jewish or Muslim holidays can be at risk of litigation.

Some states have additional laws on PTOs. In most states, companies can withdraw unused vacation time at the end of the year, but California does not allow that. Service staff in Connecticut get one hour of paid leave to work every 40 hours

Calculation Commission paid time off

Determining how much pay goes to a PTO is easier for employees per hour, but it is more difficult for staff working on a commission.

An hourly 12-hour employee who takes a 16 hour paid time off is $ 192 but commissions are variable, making the paid time off calculation even more complicated. If, say, a commissioned employee takes a week off, there are several methods:

Pay the employee only on a minimum wage basis.

  • Pay the employee based on what the employee had earned in a typical week in the previous month.
  • Pay the employee on average for the previous quarter
  • If an employee works in a mix of salaries and commissions, only pay the employee salaries.

What is legally important in case of paid time off is that the company consistently follows its paid time off policy. Given the different options available to different commission staff, it can be seen that the agency is playing or discriminating against the agency’s employment lawyer should be on top of any changes to the law to update the paid time off policy.

PTO policy for exempt employees

When a company deals with salaried employees and PTOs, it opens up a separate can of worms.

Employees who work as salaries – $ 1,500 per week instead of $ 15 / hour – are exempt from overtime laws, but if they work less than 40-hours, they receive full pay.

It is easy to set a policy for salaried employees and PTOs when it comes to spending time or calculating pay for a week’s leave.

The critical part is deciding that a salaried employee who takes one day off a week must use PTO.

Salary PTO law states that if an employee takes a day off during the week and does not use a PTO, the company can dock that employee’s salary.

Paid Time Off

However, if an employee is sent home because there is no work, the company must pay a regular salary, not the paid time off.

The salaried PTO law becomes more complex when talking about partial day absences for exempted employees.

Employers cannot dock pay for partial-day absences; Which will treat the exempt employee like an hourly employee on a regular basis.

However, the firm may be legally required to obtain a worker’s PTO and the company deducts it from the employee’s earned leave.

Until now, the court has maintained this policy regarding salaried employees and paid time off.

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