Is the prior year earned but unused vacation pay required to be paid at your current rate of pay or the rate of pay when you earned it?

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Is the prior year earned but unused vacation pay required to be paid at your current rate of pay or the rate of pay when you earned it?

Previously I was paid as a full time employee for 40 hours of work. I have unused vacation time first day of work was August 1st. My employer had reduced my work schedule to 30 hours per week beginning May 1st.. Up until now, no vacation time has been taken. Now that I am taking 1 week of vacation, earned prior to my hours/salary reduction, does the employer have to pay at the old full time rate of salary vs the current part-time 30 hours rate of salary?

Asked on July 12, 2019 under Employment Labor Law, California

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 1 year ago | Contributor

No, when vacation time is used (or paid out, in some cases), it is used (or paid) at the employee's *current* rate. Usually, this is good for the employee, since most people's salaries go up over time (promotions, raises, etc.) so they are paid at a higher rather than they had when the earned the vacation time, but there are cases, like this one, where it works to their disadvantage.


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