Determining Vacation Pay Upon Termination

kprefontaine

When terminating an employee who receives commissions plus a
base salary do we have to pay them out vacation days that would account for
their salary including the commissions? 
For example if they made $40,000 as a base and were owed 1 day worth of
vacation accrual we would pay them out $150.00, but if we take into
consideration commissions and then base that on $80,000 we would owe them
$300.00.

 

Also, we are to take commission into consideration is that
based on the past 12 months?

We have offices in both California and Arizona.

 

Thanks for your help,

k

TXHRGuy

What does your vacation policy say about how vacation compensation is calculated?  Unless there is a CA statute or 9th odd-ball decision, that should be sufficient.

kprefontaine

Our policy doesn't state how vacation pay is paid out upon termination.  The general policy is that vacation time is earned on a montly bases but does not go into further details. 

HRforME

How do you payout when they take a day off? Do you take into account commission?  I would do the same in the termination situation.

 That said, I don't know many companies that would take into account commission.

TXHRGuy

[quote user="kprefontaine"]Our policy doesn't state how vacation pay is paid out upon termination.  The general policy is that vacation time is earned on a montly bases but does not go into further details. [/quote]

Time to tighten up the policy.  I don't know of any company that pays vacation time including commissions on top of any base pay.  I also don't know of anybody who offers vacation but doesn't have the numbers screwed down tightly in their policy: I would fix that to avoid future problems.

kprefontaine

In response to HRforMe;

"How do you payout when they take a day off? Do you take into account commission?  I would do the same in the termination situation.

 That said, I don't know many companies that would take into account commission."

 

We simply pay them for the day off based on their base salary.

 

In response to TXHRGuy;

Vacation is on a monthly basis, based on their annual entitlement, that is clearly stated in our policy. 

We are a Canadian company so what employees are entitled to upon termination is much clearer for us here then in the US.  Not all of our employees receive commissions and to day we have only been paying out vacation days accrued based on their base salary, but needed to verify that that is a common practice in the US.

Thanks everyone for your help