A reader asked me a question about calculating vacation for a part-time employee. Frankly, I thought the answer was obvious--it should be prorated according to the number of hours. If a person working 40 hours a week receives 15 days of vacation (120 hours), then a person working 32 hours a week should receive 12 days of vacation (96 hours). 

The company had never had a part-time employee before and, as such, had no policy. Vacation was strictly based on years of service. My reader thought the employee deserved 15 days of vacation because of the years of service.

But, because we disagreed, I threw it out as a question on my blog and on LinkedIn and got a variety of answers:  

  • Gabriela Garcia-Williams, PHR, SHRM-CP

    If the policy doesn't specify that employees have to work a specific amount of hours a week to be eligible for vacation benefits, she should get the 15 days per the policy and her tenure.

  • Rebecca Gibson
    In some companies, 32 hours a week is still considered full time. If the policy does not address the definition of full-time and part-time status and, further, who is eligible to earn vacation benefits, then this employee would earn vacation benefits in line with current policy.

  • Salvatore Lazaro, MS
    In my experience, I have seen most companies prorate the hours for part-time employees, because you are basing the PTO on full-time status.

  • Parker Davis
    0, zippo, nothing. She has every Monday off. Since you did not offer any indication of company policy of exactly what is considered a full-time employee and what constitutes eligibility for vacation. Absent that, if you begin prorating, then someone who works eight hours per week would also get vacation.

  • Vicki Byars
    To be fair to the full-time workers who are scheduled to work five-day weeks, I would prorate by four-fifths, resulting in 12 days.

One thing everyone agrees on is that a policy needs to be clear. So many small companies don't have clear policies, because they don't think through all the possibilities. The what-ifs are many.

You should assume from the moment you hire your first employee that all these questions will come up. So, when you make your vacation policy, make sure you address the following things, in addition to a number of days available.

Accrued or block grant?

Does everyone get X days of vacation in their bank on January 1 or do they accrue Y days of vacation every pay period? If it's accrued, can you take vacation before it's in your account? Think carefully about that--do you want people unable to take vacation in the first quarter of the year? 

How is vacation calculated for part-time employees?

Will you base it on the number of hours worked or strictly on years of service? What about someone who is only working part-time temporarily? Does it make a difference if that part-time status is based on the employee's request or owing to an ADA or FMLA approved condition? 

Is the vacation bank just vacation or does it encompass sick and personal days?

There are good arguments for a general PTO bank and for separate buckets, but you need to know for sure what the time off is. Generally, sick and personal days can be used without notice but vacation has to be scheduled in advance. Do you have one PTO bank but limit what happens if someone doesn't give advance notice?

Can employees roll over vacation? And if so, how much?

What happens on December 31 if someone has vacation time left in his or her bank? Does it disappear? Roll over into the next year? Is there a time period in which it must be used? Is there a maximum that can be rolled over?

Is vacation paid out when someone quits (or is fired)?

In some states, the answer to that is yes, because the law requires it, but most states make that a company's decision. If the answer is yes, do you require something in exchange, like a two-week notice period? What about unused sick or personal days?

I realize this all sounds boring and technical, but if you don't take care of these things before the issue comes up, you'll find a mess on your hands.