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John, Employment Lawyer
Category: Employment Law
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Experience:  Exclusively practice labor and employment law.
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I am an hourly employee. Our employee handbook states that

Customer Question

I am an hourly employee. Our employee handbook states that we "accrue" PTO at the rate of .5769 hours per pay hour worked (15 days per year). It must be used in increments of 2 hours, minimum.
So. I worked a total of 36.86 hours in 4 days and took "8 units" which is 1, 8/hr. day off. I expected to see 4.85 hours at the time and a half rate in my check. Instead, I was told that in a week where pto is used, I do not get overtime because I get paid "actual hours worked". IF that is how the practice I work for operates, should I not then be reimbursed back that 4.85 hours of "accrued" pto then? It seems they cannot have it both ways. I have my PHR but this is a gray zone I am 99% sure I am correct about. And, if I am correct, I would like to approach our new practice administrator about this with a statute or something, respectfully ***** ***** Please and thank you, ***** ***** am in NJ.
Submitted: 7 months ago.
Category: Employment Law
Expert:  John replied 7 months ago.

Vacation time isn't mandated by law. In other words, employer do not have to give employees any paid vacation. Thus, only the contract for vacation pay, which is usualy in the form of a vacation policy controls the scenario. In this specific instance you ask whether paid vacation should count towards hours worked. The answer, absent reviewing the employer's policy which appears to be they do not credit it toward hours worked for the week, is that the wage laws only count hours physically worked toward the 40 hours per worweek. You can find this on the NJ DOL webpage here:

As well you can find this in the Fed DOL regulations which state :

§785.7 Judicial construction.

The United States Supreme Court originally stated that employees subject to the act must be paid for all time spent in “physical or mental exertion (whether burdensome or not) controlled or required by the employer and pursued necessarily and primarily for the benefit of the employer and his business.” (Tennessee Coal, Iron & Railroad Co. v. Muscoda Local No. 123, 321 U. S. 590 (1944)) Subsequently, the Court ruled that there need be no exertion at all and that all hours are hours worked which the employee is required to give his employer, that “an employer, if he chooses, may hire a man to do nothing, or to do nothing but wait for something to happen. Refraining from other activity often is a factor of instant readiness to serve, and idleness plays a part in all employments in a stand-by capacity. Readiness to serve may be hired, quite as much as service itself, and time spent lying in wait for threats to the safety of the employer's property may be treated by the parties as a benefit to the employer.” (Armour & Co. v. Wantock, 323 U.S. 126 (1944); Skidmore v. Swift, 323 U.S. 134 (1944)) The workweek ordinarily includes “all the time during which an employee is necessarily required to be on the employer's premises, on duty or at a prescribed work place”. (Anderson v. Mt. Clemens Pottery Co., 328 U.S. 680 (1946)) The Portal-to-Portal Act did not change the rule except to provide an exception for preliminary and postliminary activities. See §785.34.

As you can see you must at least be on the premises or a prescribed place of work to be considered working. So it is clear you weren't working and it shouldn't be counted toward hours worked.

The second part, you ask whether the you should be credited back hours that exceed 40 for the week. The answer to that is totally dependent on the employer's policy; it's contract with you in regard to vacation pay. Nothing legally stops them from paying straight time for vacation hours in excess of 40 per workweek. So, only if their vacation policy prohibited the same would you be entitled to a credit back, in which case you'd have been overpaid and owe them back that amount.

Customer: replied 7 months ago.
I could have gone on NJDOL myself with what you stated above. PTO is not broken into categories. Since I worked 36.5 + 8 hours pto that would = 44.85 hours which would mean I would be "owed" 4.85 hours. IF I am not being paid overtime, I asked specifically if they should then credit back the 4.85 hours PTO then. Please advise as you did not answer my question, respectfully.
Expert:  John replied 7 months ago.

Sorry, I'm just answering the question as accurately as possible, and you appear to want legal authority on the matter - the fact is both the NJ DOL and federal DOL agree that vacation time is not "work" and not therefore count toward overtime; the link is only for the purpose of showing that. I understand it's not the answer you want, but it's accurate.

The last part was answered "only if their vacation policy prohibited the same would you be entitled to a credit back, in which case you'd have been overpaid and owe them back that amount." In other words only if their vacation policy prohibits paying vacation wherein the total hours paid would exceed 40 would you be entitled a refund of hours to your PTO bank, but conversely you'd owe that pay back.

Customer: replied 7 months ago.
34;In other words only if their vacation policy *prohibits* paying vacation wherein the total hours paid would exceed 40 would you be entitled a refund of hours to your PTO bank" So you're saying if they prohibit taht, they'd be responsible to put the pto back into my former accrual because the hours I worked + the 8 hours taken exceeded 40, they did not pay me overtime and therefore, they they WOULD owe me the hours back?
Customer: replied 7 months ago.
Also, "Nothing legally stops them from paying straight time for vacation hours in excess of 40 per workweek." I was paid nothing for the 4.85. basically I'm being told that though the hours exceeded 40 after taking the 8 hour units/8 hours of pto, the hours I actually worked prior to that date exceeded 40 (by 4.85) so I'm owed no $ or pto back?
Customer: replied 7 months ago.
This is all the same info but somehow we are missing each opthers point so hopefully this makes it clearer somehow.
Expert:  John replied 7 months ago.

I see. So they only paid you for 40 hours, despite charging your PTO bank 8 hours, which would have put you at 44.85 hours. They didn't even pay you straight time for those 4.85 hours. The question then becomes - what does the policy state about this? Does it limit time paid when PTO is taken to 40 hours, does it mandate employees take 8 hour increments (or can some lesser amount be taken). The ultimate point here is - the vacation or PTO policy is a contract and the parties are bound by it The doesn't prohibit them from essentially overcharging your PTO bank, but they have to have that ability in the policy or else you are owed those hours back. Does that make sense? If you want to tell me what the policy states I'll give you my interpretation of the language.

Expert:  John replied 7 months ago.

I believe this answers your question. However, if you need clarification or have follow-up questions regarding this matter, I will be happy to continue our conversation – simply reply to this answer. If you are otherwise satisfied with my response, please leave a positive rating as itis the only way I am able to get credit for my answers. Thank you, ***** ***** wish you all the best with this matter.

Expert:  John replied 7 months ago.

Sorry to bother you, but you haven't yet provided a positive rating for this answer. YOU MUST COMPLETE THE RATING FOR THE EXPERT TO RECEIVE ANY CREDIT, if not the site keeps your money on deposit and I get no credit for the work I put into the matter. Thanks.

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