If you’re unemployed in California and receiving benefits, you may be wondering whether or not you have to claim vacation pay. The answer is: it depends.
What is vacation pay?
Vacation pay is a benefit that some employers offer to their employees as a way to compensate them for time off. This can include paid time off (PTO), sick leave, and other types of leave.
Do you have to report vacation pay on your unemployment claim?
In California, if you receive vacation pay while you are unemployed, you must report it when you certify for your benefits. This includes any PTO or sick leave that you may have accrued while you were employed.
How does vacation pay affect your unemployment benefits?
The amount of vacation pay that you receive can affect the amount of your unemployment benefits. If the vacation pay is considered wages, it will be deducted from your unemployment benefits dollar-for-dollar.
For example, if your weekly unemployment benefit amount is $400 and you receive $200 in vacation pay for the week, your unemployment benefits will be reduced to $200 for that week.
What if the employer pays out all accrued vacation time at once?
If an employer pays out all accrued vacation time at once when an employee separates from employment, this payment is considered a lump sum payment. Lump sum payments are treated differently than regular wages when calculating unemployment benefits in California.
The Employment Development Department (EDD) will divide the total lump sum payment by the employee’s hourly rate at their last job to determine how many hours of work the payment represents. Then they will use this number to calculate how much the employee’s weekly benefit amount should be reduced.
What if the employer requires employees to use up their PTO before laying them off?
If an employer requires employees to use up their PTO before laying them off, the PTO will be treated as regular wages. This means that it will be deducted from the employee’s unemployment benefits just like any other wages would be.
Conclusion
In summary, if you receive vacation pay while you are unemployed in California, you must report it on your unemployment claim. Vacation pay can affect the amount of your unemployment benefits, depending on how it is paid out. If you have any questions about how vacation pay may affect your unemployment benefits, contact the EDD for more information.