I, like many people, dream of a vacation. I can’t wait until this period comes and I can relax, forgetting about work for a while. The only thing that causes me not very happy thoughts is the fact that my earnings are not very large, which means that when calculating vacation pay, I can hardly claim a significant amount.
As it turned out, I can slightly increase the amount of compensation paid in connection with the vacation. The fact is that I am entitled to an additional payment up to the minimum wage when calculating vacation pay, and payment of a lesser amount is considered a violation of current legislation. So, let's look into the issue and find out if this is actually true.
Basic nuances of calculating vacation pay
The period during which a citizen does not fulfill his duties at work, but rests, is provided for 11 months worked, and is called vacation. The regulated vacation period is 28 days.
The law stipulates the conditions under which a citizen can submit a corresponding application and in certain cases, this right arises for a person after six months after performing his duties at the workplace.
Vacation payments are compensation for an employee’s average earnings for one month. Typically, the cost of one working day is calculated, and then the resulting figure is multiplied by the number of days in the vacation period.
Articles on the topic (click to view)
- Fine for late payment of vacation pay
- What to do with unused vacation
- What to do if your employer does not pay vacation pay
- How long after employment is vacation allowed?
- Is maternity leave taken into account when calculating pensions?
- Accounting for compensation for unused vacation
- Dismissal while on maternity leave
As a result, you can even calculate the amount of vacation pay yourself, but it is necessary to take into account that the calculation of vacation pay when the minimum wage increases is carried out taking into account the new size of the indicator. In other words, the average citizen’s earnings for calculating vacation pay cannot be less than the minimum wage accepted at the time of calculation. It is important to emphasize that the minimum wage is reviewed and approved by the government annually and as the inflation component grows, it also increases.
What data is required to calculate vacation pay?
To answer the question whether the minimum wage is included in the list of indicators required for calculating vacation pay, you will need to find out how the total amount is calculated. The following data is required for the calculation:
- duration of the vacation period;
- average daily earnings of a worker.
This is important to know: Application for leave without pay for a civil servant
According to Art. 115 of the Labor Code of the Russian Federation, the duration of vacation according to the standard can be no more than 28 days and only employees who perform their work duties within 11 months from the date of entry to work or from the date of the last vacation period can apply for this period. A citizen can receive half of the required period within six months after employment. The right to split vacation into parts is reserved to employees by the Labor Code.
Average daily earnings are the amount a citizen receives for each day of work. To get this figure, you will first need to calculate the average earnings using the formula:
- total income for the billing period / number of months in the billing year (usually 12) / 29.3 (average number of days per month.
The last step is necessary to determine exactly the average daily earnings. As a result, we can summarize - the minimum wage at this stage does not affect the calculation of vacation payments.
How is additional payment made to the minimum wage level?
In order to find out whether an additional payment needs to be made, you must first determine the employee’s average daily earnings. Everything is identical with the calculation of vacation pay. After this, the resulting figure is compared with the average daily minimum wage. If the first indicator is less, then an additional payment is required.
In order to correctly calculate the average daily earnings, you should focus on Resolution No. 922. In accordance with it, all wages received during the year are taken. It is divided by 12 (the number of months). The resulting value must be divided by 29.3 (the average number of days per year). This formula is recommended by labor legislation. It takes into account that during the year the employee had 14 holiday days off. That is why the figure is taken at 29.3. The same figure is taken to calculate the average daily salary for a particular month.
If the calculations show a result that is below the minimum wage, then an additional payment must be made. In order to justify additional costs, you can issue an accounting certificate.
How does the minimum wage affect the final amount of vacation pay?
I have already said that such an indicator as the minimum wage (minimum wage) is approved at the legislative level by the government every year. The indicator serves to protect and provide certain guarantees to individuals performing certain job duties. In simple terms, the employer does not have the right to pay the employee less than the minimum wage at the time of calculations.
Expert opinion
Polyakov Pyotr Borisovich
Lawyer with 6 years of experience. Specialization: civil law. More than 3 years of experience in drafting contracts.
A significant point is that the minimum wage does not determine the size of the salary, but rather the payment that a citizen receives “in hand.” The amount should include various compensations and bonus payments.
Additionally, it is worth noting that only workers who have performed their duties for a period of time specified by current legislation can count on the minimum wage. Despite the fact that the minimum wage is set at the federal level, subjects can independently determine their indicator, but on condition that it is not less than the federal one. Starting from July 1, 2021, the minimum wage is 7,500 rubles.
The procedure for calculating vacation pay and additional payment up to the minimum wage
Employees can receive additional payment to the minimum level only if two conditions are met:
- the employee performed the work for the required number of hours;
- the amount of his vacation pay is less than the specified minimum wage.
In other cases, no payment is made, even if the amount accrued for payment is less than the subsistence level.
The procedure for calculating vacation pay is as follows:
- The period for calculating the payment is determined.
- All employee income for the month included in the selected period are added up.
- The average daily earnings are calculated.
- The number of vacation days is multiplied by the resulting indicator.
This is important to know: Cancellation of leave due to dismissal
The amount received is compared with the current minimum wage and if it is less than the accepted figure, then the employer is obliged to make an additional payment to the established minimum.
In conclusion, it should be noted that every citizen who meets the requirements of the law can count on additional payment to vacation pay if it is less than the minimum wage. This rule is established by the Labor Code and must be complied with by employers.
Is additional payment up to the minimum wage required when compensating for leave upon dismissal?
Employee wages are a necessary condition for the company’s legitimate work activities. The legislation of the Russian Federation provides workers with a number of special guarantees that allow the employed population to be protected in the course of their professional activities. One of these guarantees is the provision of a decent salary level. Consequently, the employer cannot pay a subordinate a salary below the established minimum wage. However, if this occurs, the employer must take care of assigning an additional payment to the minimum level of earnings in the region. Regulatory framework of the minimum wage in 2021 Based on Art. 3 Federal Law No. 82 dated June 19, 2000 “On the minimum wage”, the minimum wage is a conditional amount of funds that is used to regulate salary payments to employees, as well as to calculate the volume of social security for various groups of the population.
Additional payment up to the minimum wage in 2021 Questions regarding establishing the amount of wages for employees if it is below the minimum wage (hereinafter referred to as the minimum wage). In accordance with Article 129 of the Labor Code of the Russian Federation (hereinafter referred to as the Labor Code of the Russian Federation), wages are remuneration for work depending on the qualifications of the employee, complexity, quantity, quality and conditions of the work performed, as well as compensation payments and incentive payments. According to part three of Article 133 of the Labor Code of the Russian Federation, “the monthly salary of an employee who has fully worked the standard working hours during this period and fulfilled labor standards (labor duties) cannot be lower than the minimum wage.”
When the average salary cannot be less than the minimum wage We compare the employee’s average monthly earnings for the billing period with the federal minimum wage in force during the period of payment based on the average salary.
When does the minimum wage affect the amount of vacation pay?
In connection with the increase in the minimum wage, many employers have increased workers' wages three times over the past year. And during the holiday season, accountants have questions about whether the increase in the minimum wage affects the amount of vacation pay that needs to be paid to employees. A Rostrud specialist agreed to answer them.
— Igor Ivanovich, explain this situation. The employee goes on vacation from 05/03/2018 for 28 calendar days. The amount of vacation pay, calculated based on average earnings for 12 months, amounted to 8,960 rubles. The employee has no working days in May 2021, since May 1 and 2 are holidays. What formula should be used to calculate the amount of vacation pay based on the minimum wage:
• option 1:
Minimum wage in effect during the vacation period / Number of calendar days in the month in which the vacation falls x Number of calendar days of the employee’s vacation
• option 2:
Minimum wage valid during the vacation period / 29.3 x Number of calendar days of employee vacation
The regulation stipulates that the average daily earnings to pay for vacation provided in calendar days are calculated by dividing the amount of wages actually accrued for the billing period by 12 and by the average monthly number of calendar days (29.3).
Taking into account the requirements of clause 18 of the Regulations and the fact that the employee’s average monthly earnings during the billing period do not reach the minimum wage, to calculate the average daily earnings, the minimum wage is divided by 29.3. And after that, the amount of vacation pay will be determined based on the number of calendar days of vacation (28 days).
In this case, based on clause 18 of the Regulations, is it necessary to calculate the additional payment of vacation pay up to the minimum wage in proportion to the number of vacation days? Or is there no need to charge or pay anything extra, since additional payments must be made only when the employee goes on vacation for a whole month?
— The employee’s vacation began in April and continues in May. For example, he went on vacation for 8 calendar days from 04/28/2018 to 05/05/2018.
— The employee works part-time. When calculating vacation pay, it turns out that today it is less than the minimum wage. Should vacation pay be calculated for a part-time worker based on the minimum wage or not? If so, should the minimum wage be divided by 2 since he works part-time?
This is important to know: Is it possible to fire on the last day of vacation?
— The duration of working hours when working part-time should not exceed 4 hours a day. Within 1 month, the duration of working hours when working part-time should not exceed half of the monthly standard working hours established for the corresponding category of employees.
When providing a part-time worker hired at 0.5 rate of annual paid leave from May 1, 2021, you should keep in mind clause 18 of the Regulations. Taking this clause into account, the average monthly earnings of such an employee who has worked the full working hours during the billing period and fulfilled labor standards (labor duties) cannot be less than half of the minimum wage established by federal law.
Thus, to calculate the average daily earnings to pay for vacation, a part-time worker should take into account the average monthly earnings calculated on the basis of the minimum wage, which in this case will be proportional to the length of working hours of such an employee (1/2 of the minimum wage).
Newsletter for an accountant
Every day we select news that is important for an accountant’s work, saving you time.
Receive free accounting news by email.
Comparison of vacation pay and minimum wage
First, average earnings are calculated - as is always done when determining vacation pay. Then the average daily earnings are calculated based on the minimum wage.
When calculating, you need to focus on the procedure that is prescribed in Resolution No. 922. The sum of all accruals for 12 months that are taken into account is divided by 12 and multiplied by the average number of days in a month - 29.3.
In the case of the minimum wage, it is not the accrued salary that is taken, but its minimum amount , which is established in the region. If it is not established, then the federal minimum wage is taken. Next, the two indicators are compared, and if the first is less than the second, then an additional payment is required.
When calculating average earnings, you need to take into account not only salary, but also bonuses, allowances, and compensation , which are of a production nature . After all, they are part of the salary.
If the employee received additional payment for overtime hours, it is not taken into account when comparing average earnings with the minimum wage. After all, the minimum wage is set based on a full working day, without overtime or reduction. Also, the amount of sick leave benefits, financial assistance and other payments not related to work activities are not taken into account.
The formula for calculating the additional payment is as follows: minimum wage during the vacation period / number of days in the month of the vacation period * duration of vacation - amount of vacation pay.
Part-time or part-time work
If we are talking about additional payment to the minimum wage for an external part-time worker or an employee who works part-time, then the same approach remains. But the additional payment is made in proportion to the time worked.
For example, if a part-time worker worked ½ rate, then for this he is supposed to pay at least ½ minimum wage. Accordingly, based on the same principles, payment is made from vacation pay.
The amount of vacation pay is below the minimum wage: is it necessary to pay extra?
How to calculate, pay extra and what happens if you break the law.
First of all, it is worth turning to the regulatory framework. What the law says about this situation:
- Article 114 of the Labor Code obliges the employer to retain the employee’s average earnings during the vacation period. That is, vacation pay should not be lower than the employee’s average salary.
- Article 139 of the Labor Code of the Russian Federation and other documents speak about how to correctly calculate average earnings. Accountants are well aware of this procedure.
- In December 2021, the Government of the Russian Federation published Resolution No. 922, which, among other things, states that the calculated average monthly earnings cannot be less than the minimum wage.
Thus, it turns out that when calculating the average monthly earnings, which is needed to determine the amount of vacation pay, the result should not be a value lower than the minimum wage.
Additional payment up to the minimum wage in Moscow, Moscow Region, St. Petersburg
Having adjusted the income level of employees, we should not forget that a number of regions of the country have determined the regional minimum wage for calculating earnings. If in the area where the organization is located there is a regulation defining a regional minimum wage, it will become the determining leader in calculating the minimum amount of payments.
Employers are automatically subject to the regional agreement and are required to comply with its terms, unless they have sent a written refusal to the relevant government structures within 30 days. Except for enterprises financed from the federal budget, which are not subject to such rules.
Having concluded a tripartite agreement between the Moscow government, the association of trade unions and employers, the minimum wage rate was set at 17,642 rubles. Applies to a settlement to provide citizens with a minimum income in the region.
By amending Law No. 82 of the Moscow Region, the minimum wage was established in the amount of 13,750 rubles and is valid throughout the entire territory of this region. The regional agreement on the amount of minimum wage in the territory of St. Petersburg established the amount of the regional minimum wage in the amount of 16,000 rubles.
