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.
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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.
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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 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.
Employer's liability for violations of wage regulations
The need to adhere to the minimum wage is stated in Art. 7 and Art. 27 of the Constitution of the Russian Federation, in Art. 133 and art. 133.1. Labor Code of the Russian Federation, as well as in Federal Law No. 82. Violation of such a legal requirement entails administrative liability for the employer under Part 6 of Art. 5/27 Code of Administrative Offenses of the Russian Federation.
In particular, liability for legal entities is expressed in a fine of 30 thousand rubles. In addition, on the basis of Art. 2.1. Code of Administrative Offenses of the Russian Federation, the manager himself may be held liable. In case of repeated violation, the fine will be significantly increased.
Based on Art. 145.1 of the Criminal Code of the Russian Federation, private entrepreneurs and managers may also be subject to criminal liability in the following circumstances:
- employees were provided with wages below the minimum wage for more than two months;
- the arrears of wages were carried out intentionally on the part of the manager.
Thus, an additional payment up to the minimum wage level is a necessary condition for working if the employee’s final earnings are below the established norm, the Therussiantimes.com website informs. Managers are strongly advised to familiarize themselves with the rules for calculating and providing the surcharge in question in order to avoid administrative or even criminal liability.
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.
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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.
How to make an additional payment to the minimum wage for vacation pay in 2021
To find out whether this additional payment is needed or not, you first need to calculate the average daily salary. Just like they do with the calculation of vacation pay.
After this, the resulting figure is compared with the average daily salary based on the minimum wage. If the second is higher than the first, an additional payment will be required.
In order to correctly calculate the average daily salary according to the minimum wage, it is necessary to rely on the procedure defined by Resolution No. 922. It states that the average daily salary is the entire accrued salary for 12 months, divided by 12 (months) and 29.3 (average number of days per month according to the Labor Code of the Russian Federation, which does not take into account 14 public holidays per year).
Therefore, in a situation with the minimum wage, it will be necessary to divide the existing minimum wage by 29.3. In 2021 it is 380.99 rubles.
In situations where a person’s average daily salary is below this amount, an additional payment will be required to reach this value. To justify the additional payment, you can write a separate accounting statement.
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?
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— 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).
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Is compensation for unused vacation included in the minimum wage? | Vologda
Thanks for answers. Could you comment on this article:
Vedomosti
Anna Ivanova
01.09.2015
In Russia, judicial practice is as follows: an employee’s leave that is not used on time is lost, and it is impossible to defend it in the Moscow courts. As a rule, vacation disputes arise if an employee is fired and is not paid compensation for unused vacation. The employee goes to court and loses the dispute due to missing the statute of limitations. Let us remind you that for labor disputes not related to reinstatement at work, the statute of limitations is three months from the day the employee learned (or should have learned) that his right was violated. The employee rightly counts three months - the statute of limitations - from the date of dismissal, because it is on the last working day, having received the final payment, that the employee learns that he was underpaid in compensation for unused vacation. And this employee is refused by the court. The fact is that about four years ago, Convention No. 132 of the International Labor Organization “On Paid Leave” (revised in 1970; hereinafter referred to as the Convention) came into force in Russia. And the ninth article of the convention established the employee’s obligation to use two working weeks of rest within one year, and the rest - no later than 18 months after the end of the year in which this leave is granted. And after this period, the rest of the vacation expires. The subtlety is that a norm similar to the ninth article of the convention has existed in the Labor Code of Russia (LC) since 2001 (Part 3 of Article 124 of the Labor Code), but the calculation principles there were different: for example, with the consent of the employee, it was allowed to transfer vacation to the next working day year, but the leave had to be used no later than 12 months after the end of the working year for which it was granted. At the same time, previously the courts did not consider the notorious Article 124 of the Labor Code as an obstacle for an employee to receive compensation for all unused vacations upon dismissal.
But the convention changed judicial practice. Now, referring to the ninth article of the convention, the courts add three months (the limitation period) and calculate the right to claim compensation separately for each year. For example, on January 1, 2012, the employee became entitled to a vacation of 28 calendar days. According to the convention, the employee must use at least two weeks of this leave during 2012, and the rest - until June 2014 (within 18 months). If the employee has not used this leave before the specified period, then he has another three months of the limitation period (until October 2014) to receive it. And if the employee never used his vacation and left the company in July 2015 without receiving compensation, the court denies him payments citing the convention and the passage of the statute of limitations.
Often, both the employee and his employer are equally to blame for the fact that the employee did not use his vacation. And the latter is unlikely to allow an employee to go on unscheduled leave lasting several months. Therefore, we need to look for a compromise. You can break your vacation into several short parts: for example, take a vacation from Friday to Monday inclusive for several weeks in a row, which will amount to four days of vacation, because it is measured in calendar days. Some companies categorically do not allow employees to take more than 2-3 weeks of vacation per year and are ready to arrange the remaining days in the form of weekend leave. This approach is not legal, since Saturday and Sunday are already days of rest for the employee and, in fact, by its actions the employer circumvents the ban on monetary compensation for the main vacation. But even this not entirely legal approach is better than the disappointed expectations of an employee hoping for a fair payment upon dismissal, and subsequent claims against the employer.
The author is the head of the labor law practice of the law firm “Egorov, Puginsky, Afanasiev and Partners”
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.
