Hello All!
I’m having a struggle with how QBO tells me their vacation pay on their Payroll Module is not broken, but working as intended.
In Ontario, the minimum vacation pay is 4% of earnings.
But also,
The minimum vacation time off earned is 4% of hours.
These don’t equate. Because raises happen. And Overtime happens.
But QBO equates them. And because of this, when vacation pay is set to be accrued in QBO, employees are either being paid too little (In the case of overtime not increasing the “Vacation Hours Banked”) or the employees are being paid too much (in the case of a raise). It feels non-compliant. It definitely causes DIY bookkeepers to pay less vacation pay than the ESA stipulates when an employee works a lot of overtime, because they pay out the “Accrued hours” that show as available to pay out on the payroll interface. Am I wrong to feel indignant? It’s been going on for years.
I really would like to understand why QBO says this is the way it should be. Because I don’t think it should be this way. Sure, allowed time off should be tracked (and often isn’t, so good to highlight that fact). And sure, we need to track 4% of earnings. But QBO isn’t tracking allowable time off if the the vacation pay is not being accrued! And it is equating allowable time off as something to be paid hourly outside of the 4% accrued earnings.
Am I understanding the allowable time of requirement of the ESA correctly and what QBO is trying to do here? What am I missing?
