Does paid vacation time count toward the 40 hours for overtime under the Fair Labor Standards Act?
Under the federal FLSA, an employer must pay a covered employee overtime pay at the rate of one and one-half times the employee’s regular rate for hours worked in excess of 40 hours during any workweek. Employers do not have to count vacation pay, holiday pay, PTO pay or sick pay as “hours worked” towards the 40 hours; however, employers may do so by their own company policy if they want to be more generous than the law.