Under the Last and First Rule, which formula correctly describes holiday pay?

Under the Last and First Rule, which formula correctly describes holiday pay?

• A. Total wages earned in the four weeks before the holiday divided by 20
• B. Total wages earned in the four weeks before the holiday plus any vacation pay, divided by 20
• C. Total wages earned in the four weeks before the holiday plus vacation pay, divided by 12
• D. Total wages earned in the four weeks before the holiday minus vacation pay, divided by 20

Answer: (B)

The key idea is that holiday pay under the Last and First Rule uses the earnings of the four weeks immediately before the holiday and divides by the number of workdays in that period to get a daily rate, then applies that rate for the holiday. Importantly, any vacation pay earned during those four weeks is included in the calculation. So you take the total wages earned in the four weeks before the holiday, add any vacation pay, and then divide by 20 (the number of workdays in four weeks) to determine the holiday pay. This matches the option that adds vacation pay to the four-week wages and divides by 20. Dividing by 12 would mix in a monthly average, which isn’t appropriate for a four-week window. Subtracting vacation pay would underestimate earnings, and omitting vacation pay from the numerator would fail to reflect all earnings for that period.

The key idea is that holiday pay under the Last and First Rule uses the earnings of the four weeks immediately before the holiday and divides by the number of workdays in that period to get a daily rate, then applies that rate for the holiday. Importantly, any vacation pay earned during those four weeks is included in the calculation. So you take the total wages earned in the four weeks before the holiday, add any vacation pay, and then divide by 20 (the number of workdays in four weeks) to determine the holiday pay.

This matches the option that adds vacation pay to the four-week wages and divides by 20. Dividing by 12 would mix in a monthly average, which isn’t appropriate for a four-week window. Subtracting vacation pay would underestimate earnings, and omitting vacation pay from the numerator would fail to reflect all earnings for that period.