Vacation benefits with production-based pay

I'm thinking of paying my associate based on her production. If I do, how would I handle vacation days and holidays? She wouldn't automatically receive compensation for those days off, would she?

"Basically, if you pay your associate based on a percent of production, she won't receive compensation for days she doesn't work," says Veterinary Economics Editorial Advisory Board member Gary Glassman, CPA, a partner with Burzenski and Co. PC in East Haven, Conn. "But if you offer your associate a guaranteed base salary with a percent of production on top of that, you will pay her for days off, because she'll receive the same guaranteed paycheck whether she worked or took a week's vacation."

So, if you provide your associate with 10 holidays a year and she is paid with some form of base salary, she'll receive compensation. If she's paid on production alone, she still has 10 holidays, but you won't compensate her for those days.

You can still offer additional days off as a reward for length of service, Glassman says. Associates will usually appreciate the option of additional personal time—whether you're paying for it or not.