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HR gurus - Vacation Accruals?
Posted on 8/5/17 at 7:52 pm
Posted on 8/5/17 at 7:52 pm
Many companies have a "use it or lose it" policy when it comes to vacation time accrued. Meaning, if you don't use your vacation in that year, it doesn't roll over, you just lose it.
But, When you leave a company, you are entitled to 100% of your vacation accrual in LA.
So, with that logic, how is it permissable to wipe out that earned vacation time at FYE(fiscal year end)? Should that vacation time be paid out at the FYE if it goes unused? Thoughts?
But, When you leave a company, you are entitled to 100% of your vacation accrual in LA.
So, with that logic, how is it permissable to wipe out that earned vacation time at FYE(fiscal year end)? Should that vacation time be paid out at the FYE if it goes unused? Thoughts?
This post was edited on 8/5/17 at 8:46 pm
3
Posted on 8/5/17 at 8:44 pm to LSUAfro
Interesting concept
Counter argument is they did pay you your vacation time that year, you chose to come into the office.
Counter argument is they did pay you your vacation time that year, you chose to come into the office.
This post was edited on 8/5/17 at 8:46 pm
Posted on 8/5/17 at 8:51 pm to Mr.Perfect
quote:
Counter argument is they did pay you your vacation time that year, you chose to come into the office.
But, they never actually paid you for it.
Thinking of correlations. Gift cards.
At one point, companies were allowed to expire gift cards if not used within a given time frame. I believe they've ruled that they can no no longer wipe out the values if unused in a given time frame, but are allowed to charge "maintenance fees" for having to keep them on their books.
So, similarly thinking, the company still owes me for that time, even if I haven't been able to use it.
This post was edited on 8/5/17 at 9:04 pm
Posted on 8/5/17 at 9:04 pm to LSUAfro
What do you mean they never paid you for it?
They pay you for all 52 weeks.
Two of them you can just not show up.
If you choose to show up it's not their fault.
They pay you for all 52 weeks.
Two of them you can just not show up.
If you choose to show up it's not their fault.
Posted on 8/6/17 at 9:26 am to LSUAfro
quote:
Should that vacation time be paid out at the FYE if it goes unused?
I get paid for any unused vacation time, get a check on last day in June.
Posted on 8/6/17 at 2:56 pm to TigerintheNO
I do not think a company should pay you out for vacation at the end of the year. Their budgeted salary for you is your salary, not your salary plus your vacation. Generally, a company is not incurring more cost by you taking you taking vacation. If they pay you out, they are not incurring more costs plus the taxes they have to pay on that.
The best system I find that is fair for both company and employee is the constant accrual method. Your vacation never expires but if you reach your max vacation allowed, you stop accruing until you use it.
The best system I find that is fair for both company and employee is the constant accrual method. Your vacation never expires but if you reach your max vacation allowed, you stop accruing until you use it.
Posted on 8/6/17 at 3:13 pm to LSU1018
quote:
I do not think a company should pay you out for vacation at the end of the year. Their budgeted salary for you is your salary, not your salary plus your vacation. Generally, a company is not incurring more cost by you taking you taking vacation. If they pay you out, they are not incurring more costs plus the taxes they have to pay on that.
If I use my vacation days, they have to hire someone for those days. My replacement is paid less than my salary, so my company pays me between 70%-95% of normal pay if I don't use my days. I must/can accrue 15 days for some short term disability policy they have, but am paid out for any days above that.
Posted on 8/6/17 at 5:39 pm to TigerintheNO
If I worked in a place where my replacement costs less than paying me, I would update my resume daily
Posted on 8/7/17 at 8:29 pm to LSU1018
quote:
do not think a company should pay you out for vacation at the end of the year. Their budgeted salary for you is your salary, not your salary plus your vacation.
Actually that's inaccurate. A company should acrrue your earned vacation time and that should be budgeted for as well and an expense should be accounted for in the periods earned. If a company that does not extinguish your vacation time at year end, it's carried over on the books as a liability. The company still views that as a debt owed to the employee.
I'm just looking at it more as fair practice. I know the employment agreement verbage states the use it or lose it in the contract. Just doesn't seem like it's fair practice.
This post was edited on 8/7/17 at 8:30 pm
Posted on 8/7/17 at 8:38 pm to LSUAfro
I know from personal experiences that this is not how all Fortune 500 companies do it.
Posted on 8/7/17 at 8:45 pm to LSU1018
quote:
I know from personal experiences that this is not how all Fortune 500 companies do it.
If vacation rolls over, they absolutely should be accruing vacation accruals on the books that are payable to an employee in a given reporting period. Any auditor is going to require that, and if you're talking fortune 500, that equates to millions of dollars in liabilities. You are liable for that debt at that given time if that employee is terminated or quits, and it should be accounted for.
This post was edited on 8/7/17 at 8:49 pm
Posted on 8/7/17 at 9:14 pm to LSUAfro
okay, I misread what you said about vacation rolls over. So you are saying they should only accrue if vacation rolls over?
Posted on 8/7/17 at 9:42 pm to LSU1018
Yep.
My question was more geared towards the ability for employers to extinguish earned vacation(I understand the need for a cap) and not pay it out at year end. If I quit at Dec 31, I'm owed 100%. If I get terminated Jan 1, I'm owed nothing if I was unable to use it. Seems like it would be fair practice to be required to pay out anything over that cap, not just wipe it out. Just a theoretical question.
My question was more geared towards the ability for employers to extinguish earned vacation(I understand the need for a cap) and not pay it out at year end. If I quit at Dec 31, I'm owed 100%. If I get terminated Jan 1, I'm owed nothing if I was unable to use it. Seems like it would be fair practice to be required to pay out anything over that cap, not just wipe it out. Just a theoretical question.
Posted on 8/8/17 at 7:13 am to TigerintheNO
quote:
I get paid for any unused vacation time, get a check on last day in June.
Our policy changed a couple of years ago, and any vacation accrual above 6 weeks is paid out each January. I love that, and I find creative ways to take off work without using a lot of vacation time.
Posted on 8/8/17 at 2:33 pm to LSUAfro
It is only permissible if it is specifically stated in an employee handbook that PTO is a gift, or gratuity, and thus not a benefit. If that language is used, they don't have to pay it out because it wasn't "earned".
This is confusing because it is "accrued" throughout the year, but it isn't an actual accrual of a liability. Companies that practice this should just give you the full allotment on Jan 1. I personally think it is a pretty shitty practice.
This is confusing because it is "accrued" throughout the year, but it isn't an actual accrual of a liability. Companies that practice this should just give you the full allotment on Jan 1. I personally think it is a pretty shitty practice.
Posted on 8/8/17 at 9:12 pm to OceanMan
quote:
It is only permissible if it is specifically stated in an employee handbook that PTO is a gift, or gratuity, and thus not a benefit.
I guess that's my hang up. It seems like the language in my non legal mind is ambiguous. It seems like it should always be a benefit.
Anyways...it was just a food for thought question, and I wondered if that topic had ever been ruled on and if there was legal precedence on how unused vacation should be handled upon year end "use it or lose it" programs.
This post was edited on 8/8/17 at 9:13 pm
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