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Thread: Accruing vacation time - opinions wanted

  1. #1
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    Question Accruing vacation time - opinions wanted

    Our employees accrue vacation time at a rate depending on their years of service. For people with 5 yrs seniority or more (most everyone), we give 2.31 hours per week which equates to 3 weeks per year. Employees can carry their balance over to the next year, and sometimes at my discretion, they can "cash in" one weeks' worth and get a vacation paycheck. So it's almost like an add-on to their regular salary.

    The issue is that now we have 2 people who have become part-timers (they work only 4.5 to 5 hours per day, out of an 8-hour day). The question is whether they should now earn fewer vacation hours per week (i.e., to the extent of their part time percentage)?

    If we cut their vacation hours accrual, then it will seem to them like a pay cut relative to other employees with similar seniority, or a taking away of a benefit they're accustomed to. They didn't become part-time voluntarily... it's that we just don't have enough work to keep them busy at this time. On the other hand, to continue vacation accrual at the same rate means that they will be earning about 5-6 weeks' vacation time per year, which is unfair to other employees and also seems rather excessive from an operational standpoint. And if they don't use the accrued hours, their balances will become (and have already become) too high (in excess of 8 wks+) - over time could be a sizable liability for the company to carry.

    What would you do? And what would be fair?

  2. #2
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    The vacation accrual should be based on both the length of time of service, and then based on the hours worked for hourly employees. If the 2.31 hours is for a 40 hour week, then if they work 20 hours, they should be entitled to 1.155 hours going forward.

    Not too sure why that's a problem, as they're not losing "time off" at all. In fact, you should let them take only the number of weeks off that they would have had if they were full time, and just pay them those first three weeks at their "full time" rate, just so it eliminates that "pool" of time.

    And of course, you need to make sure this is clearly communicated to the affected employees...
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    Member Needs New Keyboard Array Steve B's Avatar
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    I don't see the problem either. The way you were calculating it is fine and fair. It only makes sense that they earn half as much vacation if they're working half the hours.
    Steve B

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    Queen of the Forum Array KristineS's Avatar
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    Sounds to me like you have a pretty generous vacation policy. I don't see any reason why the accrual shouldn't be tied to hours worked. That only makes sense.

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    Thanks for all your responses! Any time we take away or reduce a benefit, there will be people who become unhappy. My mistake was failing to implement the policy immediately upon the change in hours worked. As it stands now, the affected people feel the higher accrual rate is the norm. Frankly, I just didn't think about the issue until only recently. We'll make the change at the start of the new year, as that seems to be a convenient milestone. We'll see how it goes...

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    I agree with the comments about pro-rating the vacation accrual for part time employees based off a 40 hour week. Of course, as you indicated when you said you will implement it at the start of the new year, any vacation that has already accrued cannot be taken away. Any changes must be applied prospectively only.

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    Member Needs New Keyboard Array Steve B's Avatar
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    BTW - thanks for reminding me how much I do NOT miss my days as an HR Manager.
    Steve B

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    Also, thinking about this further and clarifying my comments above -- if they're only entitled to THREE WEEKS time, that is what needs to be in effect. They may now be accruing more generously by working 20/hrs a week, but you need to make sure when being paid, they are paid at the three weeks (40/hours), and the for the excess time at the 20/hrs a week rate. They're just accruing their vacation sooner, and shouldn't necessarily be able to get "more" vacation, which is what I think needs to be clarified.
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    OK we issued the policy clarification yesterday Jan. 3, our first day back in the new year (see pdf below). Seems to be acceptable to most, and I did have an individual discussion with each one affected to answer any questions or concerns. I have cropped out specific company details to protect the innocent .

    Policy paid time off.pdf

    The next-to-last paragraph speaks to the situation of part time employees. A 20 hr/wk part-timer who has worked at the company more than 5 yrs would earn paid time off at a rate of 1.154 hrs/wk (we'd actually use 1.16 since we round up) to end up at 15 days/yr. If he/she goes back to full time, then the accrual rate reverts to 2.31 hrs/wk.

    @Evan, I appreciate your feedback but I'm not sure I understand the particular nuance you are pointing out. The policy only addresses the accrual rate and we don't use 2 different rates for one person at the same time. Our payroll service provider has a hard enough time keeping track of our current policy!

    @Business Attorney: Agreed, we're under California jurisdiction so time already accrued remains untouched. Also we can't implement any kind of "use it or lose it" policy.

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    If I worked 40 hours an accrued 3 weeks, and now work 20 hours, I do not get 6 weeks based on what's in the system. If I'm taking a week off, I should be paid for 40 hours even though I only work 20 hours, at least until I use all of these 3 weeks I accrued when I worked full-time.
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