Vacation Policy dilemma

dwitt

Hi everyone,

Last year we changed our vacation year from May 1 - April 30 to a Calendar year. A calendar year vacation policy allows us to use tools to track vacation on our payroll system, timeclock etc. We are now running into a problem as we approach the end of the year.

**Our vacation policy does not allow any carryover to the next year.

**Approximately 50% of our workforce now has 20 days vacation per year.

Every year management decides whether or not we can shutdown for the Christmas holidays - usually at the beginning of December. (Our biggest customer is Cat and they pretty much dictate our operating schedule with last minute drop ins, etc). This last minute decision complicates things for the employees trying to schedule their remaining vacation days.

Supervisors are now expressing dissatisfaction with the change in our vacation policy to a calendar year and have told me that many of their employees are saving vacation in case we shutdown during the holidays. If we remain open, many employees are not going to be able to take their vacation time because they will be asked to work.

**Accounting does not want to make exceptions to a great number of employees to carry over vacation.

Does anyone have any suggestions how we should handle this? Does your company have a Calendar year vacation policy?

aliciac

We have vacations based on each individual employee's hire date and they have to use all of their vacation within that anniversary year and it's still able to be tracked by our payroll system.

It seems that moving to that kind of system from something else would require a period of adjustment to see how it was going to play out given your differing holiday schedules. Why not allow for some flexibility in this first year if needed to see if it's even a possibility moving forward to keep this system.

If you have a lot of employees who are going to lose their vacation because of the unpredictability of your holiday calendar that's not good for morale.

What did you have as your vacation policy before?

ray a

Being a contract manufacturer dependent on our customer's schedules, we have the same problems. We pay out up to 40 hours of vacation, sick and floating holiday at the end of the year. Anything over the 40 hours is lost.

NeedCoffee

Although a calendar year schedule is easier to keep up with, we have stayed on a hire date anniversary schedule similar to Aliciac's post. I know it's a bear to deal with, but by keeping everyone on a different vacation cycle you avoid a lot of "end of year vacation rushes."

Ours is also a use it or lose it policy.

Calendar year programs are great for ease of tracking, but they really are difficult to sell your employees on. Good luck with this one - I definitely don't envy your situation!

HRCalico

We do exactly the same as Ray. I think you have put your employees in kind of a tough position - they will either be forced to take unpaid time during shutdown if they use their vacation, or if there's no shutdown, they'll lose their vacation. I wouldn't be happy, either. In situations like these, I always encourage my president to be fair - and under these circumstances, I would recommend either allowing a carryover, paying some out, or a compromise of some sort thereof. Do you have a couple of good, solid employees that you can pull aside and ask their opinion? Look for ones that aren't complainers and won't spread it all over that you talked about it, and ask them what they think is fair. They might surprise you.

Good luck - it probably won't be easy whatever you choose, but a blow to morale will last every bit as long or longer as a hit to the bottom line from paying out vacation.

ritamcguire

"...they will either be forced to take unpaid time during shutdown if they use their vacation, or if there's no shutdown, they'll lose their vacation."

***************************

Two possible solutions:

1. What about Partial Unemploymeny Benefits if you shut down at the last minute in Dec? The employees could use their vacation time as appropriate during the year and still receive some pay (~66% of their normal pay up to $320 in GA) during the shut down.

2. You could also let them cash in their vacation time if they end up having to work in Dec and have any time remaining. This is not as good as option one since it doesn't allow the employees the time off that goes with vacation pay. It is however better than losing the vacation time and most employees would like the extra cash during the holidays.

Just a thought!

Wildsporty

First of all I have to say that we were on a systems where vacations were due to hire date anniversary. We went to calendar year vacations. That lasted one year. We changed back to hire date anniversary and have been that way for the last 20 years.

Now your dilema. The options listed above a all good options, pay out portions, allow carryover, I have another possible one depending on your companies circumstances.

You say that your company has 50% that have over 20 days, that means the other 50% does not. What I would probably do is have some departmental meetings, explain the situation to the employees. I would then call for some volunteers from those that do not have excessive time built up to work the holidays if needed. I would than work with a skeleton crew just enough to get the job done for those few days.

If they indeed did this and they ended up having to work than I would give them first choice to have the holiday of their choice off for vacation in the next year.

I really also think that it would not be that inconvenient to allow the days to be carried over. It just means someone has to keep a spreadsheet of those people since your system does not do it. That could be a job for the supervisors to incorporate. Excel is pretty user friendly. Accounting would have to accrue the liability into the GL which is not that difficult.

I don't know what business you are in, but here it is not that critical. My husband's job is more so at his workplace employees are required at the first of the year to turn in vacation slips for the upcoming year. It is first come first served and they will not allow two drivers or two loaders to have the same vacation time off. It is also use it or lose it.

Hope you get it all figures out, I am really glad I do not have to deal with a calendar year system.

Shirley

dynamite9551

Sorry to be responding so late...was on vacation last week!

Why not pay out the unused vacation..in theory you would one way or the other?

For example: we pay out any unused vacation up to 40 hours at year-end (let's face it at year end I'd rather have my staff here and working vs. not working and other employees carrying their load) fewer unhappy employees; fewer schedule conflicts (maybe), ....just make sure employees are taking throughout the year.

regards.

WT

We do have a calendar year policy and it works well. Once people realize that vacation must be used or zeroed out, they get responsible. Here is one thing we did. Several days a year are deemed personal leave for those inevitable personal issues. The "year" for those days is April 1 to March 31. If you did that with from 3 to 5 days, people would be able to save some time for Christmas with no problem. They would simply have to use it by April 1. However, if this holiday shut down issue is a yearly problem, why not use the April 1 to March 31 year for all vacation. It would still be uniform and easy for accounting.

Raymond SPHR

A simple solution to this is to do basically what some others have noted. Set a table (ie 40 hours max) the company will pay out in unused vacation and anything over that is lost. In this way you still reward those who couldn't use up all their vacation due to mfg. requirements or whatever. Everybody knows up front, 1 January, what to expect and then how to plan accordingly.

Paying out unused vacation time at the end of the year, after Christmas as it were, is usually a good "carrot" to dangle because most mfg. employees would welcome the money from having spent more, on average, during the holidays.

The key is to set your parameters and be consistent ensuring nobody really loses unless they simply plan vacation time unwisely within the calendar year. Supervision should be able to work with employees on this fairly easily.

And, just for "training purposes", somebody needs to work with Accounting explaining that w/o employees there is no need for Accouting...if you get my drift.

Far too many times we make it harder on what really makes the company go (employees) because somebody in Accounting, for example, just doesn't want to be accomodating.