Required to use vacation time during shut down?

HRratrace · June 2004

I recently began working for an automotive manufacturing company (non-union). This is my first experience in this type of industry (automotive). Every year at the 4th of July they shut down operations for one week.

Can we require EE's to use vacation to cover this time off during shut down? Our vacation policy does NOT address this issue at all. My thought is in abence of a policy that addresses this and in absence of any other formal EE communication advising EE's of this requirement, then no...we can not force them to use vacation. We can recommend and strongly encourage them to, but we can not actually force them to.

I've been wrong before (more times than I care to admit), so I am looking for some wise HR input.

Help???

lnelson · June 2004

That is correct, you cannot force ee to take vacation for shut down. You can recommend it to the ee's. Especially if no policy exists on this.

If this is something the company wants to incorporate then a policy must be drafted to the effect that during company shut downs all those with vacation not previously scheduled or taken will be required to take it during this time.

Lisa

Gillian3 · June 2004

Yes, you can, because vacation rules are the choice of the employer. What you describe is fairly common, I suppose in the interest of having employees away from work as little as possible. The downside is that employees may prefer to be away at some other time and resent the forced vacation. Whatever you choose, it should certainly be in the vacation policy document.

Don D · June 2004

I agree with LNelson that, in the absence of a policy or clear practice, you should not, perhaps cannot in some states, monkey with employees' vacation benefits. Certainly it is an employer's option to have or not have a vacation program and to tailor it as the employer sees fit. But to, out of the blue, mandate when they must take it will buy you trouble. It is indeed common for industry to shut down during certain times of the year, typically once or twice for a week. Some call it maintenance shutdown. Some call it annual shutdown. And many require that the employees take vacation. But in my experience it has always been either a written, manualized policy or covered by a union contract. I might suggest that you tell the employee's the policy will take effect next year.

It may also be that your boss thinks vacation pay will rule them ineligible for UI during that week. But, that's entirely another discussion.

HRratrace · June 2004

Exactly the feedback I was looking for.

Thank you very much for your help.

Hatchetman · June 2004

Plese describe what you mean by "force."

I am not familiar with Tennessee law, but there is NOTHING in federal law that I am aware of that says an employer may NOT use an employees accrued vacation or PTO time to cover the time the company is shutdown for an entire week.

If yo mean by "force" that even if the emplyee is illng to take the week as unpaid, the comapny will still pay him or her by using any vacation bank hours the emplyee has, that's okay even though it is in my mind despicable. If the employee is giving the option to use the vacation ban or go without pay, that is more reasonable.

Remember, in many states, whether to offer vacation time is strictly an employer's choice and/or under the employers control (such as with charging time banks for partial days' absences for salaried, exempts). So, the emplyer could mandate its use during the shutdown.

The issue, as I see it, doesn't fall apart simply because your company vacation policy doesn't address it. If the company's continuing practice is to do it and the company gives sufficient notice to the employees that the mandated use of vacation time will occur on the July 4th week when the comapny is shut down, then I don't see a particular problem.

As I said, I'd think it would be better if the employer gives the option but there is nothing that I am aware of in federal law that prevents the employer from paying the employee for that week using the availabe vacation time on the employee's time accounts even over the employee's objections.

This would include using the vacation time banks for salaried exempts. Since the exempt will NOT perform any work during the week, even with the company voluntarily shutdown, there is NO requirement under FLSA that the employee be paid a salary at all for that week. Thus, this opens up the use of the vacation time bank.

Don D · June 2004

"The issue, as I see it, doesn't fall apart simply because your company vacation policy doesn't address it. If the company's continuing practice is to do it and the company gives sufficient notice to the employees that the mandated use of vacation time will occur on the July 4th week when the comapny is shut down, then I don't see a particular problem."

This is precisely my point, hatchet. As I've said, if it's written policy or the company's standard practice, there would be no problem. Otherwise, you're gonna have a morale problem at best and a union organizing effort at worst. And it's not just "some" states that allow an employer to offer or not offer vacation and tailor his policy as he sees fit. The total is 50.

Gillian3 · June 2004

No, Don. It is 49. Remember the "country within a country"? California doesn't mandate whether or not an employer provides vacation but when they do they must follow certain regulations and are not totally free to provide it as they see fit. Pertaining to the issue at hand though, here and everywhere (at least to my knowledge), the employer can do as they wish, even if there is no written policy, although a written policy is much better.

Don D · June 2004

.....sorry, I wasn't thinking. x:-)

HRratrace · June 2004

By "force" I mean if they have any vacation time left (up to 40 hours) then the company would automatically pay out that vacation time to cover their days off during the shutdown.
I am not only concerned about the legal implications, but as Don D pointed out, the moral issues that could arise. Our EE's earn a very low wage and work very hard for what benefits they get. I see it as being a huge blow to morale if we suddenly up and try to burn up their vacation time on them w/o their request or permission to do so. While I now understand it may be within our right as the employer to do so, I still do not think it is prudent to without a written policy in place advising EE's of this from the get-go.
I could find no Federal or TN State law prohibiting us from doing so, however, I still feel that the company should do the morally "right" thing in this situation. In my opinion, this would be leaving the use of vacation time to the EE's discression.
The exempt salary situation is not an issue...there are only 5 of us and we will all be in here that week trying our best to get caught back up while things are quiet.
:0) Thanks for your input.

AJ SPHR · June 2004

I worked for a large manufacturer and we started instituting this requirement the past couple of years and had no problems (beyond morale issues but the mgmt group didn't care so much about that!). There was nothing in our vacation policy, either. We would announce an upcoming shutdown and in the announcement state the requirement that employees must use available PTO for that week. They weren't disciplined if they didn't have enough.

For a manufacturer, if you offer shutdowns once or twice during the year and let employees take it without pay, it became almost impossible to deal with workloads later in the year when employees took additional timeoff. So, for production reasons, management changed their tactics (yes for all the years prior we never required employees to use vacation), and started requiring it.

Ultimately we didn't have too many morale issues because we found that most employees already had applied their available time off during shutdowns when they weren't required to do so. And having a week off was always nice.

Tish · June 2004

My concern with implementing a policy like this would be - what happens when you have employees who have used up all their vacation? Will they be disciplined for attendance issues or will they just get the time off without pay? T

Then you have EEs coming to you saying "JOE BLOW got to take the time off without pay, why do I have use my vacation? If I can afford to take the time off without pay, why should I have to burn my vacation?"

Don D · June 2004

The way we handled that issue at my last job was the union contract clearly said the each employee was required to save one week of vacation to be used at annual shutdown. For those who had not yet accumulated any, they justn't get a check for that week of vacation shutdown. If these employees are living week to week, as most of us have/are, they might rethink not wanting to get that vacation paycheck the week after shutdown.

HRratrace · June 2004

Excellent point! And yet another reason why I think we should leave the decision to use vacation up to each individual EE.

The way I see it is like this:
Vacation is a benefit.
If you only earn 2 weeks of vacation per year and we shut down 2 weeks per year (4th of July and Christmas), then how can you possibly mandate that they use their vacation for shut downs? How is it a benefit then? They'd never get a personal day off!

Maybe I just have too big of a heart. But I still think vacation is for personal and family time, rest and relaxation...and an EE should be able to decide when, where and how they use this time off.

AJ SPHR · June 2004

I understand what you're saying, HRratrace, but in a manufacturing/production environment, this kind of benevolent attitude just doesn't always help manufacturing facilities get the work done. Personally I didn't like the change when my employer started mandating the use of PTO during mandatory shutdowns, but those were the rules the employer imposed so you just learned to deal with it. Some employers can be more benevolent, but I think manufacturing companies are more restricted because of high production demands.

Good luck!

lynn2008 · June 2004

The point about maintaining non-union status could be your company's biggest concern. I had several years in two different OEM automotive suppliers, both UAW. In one vacation was required to be taken during shutdown, and was in the union collective bargaining agreement, and in the other it was optional, as most employees applied for and received unemployment (this was in Kentucky).

Recommend you mine your supervisors and other staff for historical reasons as to policy development, and determine if the employees have expectations of drawing UI while on layoff.

If your company must require vacation, meet with employees and explain the rationale, as far in advance as possible so they can plan their lives.

dbutton111 · June 2004

This may not help you now, but going forward why not give employees less vacation time and then just continue paying them during the shut down? There is at least one company I know of locally here in FL that does it - Sea Ray Boats. They shut down production sometime in July for a week and then for the week at Christmas. They pay those weeks as if the employees worked 40 hours. Each employee gets 2 or 3 "personal" days that they can use throughout the year.

That schedule would be terrible for me personally but the longtimers at Sea Ray love it, they have excellent other benefits and pay well for the area.

Carey · June 2004

FYI - in CA you'd have to give 9 months notice that employees must use their vacation time during a shut-down. Presumably this is to give them enough time to plan their other vacation plans if they want to be paid during the shut-down. I would certainly want to give sufficient notice for this reason, and putting a policy in place would do that (for next year).

jake48 · June 2004

Irrespective of whether or not it is legal in your state, FORCING employees to utilize vacation during an employer mandated shutdown is a horrible employee relations decision. How do you explain it to a production worker who has saved for 2 years to take the spouse on an anniversary trip in February and you've now forced them to use their vacation?

It's actions like this that may very well result in your next post describing your company as one with a collective bargaining agreement rather than non-union.

There's the legal test and the newspaper test. I would submit that if you do this and it bacame the subject of a front page article in your local paper...you'd lose in the court of public opinion.

Whatever · June 2004

We close the New York plant for one week (Christmas/New Year's) and the NJ plant for two weeks (first week of July, Christmas/New Years) every year per the union contract and this time is counted toward vacation time. It is not a problem. Everyone knows about it. I understand that when it was first implemented, it was started in the second year of the contract.

Required to use vacation time during shut down?

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