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Vacation Policy

BernadetteDBernadetteD 2 Posts
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Currently we have a vacation policy in which an ee has to use all his/her vac. days by the end of the year, or they will lose them. What I would like to know is, does anyone know where we would stand legally with this policy? For example, if an ee has 5 vac. days and doesn't use them by 12/31, we would erase the days from record, and start accruing vac. fresh as of 1/01. Is it legal to do this because technically the ee "earned" these days? Would the ee be able to take any action against us?
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  • 4 Comments sorted by Votes Date Added
  • Theresa Gegen TXTheresa Gegen TX 814 Posts
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    Whether or not this type of use it or lose it policy is legal depends on what state you are in. It is legal in Texas, but I know some other states do not allow it.

    One thing you can do, it tell the employees that they must have their vacation scheduled by date X (let's say, June 1st.). If they don't, the company will schedule it for them and they will take it when the company wants them to take it.

    Good Luck!
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  • SystemSystem 5,885 Posts
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    You might want to check with a state agency or a lawyer in your state.
    [url]http://www.hrhero.com/findanattorney.shtml[/url]

    James Sokolowski
    Senior Editor
    M. Lee Smith Publishers
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  • JanGJanG 11 Posts
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    We've had a use it or lose it policy for years and we have employees in about 14 states. Only in California did we have to have to modify the policy. At our firm, for California employees, if you have leftover vacation, you do not accrue additional vacation time during the next year until your vacation bank has been zeroed out. There may be other states like California that prohibit losing earned vacation time, so I agree with the previous comments about checking the state laws. We know that for us California is the only issue.

    We're in the process of switching to a PTO policy with a partial payout at the end of the year. Although it may get killed in committee the way its going......
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  • GillianGillian 885 Posts
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    Here you are - good news from California. If you do not allow additional accruals if the employee doesn't use what has already been accrued, you may be violating regulations if you haven't written the policy correctly. You need to establish a cap and state that no more will accrued beyond the cap. Further, the cap can't be just the amount of an annual accrual.

    Your proposed PTO won't be of any help. The State will view the entire thing the same way that vacation is viewed.
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