Convert vacation/sick benefits from anniversary to Calendar year.
hulawho
8 Posts
What is the best way to convert vacation/sick benefits from an anniversary date to a calendar year accrual? All employees earn 2 weeks of vacation at their 1 year anniversary, and 3 days of sick. However, for simplicity purposes we don't want to track anniversary dates on an on-going basis so we want all employees to start January 1st with their earned vacation days. Does anybody out there handle their vacation/sick benefits this way, and can you give me some guidelines on how to handle it?
Thank you.
Donna
Comments
We do and actually it is rather simple.
When we have a new hire, I prorate the amount of vacation/sick time available through the end of the current year. Then at the beginning of the next year, everyone starts with a new (full) balance for the year. We don't really accrue throughout the year.
If a person terminates, I have our policy written (allowable in Texas) such that I calculated the prorated earned amount, subtract any used vacation and payout the difference. If the difference is negative, our company writes it off. We DO NOT go back and try to get the negative balance back from the employee. You can do so, but in most states, you need to have a deduction authorization in writing signed prior to using the negative time.
To convert a whole group at once, you have to pick a date to do so. The first year is usually very weird but then stabilizes after that. One big question is do you still want to pay them after they completed the year or at the beginning of the year? You will really only have two groups to decide about...those that have completed their first year and those that have not.
If it is after they have completed the year, then I would calculate as the example below...hire date 9/30/07 so get 2 weeks at 9/30/08. I would give that employee 2 weeks plus a prorated amount for 10/1-12/31 to use in 2009 minus anything already used since 9/30/08. If they have not completed the a year, hired 4/5/08 for example, I would take their anniversary date which is 4/5/2009 and prorate that through the rest of 2009 and give that at the beginning of 2009 OR still give at the 1st anniversary but prorate from then to the end of the year to move them onto a calendar year after 1 year of service....does that make sense?
We made the conversion last year. What we did was prorate everything. On your 1 year anniversary until the end of the calendar year that employee would have a prorated number of days of vacation to use or lose by Dec. 31. Then they start over on Jan. 1.
We don't have sick time - we just have PTO or Paid Time Off - in this bank is our vacation, sick and also if the employees meet certain production goals they earn more vacation time - so we just keep it in the same bank with the same rules so it's less trouble and there are not HIPPA issues.
Just as an FYI - We have found more difficulty with the calendar year vacation because employees tend to feel a little jipped out of vacation time (even though the math is there, the feelings don't always match up), it's more work for me to keep up with the math of it (especially because there is a different amount of vacation per years of service), and everyone tends to save vacation, for those just in case times, and then everyone wants to take it in December and we have trouble covering everyone.
Good luck with your conversion!