vacation tracking

[Elena Tchernycheva]

#94292

Forum: Private

Currently we track vacations in $ amounts (linked to vac pay accrued). How can we move to tracking vacations in days? Any tools/ resources will be helpful.
Thank you,

[rickt@bongarde.com]

#94298

Hi,

A lot of payroll solutions offer vacation tracking as a part of their solution sets. I don’t know if you are using one, but that would be my recommended first step if you are. If you’re looking for a simple and easy to get into solution, Humi is what we use internally. Otherwise, a simple spreadsheet template is really all you need to do. 4% is usually 2 weeks, 6% is 3, and every 2% is roughly another week’s time allotment, so you want to make sure that whatever you are deducting is the equivalent. If you are moving to a pure PTO model and not deducting anything, you don’t have to worry because for payroll purposes you would treat the employees like they were on salaries instead of hourly. Again, I don’t know how you are currently organized.

However, there are some things to consider.

First, you need to give “reasonable notice” of this change and you will need to shore up the banked vacation pay with a payout, if necessary, so that everyone is on an even starting point. For example, if on Jan 1 (the day your transition), Tim has any surplus in his vacation pay bank, he would need to be paid out and start taking his two week’s as of that year. If, however, you have an employee start mid year, they would have a prorated allotment of days, unless it was negotiated otherwise in their contract.

Second, and tied to the first, you can implement a use it or lose it for time (encouraging everyone to take their holidays throughout the year), but you can’t have a use it or lose it for the money. So if you make this transition, and at the end of the year Tim uses only 1 week of his 2 week allotment, you can either pay him out for the unused vacation (if you have been taking weekly deductions or not) or allow him to rollover the time, which could mean Tim’s salary is a little higher in that year because he legally worked an extra week than contracted to. For this reason, a lot of companies opt for taking the vacation deduction so they can have a cash reserve, but choose to just manage the time aspect because they run lean or have high turnover – I don’t know the nature of your business, but that is something you should consider.

Last piece of advice, because you are required to give “reasonable notice” of this pending change, which is a very gray legal term, in the case of salary changes, I would always opt for as much as possible, with a minimum of 30-60 days. Overcommunicate. Use every channel possible. Email Tim, have a lunch and learn, grab Tim in the hall, post a notice on the wall, include a flyer with Tim’s paystub, put a post-it on Tim’s monitor, do everything including screaming from mountaintops. Salary adjustments, even something minor as moving from pay to time, are very affective on certain employees, who will likely feel like they somehow are losing money or vacation time. Be transparant about your reasons, illustrate how easy it is for them to manage, and express that you want employees to take vacations so they can recharge, refocus, and do their best work… just don’t take their vacations all at once.

I hope this helps, if not, please let me know what more I can do to help you in this transition.

HR Insider Staff

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