"use it or lose it" policy

[Guest larrydean]

We are a small business in Colorado with approximately 25 employees. Our current policy for vacation involves a monthly accrual commencing upon date of hire. Vacation can then be used after three months. Any unused vacation upon anniversary date is lost. We do not compensate the employee for unused time. As I stated earlier we are a small business and do not have a human resources employee. I know there are better policies out there and I am looking at making a few suggestions for the new year. However I want to make sure that our current plan is not violationg any state or federal labor laws. Thanks in advance for any help.

[Sheila K]

Larrydean:

Because vacation policies are totally at the discretion of the employer, I don't think that your current policy is a violation of any wage/hour or labor laws. Your employer is offering a vacation benefit with options that make it low-cost to them.

Some options that may be attractive to both employees and the company may include:

Allow vacation carry-over on an annual basis, rather than on anniversary dates. The amount of carryover can be limited to 1 or 2 weeks of vacation.

Sell back unused vacation at the end of the year, allowing a monetary benefit if the vacation time could not be scheduled during the year.

The main criteria is that the policy must apply equally to all employees, to avoid discrimination.

Good luck.

Sheila K.

[Note: This message was edited by Sheila K]

[Guest dgrossman]

We are a small business headquartered in Michigan (@50 employees) with a satellite office in California (@10 employees).

Our current policy for vacation provides a monthly accrual commencing upon date of hire. Vacation can be used immediately after employment commences.

Any unused vacation at the end of the calendar year is forfeited. We do not compensate the employee for unused time, unless employment terminates and the employee has unused accrued vacation time.

Our plan was established by our Michigan office, I want to ensure that the "use it or lose it" concept is not in violation of any California or Federal laws.

Thanks in advance for any help.

[Kirk Maldonado]

You cannot have a "use it or lose it" policy in California, unless you vacation benefits are funded through a trust subject to ERISA.

[Guest dgrossman]

What is the specific law governing this issue? I will need to notify my home office HR department of the specific wording of the law so we can adjust our policies accordingly.

Thanks

[Guest N Silverstein]

We are a small industrial distributor in St. Louis (approx. 65 ees). We are looking to initiate a new employee "paid time off" plan for employees to take "x" no. of days off in our fiscal year. They can use their time as sick time,personal time, vacation time, whatever they choose as long as they do not exceed their allotted no. of days. Days would be allocated by seniority. Can anyone provide guidelines to offer this type of program?

[Guest dgrossman]

What is the specific law governing the "use it or lose it" issue? I need to notify our HR department so they can modify our policies to reflect the fact that "use it or lose it" is prohibited in CA.

Thanks for your help,

[This message has been edited by dgrossman (edited 07-01-99).]

[Guest Darrell Stevenson]

I work for a Utah based company that has employees both in Utah and sales employees in nearly all other states. What is the specific law governing the "use it or loose it" issue?

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Darrell H. Stevenson

Natures' Way

Springville, UT. 84663