Vacation Accrual

[Guest Msharp]

Does anyone have any helpful information on a formula fcr changing the vacation accrual date from anniversary date to the first of the fiscal year?

[masteff]

Guess we'd need to know more about what type of formula your looking for (the phrase can mean different things to different people, so a clearer idea of what you're looking for).

At my last employer, in our HR system, employees had several dates recorded. One was hire date. Another was vacation date. Typically, vacation date would be 1/1 of the year of hire. So if you have a policy of, for example, 2 weeks of vacation after 1 year of service, then on 1/1 of the following year, the employee would be credited w/ the 2 weeks. One benefit of recording vacation date as it's own separate date is it made it easy to adjust for people who negotiated for extra years toward vacation when they were hired.

Maybe you could expand on what part of the process you're having trouble with / need more info about.

[J Simmons]

What I've seen will take a year to implement. From the first day of the next fiscal year, continue to credit each employee his/her vacation on his or her anniversary date. But then, on the first day of the next fiscal year, credit everyone with a proportion. For example, if the fiscal years begin July 1, then finish out this fiscal year as you have in the past. Beginning July 1, 2008, notify everyone that they will get their full annual accrual on their next anniversary date but then on July 1, 2009, they will get a proportion of the annual vacation accrual measured by the days from their anniversary during July 1, 2008-June 30, 2009 until July 1, 2009, divided by 365. After that, everyone's annual vacation accrual will be the first day of fiscal years.

[Guest Msharp]

Thanks for the reply, J simmons had the senerio correct, but I don't think we have a year to implement--I'm getting lost in the details, but i appreciate the suggestion and will be thinking about how we can implement this sugestion.

[masteff]

Ah, I see the issue now. I guess one question would be whether you allow people to bank vacation or if it expires. I'm used to it expiring so I have to shift my frame of reference.

You could do it faster than a year. It just would be much more abrupt to the employees. Just move what J Simmons said above up a year. On July 1 2008, credit employees w/ the vacation accrued since their last anniversary date. Then on July 1, 2009, credit them w/ 1 year. So for example, John Doe who's anniverary date is 5/1 will receive a full year on 5/1/08 and then on 7/1/08 he'll receive an extra 2/12ths.

The person who will be mad because he didn't have a full year notice will be the guy hired on 1/1 who used up his two weeks at spring break and only gets 6/12ths on 7/1/08 and has to wait a full year before he gets more.

If you had a non-carryover plan, you'd just expire any unused days on 6/30/08 and issue a full year on 7/1.

[J Simmons]

Your state law on vacation pay should be reviewed, and you might be able to do that with just advance notice before the moved 'up a year' approach Masteff suggests.

My experience is that employees plan their vacations months, some even years, in advance and you may be having some with insufficient accrual (e.g., an employee was planning a vacation that would fall after his/her anniversary date (and accrual dump) but before what would be the first day of the next fiscal year beginning after that. If you move 'up a year' the approach I outlined, you might need to be prepared to 'advance' employees some vacation accrual during the year of transitioning to the new accrual date to avoid employee pushback.

[Guest Msharp]

Thank you for the reply, this was very helpful.

[Guest KAL]

Hello,

You must inform employees way in advance of such a change. Communication is critical. Obviously I need more information, but from the limited amount of information, you want to have employee's accrue their vacation on January 1 of every year. So if an employee is eligible for 3 weeks of vacation, they would accrue 1.25 days per month or 15 days eligible into 12 months to get 1.25. Do you they have to take their vacation in the same year? In other words use it or lose it? Depending on your vacation policy, employees would have to be notified that on January 1 of every year determination will be made if they hit a service date mile stone and if during that year they do and they would receive an additional week.

So if the person had 3 weeks of eligiblity, but on January 1 2009, they are now eligible for 4 weeks, they would accrue 1.66 days per month. The formula in my opinion is easy, but the communication is important and work with your Finance department to see what the vacation accrual costs will be as well.

Again, not sure of your policy, have attached one.

MASTER___Vacation_Guidelines_w.o_Logo.doc