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Change Vacation Award Date

Our vacation is currently awarded on 6/1 and goes through 5/31 of the following year. We want to change our vacation to anniversary date as of the first of the year. Any suggestions?

Planning ahead and providing advance notice is essential in avoiding headaches when altering vacation policies.

The first step is to write a clear, easily understood policy. This should be fairly easy in this situation since it appears only the award date is changing. Nonetheless, the policy should include employee eligibility, amount of time provided, additional time awarded for seniority or certain job categories, when time is awarded, accrual maximums, if applicable, and payout guidelines. Be as clear as possible to avoid any confusion by employees.

In order to be fair to all employees, it must be determined how employees will be affected by the new policy and prorate employee accrual rates for the first year. For the sake of providing an example of prorating time let’s assume employees received 80 hours of vacation time per year on June 1st and the effective date for the transition to a calendar year award system is January 1, 2015.

So, employees received 80 hours of vacation June 1st. It wouldn’t make sense for them to receive another full 80 hours on January 1st. Thus, the accrual amount must be prorated. An employee receiving 80 vacation hours per year accrues 1.54 hours per week. Since the 80 hours covers them from June 1, 2014 to May 31, 2015, it must be determined how much more PTO they should receive for the remainder of the year (June – December 2015). Employees would receive 31 weeks worth of accruals or 47.74 hours on January 1st. (31 weeks x 1.54 hours accrued per week = 47.74 hours). This award will cover them until December 31, 2015. Starting January 1, 2016 the full vacation time would be awarded per the new policy.

If the vacation policy implements maximum vacation accrual/rollover make sure it’s determined how each employee will be affected during the transition year. It wouldn’t be fair for employees not to receive their full allotment solely because of the transition to a new policy. Determining how each employee will be affected before the policy is implemented is a proactive approach to forecasting potential issues. Also, it’s best to be prepared to answer employee questions about the calculations once the new policy is disseminated.

Once a policy is finalized and the calculations are complete a notice should be sent to all staff informing them of the new policy, effective date and summary of how the transition will be managed. Some employers also offer question/answer meetings so employee concerns can be addressed. Be prepared for employees to question the policy. Vacation time is considered a top benefit for many employees; so, expect some moans and groans. However, communicating essential information to employees well in advance and hearing their concerns will help for a smooth transition.


This entry was posted on Thursday, June 26th, 2014 at 12:43 pm and is filed under
Benefits, Human Resources Management.
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