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Oct15

Transitioning from calendar date to anniversary date

Hi there, our company is transitioning vacation leave from calendar date to anniversary date. How do I keep it fair for the employees and make sure they don’t “loose” any days during the transition?

Ensuring employees are treated fairly when transitioning vacation policies is a common concern. In this case, determine how much vacation time the employees would normally accrue from January 1st to each of their anniversary dates. That time should be awarded to them on January 1, 2015. Then award each employee their full vacation allotment on their anniversary dates which will cover them for their anniversary year. This ensures employees who have anniversary dates later in the year are not losing time during the transition year. If you’re using an accrual method instead of a lump sum just base the accruals on the total amount of time normally awarded.

Here are some examples:

Jane has an anniversary date of January 9th. She was awarded 80 hours vacation time on January 1, 2014. An employee receiving 80 vacation hours per year accrues 1.54 hours per week. Thus, she would accrue 1.54 hours from January 1st to January 9th. This time should be awarded to her on January 1, 2015. On January 9, 2015, Jane’s vacation year would start fresh.

Dave has an anniversary date of October 25th. He was awarded 80 hours vacation time on January 1, 2014. Dave would accrue 64.68 vacation hours from January 1, 2015 to October 25, 2015 (1.54 hours x 42 weeks = 64.68). This time can either be awarded as a lump sum on January 1, 2015 or a time accrual method with rollover can be used as long as Dave receives the full 64.68 hours by October 25th. On October 25, 2015, his vacation year would start fresh.

These calculations must be done for each employee. Rounding for accrued time/weeks is acceptable. However, a clear rounding policy must be established and uniformly applied to each employee. Be proactive about addressing any potential issues before they arise. This will pay off in the long run.

As with any new policy, make sure revisions are clear and easily understood. Inform staff of the changes as soon as possible. Since vacation time is an important benefit to employees, expect a little backlash and lots of questions. Being prepared and addressing employee concerns confidently will ease the transition.

This entry was posted on Wednesday, October 15th, 2014 at 10:33 am and is filed under
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2 Responses to “Transitioning from calendar date to anniversary date”

  1. Chuck Says:

    We are transitioning to a calendar year from anniversary with transition to be complete by Jan 1 2017. For new hires, we allot 40 hours annually for the first two years, and require them wait one year to take vacation. If I hire someone April 5, 2015, they will earn 30 hours through Dec 31, 2015 (39 weeks X .77). Since they are not eligible to take vacation till April 5, 2016, is it appropriate to award the 30 hours January 1, 2016, not allow them to take till April 5, 2016 and then start them at the full 40 hours on Jan 1, 2017? Would this then be the standard practice for new hires going forward? Thanks.

  2. hrlady Says:

    Hi Chuck,
    I’ve seen this scenario played out a few different ways.
    1. Award the prorated 30 hours on the employee’s hire date even though he’s not able to take vacation for another year. The employee would then receive 40 hours on January 1, 2015, again with the understanding he cannot actually use his time until his anniversary date;
    2. Award the 30 hours for the new hire year plus 40 hours for the coming year on January 1, 2016, again with the understanding he cannot take vacation until April 5th; or
    3. Award the full 70 hours, 30 hours for the prorated new hire year plus 40 hours for the 2015 calendar year, on their anniversary date.
    Any method is acceptable as long as it is clearly explained and documented. The best method for your company depends on who is responsible for updating vacation entitlements. There is less administrative burden to award the appropriate hours on the employee’s hire date and then the first of the year thereafter. However, it’s then up to the employee’s manager (or whoever manages vacation usage) to ensure vacation time is not actually used until April 5, 2016. Conversely, it may be less confusing to the employee to simply award the full entitlement of 70 hours on the anniversary date. However, it’s then up to HR/Payroll to remember to award the appropriate amount. HTH!

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