Why would a company not want you to carry over vacation?

[Pakey]

I'm a CFO in a large company (and we don't like being called bean counters) and not only is the liability for employee benefits on the balance sheet something that companies find undesirable, there are also tax implications for accrued benefits and the timeframe between when the benefits are accrued and when they are taken. To be able to carry over accrued vacation for extended periods of time causes a lot more work for the accounting department.

Where I live, the use it or lose it thought process is illegal. You cannot lose benefits that you have already accrued. In reality what is done, is if you reach a maximum of accrued benefits (say 3 weeks) you do not earn anymore until you have used enough of your accrued benefits to begin earning again. OP, this is why the company is giving you notice that you have a deadline to use earned benefits; they cannot just take it away from you without giving you the opportunity to use it. Going forward, I'm sure it will be that you'll have a maximum that you'll be allowed to accrue rather than use it or lose it.

I can't believe any company of size would have no record of accrued benefits. If an employee were to leave and dispute the amount of paid benefits upon termination, the employer would have to provide records of how the vacation was accrued and used. It costs nothing for an employee to file a claim with their state's labor board and they would easily win if no records could be obtained. We have the benefit accruals print on each paystub so the employees always know what their balances are.

 

[Kimberle]

Legally (Accounting wise) the company would have to "carry" it on their books as a liability. Most companies can't afford to do this.

 

[brerrabbit]

I have dealt with this issue on a couple of occasions and can give you several real world examples of why companiys make these policies. Most companies (if they do their accounting correctly) accrue employees vacation time. Some companies accrue it with one entry at the beginning of the year, while some acrue it monthly. If they do it at the beginning of the year then they take a big financial hit as the cost of the vacation (hours x pay rate for every employee all added up). Even though you work for a company that you think does not accrue these costs they probably do. If they have no official policy for vacation (which I bet they do even if you have not seen them) then they are leaving themselves open with so pretty significant financial liabilities. If you work there for 20 years and never take all your vacation but keep very good records then at the end of your career you could make a case that you are owed the money. Lack of an official policy would not stand up in court and they could very well be ordered to pay out the back vacation pay. The other thing that comes up is that that vacation pay can really add up as your salary increases because what you have left in the end is the sum of all you didn't use but if you rolled some, and banked some etc. then in the end you can't tell one hour from another. That means they would have to pay for all unused vacation at the last pay rate which means an hour of time from twenty years ago when you were payed at $5 an hour would have to be payed at your current salary which is probably much higher.

Several years ago the Fire Chief in the City of Houston decided to retire after 45 years on the job. Firemaen and Police accumulate sick leave and vacation over their career. This guy went straight from high school to the fire academy and worked his way up to Chief. When he retired they had no good records of what rate he had accrued the hours at and were forced to pay out over two years of accumulated time at his last pay grade which was Chief and close to $200k a year. The city took a huge hit on that one.

In my current job we can roll as much as we get in a year but it has to be used in the year it is rolled into. I get three weeks (increasing to four next January) and have been taking three and rolling three for several years. That way I start every year with six. It is a clearly defined policy and we have to stick to it.

 

[SandrA9810]

Yeah, but it's also good for you as an employee to take your vacation time, so you are away from the working world, even for two weeks a year. It's healthier and less stressfull for you, which helps in the medical benefits part.

I talked with some one from Europe and they say they get like a whole month each year, and that they have to take time off.

My aunt was a work-a-holic and worked an insane amount of time at her job and never took vacation time. So she a was much more stressed out than any one else there.


As for me, I didn't have much of a choice to roll over my vacation days because I earned more than Kari. So here and there I would take a day off just so I wouldn't have like 3 or 4 weeks more than Kari's available time off. But when I was let go from the company I got a nice size check from my vacation time and sick time accrued.

 

[WaltD4Me]

I manage a small company of 60 employees and we don't allow employees to carry over vacation so we can keep vacation time balanced. The hours people are on vacation have to be covered, so if enough employees carry over vacation time it could easily become way too difficult to cover all the vacation time hours. We know we have to cover so many weeks per year and can plan accordingly.

 

[goofyernmost]

As mentioned there are many reasons why companies don't allow you to carry over vacation.

One of the biggy's is that they really want you to take time off. Everyone needs to be renewed. Get away, relax and come back refreshed and ready to go. That's the personal side.

The financial side differs depending on whether your time has to be covered by someone else or not. If one is trying to work within a budget they must know what they will be paying out at any given time. Vacation time is handled differently everywhere. Some places don't require you to take it but will pay you for the time. That gets very costly because the effectively increases your pay for the amount of time they owe you. That might be cheaper for them if it costs them overtime to cover your position to just pay you off. Most adapt the use it or lose it system to keep costs within control. One has to remember that benefits are things given by companies, they are not necessarily considered earnings. You really cannot earn a vacation, but you can be awarded one. No company is compelled, by law, to give vacation time, holiday time or sick time. It is strictly voluntary. The only law is minimum wage and time and a half for over 40 hours. Even that is defined under exempt or non-exempt status.

 

[manning]

I'm a CFO in a large company (and we don't like being called bean counters) and not only is the liability for employee benefits on the balance sheet something that companies find undesirable, there are also tax implications for accrued benefits and the timeframe between when the benefits are accrued and when they are taken. To be able to carry over accrued vacation for extended periods of time causes a lot more work for the accounting department.

Where I live, the use it or lose it thought process is illegal. You cannot lose benefits that you have already accrued. In reality what is done, is if you reach a maximum of accrued benefits (say 3 weeks) you do not earn anymore until you have used enough of your accrued benefits to begin earning again. OP, this is why the company is giving you notice that you have a deadline to use earned benefits; they cannot just take it away from you without giving you the opportunity to use it. Going forward, I'm sure it will be that you'll have a maximum that you'll be allowed to accrue rather than use it or lose it.

I can't believe any company of size would have no record of accrued benefits. If an employee were to leave and dispute the amount of paid benefits upon termination, the employer would have to provide records of how the vacation was accrued and used. It costs nothing for an employee to file a claim with their state's labor board and they would easily win if no records could be obtained. We have the benefit accruals print on each paystub so the employees always know what their balances are.

Been a long time, but if I recall if the vacation time is not used the company loses tax write off on federal taxes.

 

[bettyann29]

in past we were able to carry over up to 5 days.. they decided this year that we can no longer carry over any days.. any days not used will be lost..

I get 3 weeks and 3 days now and I actually normally use mine up due to the last few years either myself or a family member having surgery so I have taken days off for that, but even if I didnt have that I would be easily be able to use my days..
DH gets alot of days off every year and they are able to carry over 5 and he always does.. anything left after that can be donated and put into a bank to be used by employees that need additional days due to extenuating circumstances, such as a sick spouse, child, etc.. not just regular sick but say a wife has cancer and the husband has to continually take off to take her for treatment, then they can request additional days if theirs are all gone.. they go in front of a committee for approval.. or DH can put the days in his extended illness bank so if he is off for an extended time due to illness, injury, spouse ill, etc.. he will have days if he uses all his vacation days.. DH has so many days in there that he decided to donate his leftover days this past year so someone else can use them..

 

[tennvalgirl]

I manage a small company of 60 employees and we don't allow employees to carry over vacation so we can keep vacation time balanced. The hours people are on vacation have to be covered, so if enough employees carry over vacation time it could easily become way too difficult to cover all the vacation time hours. We know we have to cover so many weeks per year and can plan accordingly.

I just wanted to say that I love your avatar!

 

[dbarker]

But what I'm saying is that it isn't in the books. There isn't any form we fill out when we take vacation and there isn't any record of how much vacation time we have at any particular time. Although it's possible that I misunderstood and that information is tracked, they just don't do it on a real time basis. Maybe each department manager is supposed to provide that information to HR at the end of the year or something and my manager was just slacking and not keeping up with tracking it.

As far as sick time, we don't have any set number of sick days and we don't have to use vacation. If we're sick, we just let the boss know.

Your boss may not be keeping track of your vacation time, but your HR / Payroll dept and Accounting dept are. Everyone's accrued vacation is given a value and kept up with in the accounting system, either through the payroll dept or by the CFO.

Keeping up with the vacation time is a payroll function. That is why some dept. managers do not know how much vacation time there is...it is not their (primary) job to keep up with it. Some dept managers however, will be more diligent about things like that than others.

 

[DarthKTrava]

My company never allowed vacation to rollover. And hourly employees have to take it by the week, managers get the option to take a day here, a day there, etc...

 

[HelenePA]

8am to 8pm with mandatory over time each week. its killing me. I have an hour ride there and home.. I have no life but the money is good. I need a new job.

 

[Disneybuckeye]

I have 19 people under me. I can tell you to the minute how much each person has used and what they have left. They are all hourly associates. I also gave them all calendars and told them to track their time also in case is discrepencies. We are use it or lose it except for up to 80 hours of sick that can roll over.

I also track my time and match with my boss. I have 5 weeks to use this year and will roll over 2 weeks of sick. Way too much money involved to not be on top of this.

 

[Allison]

8am to 8pm with mandatory over time each week. its killing me. I have an hour ride there and home.. I have no life but the money is good. I need a new job.

Is this related to the thread from 2009? I think you may have meant to post on a different thread.

 

[NHdisneylover]

Yeah, but it's also good for you as an employee to take your vacation time, so you are away from the working world, even for two weeks a year. It's healthier and less stressfull for you, which helps in the medical benefits part.

I talked with some one from Europe and they say they get like a whole month each year, and that they have to take time off.

My aunt was a work-a-holic and worked an insane amount of time at her job and never took vacation time. So she a was much more stressed out than any one else there.


As for me, I didn't have much of a choice to roll over my vacation days because I earned more than Kari. So here and there I would take a day off just so I wouldn't have like 3 or 4 weeks more than Kari's available time off. But when I was let go from the company I got a nice size check from my vacation time and sick time accrued.

Yep--DH gets 30 days here in Germany (pretty typical, though only 20 are legally required nearly everyone gets 6 weeks). he can carry over no more than 5 and must use those in the first quarter of the following year. And it is MUST USE, not use it or lose it. (and I love it!)

 

[PollyannaMom]

If a company allowed unlimited weeks to be carried over, they could end up owing everyone a lot of vacation, come to the end of the year, and have them all off at once with no wiggle room.

 

[Patch'sD]

I still have my Carry-over from 2009.

 

[Kimberly9701]

We were just notified that our company has changed their policy and is no longer allowing employees to carry over any vacation.
I get 3 weeks a year and I right now, I've got 4 weeks that I'm going to have to use by the end of the year.
I was planning a 2 week WDW trip for next spring, thinking that I would be starting the year with at least 4 weeks of vacation. But now it looks like taking a 2 week trip in the spring would only leave me with 1 week for the rest of the year.

I'm puzzled, trying to figure out how it benefits the company to get rid of the carryover vacation.

So sorry to hear this!
Are they taking away the 1 week carry over you already have? If not, take advantage and book a trip for summer or fall 2016.

 

[okeydokey]

How big is the company? I am surprised there is no accounting of what employees earn or take for vacation.

We can carry over vacation, but only to a certain point. It gets paid out when you separate from the employment.

 

[Allons-y!]

I wonder if zombies can carry over their vacation?