Employer Challenges with Employee unused vacation?
So here we are as 2020 comes to a close and while employers have always had to face issues about how to handle employee unused vacation (or PTO), the circumstances this year may truly be unique. Some employers may have some employees that had their vacations cancelled or postponed due to COVID-19 so they now have extra days because a reschedule never got on the books in 2020. In fact, some employers may have employees that never put in for vacation because they kept putting off taking time thinking normal would return this year, they were fearful of losing their job due to economic issues with the company or layoffs, or they simply did not have anywhere to go. Employees maybe scrambling to all take time off at the same time before they “lose” their vacation at year end so an employer is dealing with competing requests.
As employers determine how to handle these issues, they may want to consider the following:
Records - Employers may want to go ahead and pull out the records and look at whether or not your workforce actually used their vacation/PTO this year. This maybe a non-issue if everyone found time and used it. So the first step should be to educate whether or not this is an issue for your workforce. Consider talking to your managers to understand what feedback, if any, you have heard on this issue.
Beware changing or adding Carryover without Clear Guidelines - Some employers maybe considering allowing employees to carryover vacation (PTO) due to the circumstances of 2020 or to expand the carryover policy they currently have so that employees can save some of their vacation time from 2020 to apply towards 2021. Employers should be thoughtful in how they do this and build out the parameters because all that extra carryover can cause financial issues for the company or strain on the managers as they sort through the expanded amount of leave. Further, if this is a one-time exception, then make it clear in writing to employees so they do not expect this every year.
“Use it or Lose it” Policies - Clear communication about “use it or lose it” policies can help clarify to employees what to expect regarding their unused vacation. If you are not going to be honoring any unused vacation carryover from 2020, some employers may want to explore paying out a small portion of unused vacation as a bonus or providing an extra day or more of vacation/PTO for 2021 to cushion the loss without actually changing policy. Further, as stated in the previous point, if this is a one-time exception, then make it clear in writing to employees so they do not expect this every year. Note #8 below, some states do not allow for a use it or lose it policy so keep that in mind.
Requests for Vacation should be Consistent - You should lean more towards having a clear form to guide requests for vacation/PTO. It can be confusing to the whole team when one employee texts the manager and another sends an email and another simply requests the time off in a face-to-face meeting. These are ways that have requests fall through the cracks or cause issues with resentment or feelings of favoritism about who requested what first. Leaning towards a formal policy actually helps everyone know the proper steps to get time off and can eliminate resentment when management has to deny a request for vacation due to there being too many employees requesting the same time off.
Vacation Calendar - This maybe a useful tool for all the employees to have access to in their departments so then can see and plan around other individuals who are already taking time off.
Turn Around Response - Try to develop a consistent way to respond to requests and if possible a timing to the response. An employee maybe waiting to book travel plans or make arrangements with family so the Employer should have a consistent approach to responding to employees so the employee can know what to expect as far as approval or denial.
Communication - If you do not have a clear way to handle competing time off requests, then consider supplementing your policy and circulating this information to the employees ahead of such issues.
Educate yourself on State and local laws on vacation and PTO so that you avoid any hiccups if you are attempting to change policy or to establish a new vacation or PTO policy.
Considering these issues above, employers may find it useful to approve smaller amounts of time off to allow everyone to take some time here at the end of 2020. Either way, tread lightly on how to approach these issues as tensions maybe high among employees due to the stress of this year. Balancing this with practical issues such as company finances and attendance needs should all be taken into consideration as an employer decides how to handle these vacation and PTO issues.