A question about paid time off

[Alkali Ike]

I’ve worked for companies that required you to take the time off. That was in California. Oregon employers had a use it or lose it policy. Policy must vary by state?

No idea how the bookkeeping works. Seems like in use it or lose it, accrued time would be a liability on the books until it gets used. If it’s “you lose it” it must go away somehow via an accounting trick.

 

[the_home]

That's it exactly--in a very simplified and distilled manner. Basically, the "time" owed to you, in the form of paid time off (because time is money), is viewed as a liability for tax purposes.

Not only viewed as a liability, but booked on financial records as such. Not 'expensing' the accrued time off will require a bookkeeper/account at the business to make a number of journal adjustments at year's end. So... Not taking vacation does indeed make more work for someone else.

 

[ZenG]

Is there some way you can wangle yourself onto "paid administrative leave" ? Best of both worlds.

 

[slobake]

I worked for a company that forced everyone to use their vacation time for the three days before Thanksgiving. At that company you allowed to keep your earned time off up to 120 hours. After that you would stop accumulating days off.
A lot of people had quite a bit of time off coming and they wanted to get that off of the books. There was a negative financial impact for the company to hold all that time off but I am not clear exactly what that was.

 

[fdeck]

I'm not an accountant, but as I understand things, accrued PTO balance is counted as a liability on the books. If you erase it, then it looks like the company's bottom line has suddenly improved. This can only be done once, because in subsequent years, any liability that is accumulated during the year but erased at end of year. Some folks refer to this as a "one time accounting gimmick." The company does gain because it got to post better results for one year.

So I'd say, take the time off, since it's your reward for letting the company add a few dollars to its bottom line.

 

[tlc1976]

My company used to buy back any unused vacation on 12/31.

They switched to 'use it or lose it' a few years back.

Ours used to pay out unused PTO at the end of the year. The stopped doing that something like 5-10 years ago. They tell you to use it, but run the place so close to the bone that they often deny it. I was lucky to have been able to take the trip to Idaho, I've been there 19 years, but I got denied spring break with my daughter and countless other times. My boss said he finally was allowed a week off after 27 years.

There is something liberating about dealing with the fact that your company or institution won't crumble into a pile of rubble if you aren't there. You might be good. You might be needed. But NOBODY is irreplaceable. Suck up any 100 people on the planet into a black hole, no matter how important they are, and the world will keep right on turning.

Depends on where you are IMO. Around here, the saying "half the pay for a view of the bay" is very real. It's everywhere around here, trying to replace people is near impossible. They try to follow rules and terminate guys for being drunk on the job, etc. then just end up hiring them back because nobody else will work for what they want to pay. My friend quit a car dealer/service shop for a better job, and their response was to just give him a bunch of stuff out of the shop, and close up shop because there was no way they'd find someone to replace him. That was a few years ago and the place still sits vacant. This seems to be the norm here.

I liked the policy at the last company I worked for. At your seniority date, they gave you a check for your earned vacation time. You were free to do whatever you wanted with it. On the flip side, any day you took off you didn't get paid for. So it was up to you to budget it if you had to. But you always got what you earned. It was also easier for the company since it was spread throughout the year, not one massive payout at New Years. That was a high end engineering company with 50 of the smartest and most honest folks I ever worked with, I miss that place. But they closed up too.

 

[ONYX]

Not only viewed as a liability, but booked on financial records as such. Not 'expensing' the accrued time off will require a bookkeeper/account at the business to make a number of journal adjustments at year's end. So... Not taking vacation does indeed make more work for someone else.

......And they take it very seriously. This year, we were told that if our accrued time was not 40 hours or less by COB 12-31-2017, not only would you lose the PTO, you would also face disciplinary action--up to and including termination. Apparently, there are some people who work here who don't believe in taking time off---I don't have that problem--I usually carry over 0-10 hours every year, so I never get the threatening letters from HR.

 

[two fingers]

I worked for a company that forced everyone to use their vacation time for the three days before Thanksgiving. At that company you allowed to keep your earned time off up to 120 hours. After that you would stop accumulating days off.
A lot of people had quite a bit of time off coming and they wanted to get that off of the books. There was a negative financial impact for the company to hold all that time off but I am not clear exactly what that was.

I have never looked at the policy closely, but my company must have a good one. I take a day here and there all the time. I take three weeks a year off. I have been here less than three years, have taken 7 or 8 weeks off and plenty of single days here and there, and have 187 accumulated hours.....or almost 19 days.....which is still almost 4 more weeks.

 

[Aberdumbie]

Gorn.... Labor laws differ from state to state. Every business views paid time off differently and spend a lot of cash with legal types to insure they comply. Typically the issue is with employees wanting more time than the company is willing to pay for. In my business I figure a producing salesman has the capacity to earn XXX dollars in a typical day. The XXX figure is a small portion of what I will pay him if he takes an earned day off. I pay my producing staff double at the end of the year for any days they did not use. I live in a "right to work" state and we don't have the pressures of labor unions and such. Like I said, labor laws are different from state to state, but I cannot see any negative impact on the employers side unless it relates to union issues and I can't speak to those.

 

[yodedude2]

^^ perhaps it has to do with what legally construes a 'benefit' and how it is applied to employees.

 

[devo_stevo]

I've learned things here today. I'm glad I'm not in HR or accounting.

Apparently different states have different rules about this. It probably also depends on the size of the company (maybe. Don't know for sure about this one) and whether or not they have an employee manual that clearly points all this stuff out.

 

[DirtDog]

Depends on the contract, I would think. My contract allows me to carry over vacation leave (to a fixed amount before burning the leave or cashing out) and bank my sick time without limit. My wifes contract has specific vacation days (she’s a teacher) and cannot carry over sick leave. I know of one local contract that if you burn all your sick days, you get two extra days - a non-performance award!

Whether it costs your employer fiscally depends on whether they need to backfill your position while you’re away (vacation, sick, training etc), usually by calling someone in on overtime. This can get quite expensive, like up to 25% of an FTE’s salary for each position per year! If you don’t get back filled, it’s more an opportunity cost or loss of efficiency as opposed to a fiscal impact for the employer.