Vacation carryover and accrual

OKStateHR

We are in the process of revising our employee handbook. We have allowed employees to carryover up to 1 week of vacation from a previous year. Now we are being told that is not legal. We have been told that we can not have a "use it or lose it" policy and that employees can carryover vacation but cannot accrue vacation until the previous year vacation has been used. I understand the use it or lose it portion, but if they have used everything but the 1 week, is this illegal. Under our current policy we e get 10 days of vacation a year upon our anniversary date.

Is it correct that this type of policy would be illegal or does it only pertain if you want to continue some type of use it or lose it policy?

Thanks!

Charlie Plumb OK

Provided your vacation policy expressly states vacation may not be carried-over from year to year or "cashed-out", the policy is lawful. As an alternative, you can have a "use it or lose it" policy that permits employees to request exceptions to the no carry-over rule, if they have been prevented from using accrued vacation before the year has ended. The key to enforcing such policies is the ability to refer to an explicit and clear policy or handbook distributed to employees explaining these rules.

I hope this information was helpful. If you have any other questions, feel free to contact me by telephone or e-mail.

Charlie Plumb
[email]cplumb@dsda.com[/email]
(918)591-5279

Margaret Morford

You need to check your state laws. Some states prohibit "use or lose" policies.

Margaret Morford
theHRedge
615-371-8200
[email]mmorford@mleesmith.com[/email]
[url]http://www.thehredge.net[/url]

Jeff

Where does one find a state's specific rulings regarding the legality of "use it or lose it" in regard to vacation time? Does it differ if it is "paid time off" - a combination of vacation / sick leave?

System

P.S.
Charlie is one of the Oklahoma attorneys who writes our [link:www.hrhero.com/okemp.shtml|Oklahoma Employment Law Letter].

Christy Reeder
Website Managing Editor
[url]www.HRhero.com[/url]

B_Jackson

It sound like your program is an allotment program, and not an accrual program. You give the employee ten days on their anniversary date, this is not earned time. You cannot take away earned time, but you can take back allotted time if it is stated properly in the policy.

OKStateHR

That is what we do. Each anniversary date we get all our days. What they are wanting to do is allow us to carry over a maximum of 5 days each year.

For example, if I have a total of 15 days vacation. I use 5 days and have 10 left at my anniversary date. They are wanting to allow us to carryover 5 days and lose 5 days.

Is this OK? Or does it have to be carryover all left or lose all left?

Thanks for all the input.