Reducing Benefits

franfields · July 2001

We are thinking of eliminating paying out 50% for personal time (sick and vacation) not taken at the end of the year. Any advice?

jbnunzio · July 2001

My initial thought would be that individuals will begin using the bank until it is depleted rather than lose the benefit of the partial payout. Also, what do you think that the effect on moral would be as a result of taking away the benefit? Do you have anything to introduce along with it that would counteract it's removal?

dhnyct · July 2001

We are considering introduction of options for excess PTO...50% payout at service anniversary date or transfer excess hours to a short term disability account.

What has caused your company to consider discontinuing the benefit?

Terri · October 2001

Yes. The plan is to give the employees short term disability at the Company's expense. First day accident, 8th day illness.

Don Avery · July 2001

See answere given to the same question under the Wage & Hour thread.

franfields · July 2001

We allow the employees to move remaining days to a STD bank which can be used for any event that would qualify under FMLA. They may also carryover the days but they must be used by March 1 or lost.

Our problem is that with only 110 employees and at a rate of 50%, we still ended up paying out over $40,000.

dhnyct · July 2001

Do I understand that allowing cashout of the STD hours cost your company $40,000? Why would STD hours fall under "use is or lose it"? One policy area we are still discussing is what to do with any STD hours upon termination, whether to allow cashout or forfeit.

franfields · July 2001

The $40k was pay out on unused PTO (personal time off)at the end of the year. They have 3 options: carryover but use by March 1, roll over to STD bank, cash out at 50%. We do not allow cash out of STD.

Paul · July 2001

We have a "use it or lose it" policy regarding vacation time and do not allow any "banking" of time. Although we initially meet with some resistance from prospective employees, we explain it by the fact that we want them to use the time and not cash it out or bank it. Time and time again, you will find that people who sell back or bank their time tend to burn out due to not taking the time off. They need to get away and relax and "get a life".

You may want to check with those people in the banking industry. They ususally have a required leave policy (i.e. full weeks off at a time) so that they can catch people "cooking the books". Just a suggestion.

We do allow people to bank up to 10 days of sick leave, but once that maximum is hit, they do not accrue any more.

franfields · October 2001

Allowing employees to bank the left over days has worked well for us. It has been used for maternity leave and by several employees after surgery. It is non-discriminatory and helps the family financially when there is an illness. There are conditions which must be met for it to be used. The illness/leave must qualify under FMLA.

Banking one or two days a year still allows enough time off to recharge one's batteries. We do not distinguish between vacation and sick days but give a pool of days to everyone to use at their discretion.

Terri · October 2001

Personal (sick and vacation) don't become a liability until it is used. Why would you want to pay off anything?

Paul · October 2001

This is sometimes used to try to encourage employees to save their sick leave, etc. rather than use it for minor illnesses, etc. Companies do this to help keep attendance and productivity up, avoiding scheduling problems, etc. while realizing that there will be a slight (50%) premium that they will have to pay out at the end of the year.

Believe me, there have been times when I would gladly have paid an extra 50% of a persons wage to have them at work on a given day rather than calling in sick.

By implementing this type of policy provision, the company can take control (albeit incremental) of this issue and try to steer the direction that people take regarding calling in sick.

Terri · October 2001

I agree with you. Let me tell you what is happening here. Our employees were hired with a defined benefit package which included sick time accrual of 1.85 hrs. per week (or 12 sick days/year). They were allowed to accumulate up to 1440 hours of sick time. Upon retirement or departure, they would be paid 1/2 for anything over 720 hours. This was a real good incentive. Especially if the employee belonged to the State's retirement system because upon retirement the employee would earn crediable service hours for any unpaid sick time by the company. The employees are going to lose this benefit effective Dec. 28th. Anyone that has over 480 hours will lose this time and not be allowed to accrue over this figure. For those employees who have over 720 hours, the company is going to pay them 1/4. For those who fall in between 480 and 720.........well, too bad.......you lose. How can you keep morale up with this type of action? I, personally, will lose 174 hours for being a good employee and staying at my desk over the years even though I could have stayed home. I am very disheartened as will be the other 26 employees once they are told.

Paul · October 2001

Is this policy cast in stone? If not change it. This sounds like a bureaucrat made this decision without talking to HR for advice/input. What HR might have suggested would be a program where any time over 480 gets put into a "Catastrophic Leave" pool that the employee can get into ONLY if they are out on FMLA, and it is forfeited if/when they leave the company.

This would have saved the company $$ by not having to pay back 25%, and the chances of an employee taking FMLA before they leave are pretty remote. I wish I had a better suggestion for you but this policy stinks. You may want to consider taking some efforts to communicate the rationale behind the policy to the employees (i.e. newsletter, small group meetings, etc.). By doing so, you may be able to avoid an uptick in your turnover rate due to this decision. In either event, good luck and let us all know how it turns out.

Terri · October 2001

I think your idea of a "Catastrophic Leave" pool is wonderful! Thank you so much. At least not all will be lost. Hopefully, they will see how much sense this would make in terms of employee morale as well as savings for the District.

Reducing Benefits

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