This week’s mid-week Independence Day holiday means many people with remaining vacation time might choose to take Friday as a vacation day. Still others might be wishing they had the accumulated vacation days to take off the day after the holiday. A new study by the Society for Human Resource Management shows a growing number of employers are giving their workers flexibility in an unexpected place: allowing employees to buy or sell their vacation time.
For some, selling vacation time puts more money in employees’ pockets to use as they like or even to be put toward paying for enhanced benefits — such as more company-provided life insurance. Despite the possible hassle and increased paperwork for employers, 9 percent of companies surveyed allowed workers to cash out unused vacation time while 5 percent allowed employees to “purchase” more time off, if they made the election to do so during their benefits sign-up period.
The first step for employers wanting to offer such a benefit typically is to first switch all vacation, holiday and sick time into one “Paid Time Off” (PTO) pool of days and money. By making that change of combining all time off into one plan, employers can more easily expand benefit programs into a collective rather than individual program so PTO can be donated to other employees, paid out in cash or some other scenario. About 52 percent of employers in the survey reported offering such plans.
Though the City of Ottawa hasn’t gone to a PTO plan, it does allow employees to donate unused sick leave to a sick leave bank so that others meeting minimum leave requirements can draw on the sick leave pool, if needed. This program allows employees with an abundance of sick leave to have an insurance policy of sorts, to donate sick time that they don’t expect to use for the benefit of others and, perhaps in the future to their own benefit since only those who have donated to the pool can draw upon it.
No doubt, employees’ schedules and points in their life would impact their usage of such programs because extra time might be desired for expected and unexpected significant events in family life.
As the economy strengthens, employers might need to offer more flexibility with benefits to attract and retain the best employees. The ability to declare independence from rigid benefit programs might prove liberating for even more employees.
— Jeanny Sharp,
editor and publisher