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No Accrual, No Pay
In Illinois:
We are on an anniversary vacation basis, not calendar year.
We've been lenient with staff, and paying out vacation time that is NOT yet accrued, but taken.
As of Jan 1, we want to begin enforcing the no accrual, no pay policy.....they can still take the approved time off, but it won't be paid.
Q - do we then have to (back) pay for that time when they have actually accrued it later in the year?
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Re: No Accrual, No Pay
No, and I wouldn't. Are you going to allow carryover this year?
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Re: No Accrual, No Pay
We haven't allowed carryover in the past, primarily because it's a nightmare to track. Unless you have a suggestion to allow it easily, we probably won't.
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Re: No Accrual, No Pay
Just saying that, if you are going to dock pay if an employee hasn't accrued enough time to cover, this is pretty late in the year to do make that decision; people may already have made plans to take XX days of vacation next year and may not have accrued enough at that time, but may have enough on the books if you don't wipe out what they have right now.
Do you pay out the balance at the end of the accrual year? Do they lose it if untaken at that point?
Do you use a payroll system to accrue and maintain the balances?
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Re: No Accrual, No Pay
First - I really appreciate your help with this.
As it relates to hourly ft staff: we won't 'dock' pay; we are considering not paying for their time off if they haven't accrued it; but will add it to their payroll in the month that they actually accrue the time.
Haven't decided what to do with the salaried staff. I really don't want to get into a 'docking' system.
Yes, it's a lose it or use it benefit. Our payroll system is set up to maintain the balances, but it's only as good as the information that's input....
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Re: No Accrual, No Pay
I wouldn't go back, period. If they want to take more vacation after they accrue enough, let them. I think going back and restoring pay after the fact would be more trouble than it is worth. I have managed large national payroll operations for a lot of years and I've never seen that done.
Again, what I would suggest, to soften the blow, is to let them carry over whatever they would have lost at year-end, this time only, as a transitional "benefit".
BTW, what you are proposing is a payroll best practice. You should never "advance" wages, which is what paying for vacation that hasn't yet been accrued really is.
May I ask what payroll system you use? (Asking in relation to your exempt salaried staff and how to process the docking.)
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Re: No Accrual, No Pay
Yes, the advance thing is bad news, I agree.
We are using the Evolution software from Pro Data.....I would NOT recommend it. We are currently reviewing the Ultipro software and may go back to ADP for a proposal.
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Re: No Accrual, No Pay
In all the systems I've used for years, if you configure it correctly, you can enter a pay code, negative hours, at it will automatically dock the salary based on the standard hourly rate you've set up the employee with. Ask them how it works in their system.