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Dear Workforce How Do You Accrue Vacation Time?

Accrual is typically done semi-annually or quarterly, although recently some companies are moving to monthly accruals as information systems allow efficient tracking on a more frequent basis.
March 7, 2001
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Related Topics: Benefit Design and Communication, Policies and Procedures, Dear Workforce
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QDearWorkforce:
 
    I need some advice on a good way to track vacation time for salaried employees.Our current policy gives a salaried employee 10 days peryear of vacation time for rest and relaxation. We currently do not have aprocess by which track how many days an employee has earned. Is there amethod we should be using?
    Right now we give our employees the option of taking days during their yearwhenever they want, but what happens when an employee leaves before his year isfinished?
-Stacey Bailey, HR director, Tampa, Florida
ADear Stacey:
    Companies handle this in a number of different ways, but an increasingly greaternumber of companies are reviewing their policies as turnover in the currentlabor market increases. By accruingvacation days, companies can calculate amounts to withhold for paid vacationtaken but not accrued when an employee terminates employment.
    Accrual is typically done semi-annually or quarterly, although recently somecompanies are moving to monthly accruals as information systems allow efficienttracking on a more frequent basis. Monthly accruals allow new hire employees to"earn" vacation more quickly, rather than requiring six months ofservice or more before any vacation days are available, which assists inaddressing competitive recruiting issues.
    Another consideration in establishing a vacation tracking process is whether totrack based on anniversary date for all employees, or to use a calendar orfiscal year, with pro-rated amounts for midyear hires. The latter becomes morecommon as the number of employees in the organization increases because it easesadministration.
    Once you have established the method for accrual, be sure to document theprocess in employee handbooks, manager communications and recruiting materials.

SOURCE:Melissa Meller, senior consultant, Human Resource Innovations Practice, TheSegal Company, mmeller@segalco.com.
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 The information contained in this article is intended to provide useful information on the topic covered, but should not be construed as legal advice or a legal opinion. Also remember that state laws may differ from the federal law.

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