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PTO buy back program assistance
Benefits & Compensation
PTO buy back program assistance
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My company would like to initiate a PTO buy back policy. Many employees have large accruals of PTO, we'd like to offer cash in lieu of the PTO and make changes to our PTO policies to limit the huge ac
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Forums » Topic Forums » Benefits & Compensation » PTO buy back program assistance
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PTO buy back program assistance
posted at 6/14/2012 5:06 AM EDT
on Workforce Management
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Posts: 1
First: 6/14/2012 Last: 6/14/2012 |
My company would like to initiate a PTO buy back policy. Many employees have large accruals of PTO, we'd like to offer cash in lieu of the PTO and make changes to our PTO policies to limit the huge accruals. If anyone would like to share their experiences with these programs or any sample policies, I would be most appreciative! |
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Re: PTO buy back program assistance
posted at 6/19/2012 12:27 PM EDT
on Workforce Management
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Posts: 14
First: 10/13/2011 Last: 5/14/2013 |
In Response to PTO buy back program assistance: My company would like to initiate a PTO buy back policy. Many employees have large accruals of PTO, we'd like to offer cash in lieu of the PTO and make changes to our PTO policies to limit the huge accruals. If anyone would like to share their experiences with these programs or any sample policies, I would be most appreciative! Posted by janimal I work for a Federal agency. We do not have PTO, but do have earned Annual Leave (AL) that -- for full-time, career, employees -- accrues at the rate of 4-8 hours per bi-weekly pay period, depending on tenure. We have limits on the number of hours of accrued AL that can be carried over from year-to-year; this can result in "use-or-lose" situations. Once a year, we also can cash in up to 128 hours of AL. In addition, employees can donate AL to co-workers on extended leave who are running out of paid AL and Sick Leave. At retirement, retirees receive a lump-sum payment for their unused AL. Together, all these policies prevent huge accruals of AL. |
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Re: PTO buy back program assistance
posted at 6/19/2012 3:22 PM EDT
on Workforce Management
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Posts: 1
First: 6/19/2012 Last: 6/19/2012 |
I work for a large healthcare organization. We allow the sale of PTO at 80% of it's value and up to 80 hours per year. We do have a higher level cap. In addition we allow employee to donate PTO to local charity events we have, convert it toward the cost of their benefits or donate it to a central employee helping fund. |
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Re: PTO buy back program assistance
posted at 6/19/2012 4:01 PM EDT
on Workforce Management
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Posts: 222
First: 9/29/2011 Last: 5/15/2013 |
Check your state laws before you implement anything. Some states do regulate PTO/accrued vacation caps (in California, the cap is not less than 1.5 times annual entitlement). You may also want to check state law regarding the buy back rate - some states may require a buy back at the current pay rate of the employee. I'm not sure that I'd go down the buyback path, though, unless for some reason (like positioning the company for sale) you want to get accrued liabilities off the books. You might be better off simply imposing an accrual cap. Anyone who's over the cap doesn't get to accrue any more vacation until he/she uses enough to get below the cap. |
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Re: PTO buy back program assistance
posted at 6/26/2012 1:54 PM EDT
on Workforce Management
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Posts: 180
First: 9/21/2011 Last: 5/14/2013 |
Agree with Sue...make sure you understand the taxation/deferral issues of a buyback policy. It might be seen as deferred income if the employee has the right to cash it out at anytime. It's not a simple one sized fits all answer. State laws can definitely come into play also. I too would just limit it from here forward and require that they use some of it first rather than paying it out only to have them accrue more unused. Because there is a group of employees who will never use all the vacation time given them. I would not take this on as a DIY without a tax attorney and others familiar with wage laws in your state. |
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Re: PTO buy back program assistance
posted at 6/26/2012 2:02 PM EDT
on Workforce Management
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Posts: 180
First: 9/21/2011 Last: 5/14/2013 |
And here are just a few places to start your research" http://www.irs.gov/pub/irs-wd/0130015.pdf http://www.devinemillimet.com/uploads/docs/Friday_Email_Alert_101008.pdf Both are a little old, but are good reads.... |
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Re: PTO buy back program assistance
posted at 6/27/2012 9:54 AM EDT
on Workforce Management
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Posts: 14
First: 10/24/2011 Last: 5/3/2013 |
And people wonder why employees get burned out and don't operate at peak performance. I would do everything possible to not encourage employees to sell it back and force them to use it. If you're going to allow them to sell it, the other posters pretty much covered it. |
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Re: PTO buy back program assistance
posted at 10/5/2012 3:40 AM EDT
on Workforce Management
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Posts: 61
First: 10/2/2012 Last: 12/5/2012 |
I wish we can convert our PTO to cash. but right now, our policy is either use it or loose it. that is why most of the employees are on leave on the last month of the year and the first of the new year. |
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