Stopping Accruals

HR Jungle

“Do I continue to accrue vacation time for employees on leaves of absence?”

Your HR Survival Tip

The simple answer is no. Hopefully you have all your accruals set up through your payroll system. That makes it much easier to manage those leaves in a couple of ways.

First, when an employee goes on any leave of absence, change their status in payroll from “active” to “LOA” or whatever you have set up for leaves. If you don’t have that option, talk with your payroll provider and ask them to add it.

Second, make sure the payroll system stops accruing sick, vacation, and/or PTO whenever an employee’s status is LOA. Once they return to work, you change them back to active so they can get paid and start accruing again.

Third, talk with your payroll provider about a hire date versus benefit date (or anniversary date). The hire date is easy and self-explanatory. The other date might be called different things in different payroll systems. What you want is a secondary date that aligns with the employee’s anniversary date but recognizes when someone is active versus on a leave.

When you have these dates and the status working properly in  [click to read more …]

Sick and Exempt

HR Jungle

“I have a manager who is out sick a lot and I’m trying to figure out if unpaid time is an option with exempt employees.”

Your HR Survival Tip

All California companies must have a Paid Sick Leave plan in place but the sick leave may also be provided through your PTO (Paid Time Off) plan that combines sick and vacation time. Exempt employees are those paid a salary for doing their job, irregardless of the number of hours worked. Use and payment of sick time with exempt employees is often confusing so you’re not alone.

You can be conservative and pay the exempt employee a full week’s pay even when they are absent. However, years ago, California’s Labor Commissioner provided guidance on exempt absences to help us navigate this tricky situation.

If the exempt employee calls in sick for the whole day:

and they have sick time available — you record the sick time used against their balance and they will receive full sick pay for that day. and they have some sick time but not enough for the full day — you record the sick time used (up to their balance) but still pay for the whole day.  [click to read more …]

Vacation Versus PTO

“I hear people talk about vacation and PTO but aren’t they the same thing?”

Your HR Survival Tip

The confusion between vacation and PTO may be the fact that they both provide paid time off for employees. However, these plans have important differences.

We are all familiar with vacation where we earn paid time off, usually over time. The “official” PTO (Paid Time Off, with caps) bundles vacation, sick leave, and personal time into one program. Both were designed as tools to help with retention and to provide time for employees to relax and avoid burnout. Vacation and PTO plans are optional for companies. So far, the government doesn’t require personal paid time off.

Vacation

You have a lot of freedom in designing a vacation plan. Common choices includes the length of the eligibility period, different amounts based on the level of your position or longevity, accrued or dropped in, etc. Keep in mind that any unused vacation time earned by the employee must be paid out upon termination. You’ll need a cap to ensure you aren’t paying out months’ worth of unused time. However, legally, there is a minimum cap you need to allow. Vacation time, in California,  [click to read more …]