How typical is it to allow employees to borrow against future vacation time accrual? Seems like it would be a great way to allow new employees some flexibility in taking a vacation they might have pre-planned--e.g. might help with recruiting.

On the other hand, what if a employee takes advantage of "going in the hole" vacation-wise, then leaves the company? How would HR deal with this, as the employee would owe us money--or not?

What are the issues here?

 Thanks.

 Mike

 

There are some companies that will allow a person to go "into the hole" and some that won't.  Remember that it may not be possible, based on a state law, to deduct not yet earned vacation time from the person's last check, so the company may have to eat the cost. 

We have a policy that allows employees to borrow 2 days before they're accrued. this way, if we have to eat the cost...it's nominal. It allows employees a little more flexibility. we also have a bank of PTO days employees get up front to use during the year and allow them to take those days as vacation if they haven't accrued enough time yet.

During the first year new employees are granted 5 days of PTO accrued at the rate of 3.333 hours per month and they are allowed to take no more than 20 hours of PTO during the first 6 months of employment.  It is not much but it does help.

We watch the PTO closely and we have at times allowed employees to exceed their accrued PTO and only once have we had to "eat it" in the last 15 years.  As we pay weekly we notify the supervisor if the employee is over his accrued time and then let the employee make the decision whether to "go into the hole " or take off without pay. Although it is not in our policy we do not allow them to go into a deficit of no more than 3 days and if they do we tell them they will have to take further time off without pay until they have accrued enough to cover what they have already taken. 

I think that with our policy of sending out their PTO account balances every other month helps them to understand where they are in the use of their PTO.  We do encourage employees to call in to find out what their PTO balance is before they take time off so that helps also.

Hope this gives you some idea of how it may be handled.