Vacation days can be an employee-friendly commodity

Flexibility gained at little cost

Cox NewspapersDecember 29, 2012 

— Some employers have come up with a worker-friendly solution for what has become an annual problem – using up vacation days by the end of the year: They let employees buy or sell vacation days or paid time off.

Employers who offer it say it gives people the flexibility they need to manage their lives. And for companies facing tight economic conditions, it’s a way to offer a benefit that costs the company little but may help attract and retain workers.

A 2010 survey of employers by consulting firm Mercer found that 14 percent of respondents allowed employees to buy or sell vacation days. About 9 percent allowed the option to sell, while 7 percent offered the option to buy, the survey found. Buy and sell provisions are slightly more common in paid time off plans that combine sick time and vacation time, as compared with vacation-only plans.

Kate Mahoney, who has worked at Kimberly-Clark in Roswell, Ga., for 10 years, said she buys a week of extra vacation every year. She and her husband are from Wisconsin and use the extra time off to spend Christmas with their family.

“I do love the benefit,” said Mahoney, who works in sales. A survey conducted by Harris Interactive for destination club Inspirato found that one-tenth of employees who get vacation time from their employer would prefer more time off over a higher salary or promotion.

AGL Resources of Atlanta allows non-union employees to buy up to five additional vacation days at their pay rate during open enrollment for benefits. The amount is deducted from the employee’s paychecks spread out over the entire year. If they don’t use those days by the end of the year, the company will refund their contribution. About 30 percent of eligible employees buy extra vacation days.

“Employees know best the amount of time they need off work,” said AGL Resources vice president Wendy Henderson.

Buying or selling days off may be less important to employers who allow workers to roll over unused vacation time. One challenge for employers is tracking the time bought and sold, said Julie Stich, director of research at the International Foundation of Employee Benefit Plans. But for firms that value flexibility for workers, “it’s definitely a benefit that may fit your company culture,” she said.

Chris McDade, a regional operations director at AGL Resources, oversees about 100 employees and said it could be “a little bit challenging” to cover the workload of his field technicians and meter readers if all employees bought the extra week. He said he plans ahead in January to understand how many weeks each employee has off.

McDade buys the extra week himself to help care for his young children when school is out or when they get sick, taking turns with his wife, who also works. He said the benefit also helps him when bringing new employees on board who want to maintain a certain amount of vacation time.

“Employee work-life balance, in today’s world it’s probably the most important thing we can do to understand and help our employees,” McDade said.

Because refunding unused vacation days from an extra week results in a payout near the end of the year, some employees at AGL Resources use it like a Christmas savings account. Others use the extra cash for the holidays.

USG Corp. allows its employees to buy or sell extra vacation days.

“It’s a popular benefit,” said USG spokesman Bob Williams. The company has offered the benefit since the mid-1980s, and about 53 percent buy the extra week, while about 5 percent sell a week to the company.

Allowing employees to sell vacation days can provide a work-around for getting more work done.

“Some employers, when it comes to the year-end, have a difficult time letting people take time off,” particularly at places like hospitals, said Alan Dale, a principal in Mercer’s health and benefits practice. “So they offer the sell option because they know they can’t let employees take that time off.”

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