Vacation Benefit for Fiscal Year 2021 (July 1, 2020 – June 30, 2021)
June 24, 2020
Important note: The questions and answers set forth below are meant to provide additional details on how various aspects of the new vacation policy will be administered to eligible employees on paid status as of July 1, 2020. This document is for guidance purposes only and does not amend or supersede the College’s official vacation policy effective July 1, 2020.
Can you summarize the key changes with the vacation policy that will go into effect this July?
Here’s what remains the same:
- You will continue to receive one vacation accrual amount per month.
- The total vacation leave that you are eligible to accrue over the course of the fiscal year also remains unchanged.
- If you separate from employment with the College, you will receive a payout of any vacation that you have accrued but have not used as of your separation date.
Here’s what’s changing:
- Your monthly vacation accrual will be available for use as it is accrued; you won’t have to wait until the following July for it to be available for use.
- Your monthly accrual will stop if your total vacation balance reaches your annual award, and will only resume once you use vacation such that your balance falls below your annual award. For example, if your annual award is 20 days, your monthly accrual will stop if your vacation balance reaches 20 days. Your accrual will resume once you use vacation and your balance falls below 20 days.
How can I receive the same amount of vacation days as I have in the past, yet this new method is less costly for the College? Can you explain how this works?
The monetary value of accrued vacation -- the amount that would have to be paid if each employee were to separate from employment with the College - has to be accounted for by the College as a potential financial liability. Under the new plan, the College’s total vacation-related financial liabilities will be reduced because the College will no longer maintain two vacation pay accounts for eligible employees, as detailed below:
Vacation pay accounts maintained under current method for accruals:
a) all vacation leave earned in the previous fiscal year and available to use
b) month-by-month accruals of vacation that will not be available for use until the following fiscal year
Vacation pay accounts maintained under new method for accruals:
a) month-by-month accruals of vacation that are immediately available to use
I’m eligible to receive 20 days of vacation leave over the year. Given the requirement to use drawdown paid leave days, my total vacation balance on July 1, 2020 will be less than 20 days. Under this new accrual method, how much vacation can I take next year?
You will start the year with your vacation leave remaining after the drawdown (and also subtracting any other vacation days you may have taken in addition to the drawdown) and you will continue to accrue vacation at your normal rate for each month of active employment thereafter, until you have accrued a total of 20 days. You can use any or all of that amount once it has been accrued, subject to supervisor approval, consistent with existing practice.
Below is an example of an employee who due to the leave drawdown, started with a vacation balance of 12 days on July 1, 2020. Under the new accrual method, over the year, she will receive 1 ⅔ days of vacation pay each month that are immediately available for use. This example details the vacation days available for use after she took 20 days of vacation leave in August, October, December, March, May, and June. All leave is expressed in days:
|
|
Monthly Accrual |
Balance at start of month |
Vacation Days Taken |
Balance at end of month |
|---|---|---|---|---|
|
Jul |
1 ⅔ |
12 |
|
12 |
|
Aug |
1 ⅔ |
13 ⅔ |
3 |
10 ⅔ |
|
Sep |
1 ⅔ |
12 ⅓ |
|
12 ⅓ |
|
Oct |
1 ⅔ |
14 |
1 |
13 |
|
Nov |
1 ⅔ |
14 ⅔ |
|
14 ⅔ |
|
Dec |
1 ⅔ |
16 ⅓ |
5 |
11 ⅓ |
|
Jan |
1 ⅔ |
13 |
|
13 |
|
Feb |
1 ⅔ |
14 ⅔ |
|
14 ⅔ |
|
Mar |
1 ⅔ |
16 ⅓ |
4 |
12 ⅓ |
|
Apr |
1 ⅔ |
14 |
|
14 |
|
May |
1 ⅔ |
15 ⅔ |
5 |
10 ⅔ |
|
Jun |
1 ⅔ |
12 ⅓
|
2 |
10 ⅓
|
|
|
|
|
TOTAL DAYS TAKEN = 20 |
|
Once the required paid leave drawdown is complete in June of this year, I believe I will still have some leftover unused vacation days. Will those be carried over and added to the days I accrued for use as of July 1, 2020?
Yes, the carry-over of up to five accrued but unused days of FY2020 vacation will be allowed as we transition to the new policy (although given the required drawdown of paid leave, this won’t apply to most employees). For the few employees who will carry over unused vacation days on July 1, 2020, their available vacation balance may exceed 20 days. Under the new policy, these employees will not earn additional monthly vacation accruals until they take vacation and their total vacation balance falls below 20 days.
Why do monthly accruals stop when my total vacation balance equals my annual vacation award?
This change is being implemented to reduce the College’s total vacation-related financial liabilities, including the amount of funds that need to be available for vacation payouts should an employee separate from employment. It’s important to remember that the maximum accrual level and elimination of forfeiture/carry-over rules does not reduce the total annual vacation that employees are eligible to accrue and use. Under the new policy, employees can and should plan to take vacation from time to time and stay below their maximum vacation balance.
I was hired relatively recently and did not have enough available paid leave to meet the mandated 20-day drawdown requirement. Consequently, I will start the year with a negative vacation balance. Will I be able to take vacation next year?
If you have a negative vacation balance, you may need to earn several months’ worth of vacation accruals (at 1 ⅔ vacation days/month) before your vacation balance moves into positive territory. To account for this, in fiscal year 2021 only, provided you obtain approval from your supervisor and Human Resources, you may borrow up to 5 days of additional future vacation accruals, so that you will have the option to take some paid leave before your vacation balance returns to positive territory. The amount of advance vacation requested may not exceed the lesser of: (i) one week (i.e., 5 days); or (ii) one week (i.e., 5 days) minus the amount of Unused FY2021 Vacation you have in your bank
Please be aware that borrowing future vacation days will increase your negative balance and the number of monthly accruals that will be necessary to move your vacation balance into positive territory.
Why is the College reviewing other paid leave benefits? What’s the timetable for any decisions?
There are two primary reasons for the decision to review all paid leave.
The most significant driver in the decision to review paid leave benefits is the need for the College to take steps to stabilize our finances for the long term due to the significant financial impact of the COVID-19 pandemic. In addition, effective January 1, 2021, the Massachusetts Paid Family and Medical Leave (PFML) law will require specific, mandated paid leave benefits in circumstances that overlap with College-provided paid leave under the College’s existing policies. Therefore, we will be reviewing all of our paid leave policies over the coming months to make sure they meet the requirements of, and do not conflict with or duplicate benefits available under, the PFML law. We have not yet set a timetable for making these decisions; a progress update will be provided in the Fall.