Did you know that you can inquire about a company’s vacation policy when considering a new job? Ever wondered what vacation type best suits you? Paid vacations can leave you with a lot of unanswered questions. Employers often have their own sets of policies that outline how vacation time is accrued and turned in. The fine details can leave you with several unanswered questions but with a broad understanding of how vacation time works, you can ensure using your right to enjoy a vacation correctly. In this blog, we will look at some of the general terms surrounding paid vacations and what they mean for your next holiday.
What is Paid Vacation?
Paid vacation is a period an employer gives their employees as part of their compensation package. When an employee uses a paid vacation day, they do not work but they are compensated the same pay as if they had worked. Unlike sick days, which are unplanned, paid vacation days are requested in advance and approved by a supervisor or manager.
Typically, employees earn paid vacation days based on the time they work. For example, a company might provide three weeks of paid vacation per year. Paid vacation is offered in “workdays” and not calendar days. So, three weeks of vacation would translate to 15 days and not 21.
Who Qualifies for Paid Vacation?
Any employee can qualify for paid vacation. However, there are typically no laws requiring employers to provide vacation pay. It’s usually offered as an incentive to entice potential employees. Not offering paid vacation makes employers less competitive in their markets. Each company will have their own policy on who and how much paid vacation can be earned. To learn if you qualify for paid vacation, ask your employer for their vacation policy, or reach out to their HR department for more specific information.
How are Paid Vacation Days Accrued?
There are several ways employees can accrue paid vacation time. The two most common are accrual per pay period and per year. Employees earning paid vacation time per pay period will have a set amount of paid time off hours added to their bank of available hours each time HR processes payroll. The other way vacation days are added to your available balance is in a lump sum. In this case, at the beginning of a set period, all the vacation days you get in a year are added to your balance at once.
As you earn and accumulate vacation time, there are a few things to keep in mind when you look at your vacation time bank, including your previous balance, current balance, and end-of-year balance.
Your previous balance is exactly as it sounds. It’s a reflection of the balance of your vacation time after you have redeemed some of your vacation time. For example, if you started with 14 vacation days, and took off two days, your previous balance will reflect the time before you requested vacation time.
Your current vacation balance reflects how many vacation days you have accumulated thus far. Unlike your previous balance, which reflects your most recent balance before using your vacation time, your current balance is updated based on the time you’ve worked. It reflects the time you are currently able to request off.
Your end-of-year balance reflects the time you have in your time bank at the end of the year. This is particularly important, as many employers do not let vacation time roll over. If you don’t use your vacation before the end of the year, you lose your vacation time and start over with a new set of vacation days in the new year. Depending on your company policy, some employers allow employees to turn in their vacation days for the cash value of their vacation bank.
Understanding your company vacation policies is essential when it comes to making the most of your paid vacation. Employees can track their paid vacation leave in easily navigable HR platforms, such as MenaME®, where they can view their current leave balances, request time off, interact with their supervisors in real time, and so much more.