My boss wants to implement a catastrophic sick leave pool at our work that employees can donate their PTO to. Currently employees can accrue a certain number of hours of leave per month. They can carry this leave over year-to-year up to a cap. To my mind it is silly to allow them to donate their PTO since they will simply re-accrue it all back and now we will have a liability for both the employee and the pool rather than just the employee (if the employee hadn’t donated the leave they would either have had to use it or stop accruing when they hit the cap).
It seems like it would simply be a lot less headache to just either 1) allow employees to run a negative sick leave balance in the case of a catastrophic event or 2) simply cut the employee a check who has had a catastrophic event.
It seems like the main advantage of the pool is to 1) make the employees “feel” like they are doing something generous (and I guess to some extent they are) and 2) increase attendence for those employees who donated (assuming they’re not simply donating time they would have lost to the cap anyway). Am I right or am I totally off-base?
It does seem like an interesting accounting issue to value the accrued catastrophic leave when you don’t know which employee will use it. It’ll cost a lot more if the janitor uses it than the CEO.
Other than that… I don’t really see a big headache in tracking a general pool of time off.
I don’t know what value the employer expects, but this could add up to a pretty large liability before it gets used. That might make the balance sheet look bad, which could have serious effects on financing decisions.
If it was me… I’d look at disability or long-term care policies for the employees.
Is the idea to let people donate vacation time, or only sick time? Because there are lots of good reasons you want your people taking their vacation time.
Where does the liability come from? If either the employee or the pool has the days run down to zero, then further sick days go unpaid, right?
It would be very generous for the employer to do that, but he runs a risk that if the employee doesn’t come back to work (for any reason) then he’ll never get reimbursed for that generosity.
Cut them a check? What does that mean? Do you mean “cut them loose”, as in “fire them”? I really don’t understand.
Yeah, that’s a big part of the headache. Since it is “Vacation” time being donated (which is on the balance sheet) to a sick leave account (which generally isn’t on the balance sheet) I’m not 100% of the proper accounting treatment (this is further complicated by the nature of operation which I won’t delve into).
Our payroll system and timesheet system isn’t really made to handle it. It can be done, of course, but it will have to be ‘jimmied’ to work.
Sorry, sometimes I forget that not everyone here is American. “Cutting a check” is derived from the Old West expression “Bleeding a Czech”. You see, cowboys used to bring a couple Czechs on each cattle drive. In the event that water couldn’t be found along the way, the Czech would be bled to satisfy the thirst of the cowboys. As disgusting as this sounds, it was seen as preferable to killing something valuable like a horse or a dog.
So essentially “cutting a check” means eliminating the undesirables for the good of the strong. It’s harsh, but it keeps our healthcare premiums down so most everybody is happy…
;);) Okay, I think you can see why I do accounting and not comedy. “Cutting a check” (or a cheque if you prefer) simply means paying them. I’m just stating that I’d prefer to just pay them directly rather than have to set up a separate donation pool.
My SIL (a teacher) used donated time for both her pregnancies. It helped her out a ton. So I’m in favor of it.
Are you sure your days need to go into a pool before someone uses them? The way it worked at her school was basically she was sick at home and she let her fellow teachers know she needed days and the ones who know and like her, and who felt they had enough extra days left, threw some days her way. I’m pretty sure it wasn’t just a pool of days sitting around waiting for anyone to use at their leisure. That system seems like it’s pretty open for abuse.
Federal agencies operate a couple of programs along these lines. The Voluntary Leave Bank Program sounds like what the OP’s employer is suggesting. There is also a program like **ZipperJJ **mentions where transfers are direct from one person to another, rather than through a generalized bank. I’m not a Federal employee, so I’m not terribly familiar with the specifics, but I know a neighbor drew on these leave programs before he passed away. Leave donations provided more financial support to his family at a very tough time than they would have received from disability programs.
I don’t understand the issue I guess. I assume the books are audited and that booking a liability is really an issue. Small companies might not have to deal with the same issue.
But generally, why is it more difficult to calculate the liability of days off belonging to 50 employees vs 50 employees plus a pool? I guess the answer is the rate but that could be estimated just fine.
As for why…apparently the company has no obligation to keep paying people who can’t work due to a catastrophe. They probably would want to in many cases. Why not ask the fellow employees to share in that “moral” liability…and why wouldn’t many employees want to?
Sounds like an employer too cheap or callous to run a Long Term Disability plan.
My concerns - who decides who qualifies, and for how much? At least a LTD policy from a major insurance company comes with an explicit set of rules. (In my case, it was immediate hospitalization or after 4 days off with doctor’s recommendation not gto go to work.) Is anyone even adding up the total donated, or does it all disappear into a black hole, then the employer can dole out a few days every so often to make you think it’s a benefit.
Giving it for maternity leave just seems like a major cop-out on the employer’s behalf.
I ahve trouble imagining any such plan really accruing enough time to cover, say, someone in a car accident or undergoing cancer treatment; unless it’s a really big healthy company.
Partly, I blame stupid policies. I knew several people whose companies gave you accrued sick days; if you were healthy and conscientious, you could end up with a massive number of days on the books you could take whenever. On lady was told by co-workers, before you quit, call in sick for a month; since there was no payout. A system designed to get you to lie.
Most places required you to take vacation that year, max you could bank for future was 1 week. Use it or lose it.
The employer’s concern, of course is that they are liable for a massive amount of wages for paid time off. Get people to say “i don’t want it, take it” and you’ve saved a bundle. Maybe they did sign up for a LTD plan but didn’t tell you?
People are normally credited with a certain number of sick days (and these are accounted for by the finance people). If someone has a serious illness, they will use them up. When that happens, a call goes out to ask people to donate their sick days.
We have a use-it-or-lose is rule – your sick and vacation days can’t be banked. As a twist, sick days accrue from the first of the year, while vacation days accrue from your anniversary date.
I’m not sure if I would have phrased it quite that way, but my first reaction was “Why don’t they just offer Long Term Disability insurance and/or an Income Protection Plan?”
When I had mono, I was paid through my company’s Income Protection Plan (i.e. short- to medium-term medical leave).
I think the difference between vacation and sick leave is that vacation time is a ‘gift’ and sick leave is an earned benefit.
Vacation is limited but sick leave accrues (up to the cap). The company is on the hook for the sick time and would probably not mind using it to get it off the books. So perhaps the company doesn’t care that much who actually uses it. Plus, it fosters good will amongst employees.
We do the same, and I think it’s a good idea. You can only donate up to 40 hours at a time here, though, and must maintain a minimum balance of sick time for yourself (I think 500 hours). I only miss three or four days a year due to illness, if that, and routinely have a 1000+ hours of sick time available. I donate sick time to coworkers just about whenever I’m asked (including once to a lady I didn’t really like all that much, but I figured I earned some good karma by giving to her anyway).
I think you have it backward. Vacation is a requirement that any civilized country and some US states require employers to give, like overtime pay or minimum wage - it’s an earned benefit. You as employer have no choice, other than to be more generous than the law requires.
Sick days are an entirely arbitrary construct. Nowhere requires them, how they work is all over the map, and many employers simply say “we pay you if you show up, otherwise, too bad.”
As someone who has taken maybe 2 sick days in 35 years, I don’t see the value of paying someone to not show up, but then saying “if you don’t use these days, well, too bad.” The incentive is to make employees lie or give up free money.
My current employer has a very simple rule - you get 5 additional days off each year - use for sick days, or add to your holidays, but use within the year. A previous employer had a less formal plan - we pay you whether you show up or not, unitl LTD kicks in. 2 people in our department of 20 accounted for 75% of sick days.
I think the “donate sick days” idea is generous, but it bypasses the simple idea that a real employer should have a real support plan in place; plus, who’s doing the acounting on the plan and how do you know it’s fair? Is it accounted by dollars or days? What constitutes “sick”?
We started a sick leave bank where I worked. Most people donated two days (out of our yearly twelve, savable to 60). Three years later the bank had been emptied by a couple of sick-scammers, so the program was ended.
I confess I don’t really understand the accounting theory behind them, but when I hear about sick leave banks at other employers (we don’t have them where I work), I always think they sound a little gimmicky. That’s not quite the right word for my impression, but close enough …
Anyway, it feels odd to me that something (PTO) that is part of your compensation can be doled out to other employees by the company … I wouldn’t do that with my paycheck, I think it’s illegal to do that with my insurance benefits, and it makes me think the company is using the concept of the pool to grandstand how understanding the company is of unforeseen medical situations … if they were that understanding, they would have a better policy. What happens when someone has a genuine medical emergency, the pool dips down, and then ANOTHER employee has a genuine medical emergency? That feels very inequitable, like the company can say “aww shucks, we had a pool and everything, it’s just bad timing for ya!” (For those who work at places with pools, can people in that situation be advanced days from the pool, based on average levels of donating?)
The one on one transfers also seem like they have potential to be dicey, then it’s identified who gives and who doesn’t, and to whom.
It’s been a long time since I’ve paid attention to the specifics, but I seem to recall that when I took some leave via my employer’s short term disability plan, I was paid at something like 60% of my regular pay. Is that atypical? Because if disability plans usually pay at that sort of scale, a sick leave bank would be a tremendous benefit. Perhaps they can be used in combination?
That sounds pretty typical to me. The other issue is that I don’t think short-term disability applies when you’re taking care of someone else who is sick. If your spouse or child has some sort of serious medical issue and you need to stay home to take care of them, a sick leave pool can be godsend. I mean, you can take time off per FMLA, but that’s unpaid leave and can constitute a serious financial hardship.
Okay, I think you can see why I do accounting and not comedy. “Cutting a check” (or a cheque if you prefer) simply means paying them. I’m just stating that I’d prefer to just pay them directly rather than have to set up a separate donation pool.