When I first started advising employers in the early 1990s, a common problem was the terminated employee who demanded to be paid for a large amount of unused vacation time. In recent years, employers have gotten much smarter when it comes to managing employee leave. In addition to keeping better track of employees’ use of vacation time, and to the extent permitted by state law, employers have limited the number of vacation days that employees can carry over from one year to the next and have developed clear policies limiting or eliminating the right to be paid for accrued leave upon termination. Even employers that operate in states where accrued vacation must be paid to employees who leave (California, Montana, and North Dakota, for example) have found ways to limit their vacation liabilities by stopping accrual of additional vacation if the employee reaches a certain maximum threshold.
Understandably, many employees have not been taking their vacations during the COVID-19 pandemic. While I may be perfectly happy to use my two weeks of vacation skiing down the slopes in Colorado or reading a tattered Hemingway novel at a café in Montparnasse, do I really want to use my hard-earned vacation time staying home with the family? In fact, recognizing that these are extraordinary times, some employers have temporarily relaxed some of their vacation policies and have allowed employees to carry over more vacation than they would normally have been entitled to or offered to “buy back” a portion of their employee’s unused vacations.
Perhaps the biggest problem with “staycations” is that employers themselves don’t take them seriously. While a boss would never consider calling a subordinate who is taking their honeymoon on Maui, they may not think twice about sending an e-mail to someone who is vacationing at home during the pandemic. Here, it is important for employers to remember that the primary goal of preventing employees from “hoarding” vacation days is not to avoid surprising payments when the employee eventually leaves the company, but rather to ensure that employees have the opportunity to occasionally recharge. In addition to the obvious benefits for the employees who take vacations (they are generally more satisfied with their jobs and more productive), companies reap other benefits from their vacationing employees. For example, when senior managers take time off, it gives the people who work under them opportunities to develop their own leadership skills. It also encourages employees to cross-train so that the company is not completely dependent on a single employee. In fact, in some industries, some employees are required to take mandatory vacations during which they are completely disconnected from the company’s servers as a means to minimize the possibilities of fraud or malfeasance.
While we all hope that vaccines will make it possible for all of us to start taking “real” vacations again, in the meantime, employers should encourage their workers to take time off and make it easy for them to do so.