Vacation Policy 101: Use it or...Lose it!?!? Can they do that?

Just like clock-work, I'm getting the annual question from friends regarding their vacation policy.  "Heya - my HR department says I have to take all my holidays by December 31 or I lose them and won't get paid for them. Can they do that? I mean is that legal?"

First a major disclosure here - I am not a laywer. So any advice I give does not represent that of a lawyer. 

But no. They can't do that.  You are to be paid either in days off or in actual salary (and as a side note, depending on the province that you work in you have to ask for permission to get paid WITHOUT taking time off...the province actually WANTS you to take a break as well!)

I am guilty of writing the same email, a "Friendly reminder from your friendly HR department" that basically states, "Don't forget to schedule your vacation time.  Remember it's a use it or lose it  policy".  But here's the truth - it never was (technically).  If the employee has earned it, it's theirs to take.  We knew that.  We just wanted you to take your vacation.

Employers have valid reasons for wanting their employees to take the time off.  Not only do studies show that a rested employee is a much more productive employee, it makes sense for the employer's pocket books as well. I once worked in a company that allowed endless accrual.  One employee ended up terminating employment by providing 2 weeks notice (due to stress no less) and the company had to end up paying the employee out for 27 months of vacation.  At that time it was a $215,000 pay out.  For a tiny little company, this hurt.  A lot.

I often get people saying, "Well I'd actually like to take 6 weeks off and travel, so I want to accrue my time from this year to next year."  I have never really thought of myself as Catbert (The Evil HR Director) but my initial thought was, if a company can have you be gone for 6 weeks, not replace you, do they really need you?  I mean come on people - I get wanting to take an extended vacation - but if you look at it from the organization's perspective, they too have a company to run.

Now going back to the "Use it or lose it" policy. Look - they can't do it - they can't take your vacation time away. But they CAN schedule you your time for you.  So take your pick - schedule your own time or have it scheduled for you.

Here's the deal - if you've been too busy to utilize all of your vacation this year due to various projects, your manager AND HR will be sympathetic...ummm...SHOULD be sympathetic.  Work something out with them that is fair in both worlds.  But if it's because you had nothing better to do, I can't blame the company for wanting you to use it.  They need to balance their liabilies with their assets (which should be you).

So in conclusion:  They can schedule the time for you without warning (the only "right" you have is that you have earned it.)  They can't take it away in it's entirety.  They do not have to pay you out for it in cash (unless you terminate).  But take the vacation you've earned - if for nothing more than to just re-charge those batteries. 

A fried employee does no good to anyone.

Now, if they keep denying you the option for vacation....you have an entirely different situation on your hands.

http://www.elevatedhr.com/