Companies are increasingly ditching traditional vacation accrual policies in favor of allowing employees to take whatever vacation they want.
Most employers allow workers to earn set amounts of paid vacation that accrues over time worked (e.g., 1 hour of vacation for every 40 hours of work, up to a maximum of 10 days). Under the new policies, employees do not accrue vacation benefits, but nonetheless can take paid time off whenever they want, subject to employer permission. No-accrual vacation policies reduce employers’ administrative responsibilities to track vacation accruals, and they reduce the costs of employee terminations, as there is no accrued-but-unused vacation to be paid out. While the obvious concern is that employees will abuse no-accrual policies by taking excessive vacation, employers that have implemented the new policies say that does not happen. In fact, no-accrual policies can be effective recruiting tools, as they evince a level of trust that many employees appreciate. No-accrual policies are definitely not for all employers, and they must be implemented carefully in situations where employees previously accrued vacation. Still, many view no-accrual vacation policies as the best of both worlds: They enable employees to continue receiving vacation, while enabling employers to not have to worry about tracking it or paying it out.