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Deduct Vacation Leave if Sick-Leave Bank Is Empty

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in Office Management,Payroll Management

Q. If an employee is out sick but has already used up all her sick-leave hours, can we legally subtract from her vacation time instead? —K.P., Michigan

A. Generally, yes. You can legally tap into an employee's vacation allotment for sick-leave absences if the employee has exhausted all of his or her sick time. Review your policies and past practices to make sure that you've handled similar situations the same way.

Also, you should consider implementing a paid time off (PTO) plan, in which employees accrue time off in a single leave bank. Many employers convert their traditional sick, vacation, and personal day policies to PTO plans. That effectively shifts the burden to employees to manage their scheduled and unscheduled time off.

PTO also gives you an ideal chance to step back and consider issues such as: (1) the total amount of paid leave you provide employees, (2) the method of accruing paid time off, (3) the increments in which leave can be taken and (4) notice requirements for scheduled and unscheduled leaves of absence.

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