Buying time off
More employers starting to offer employees more options
Jeffe Kennedy and her husband love all kinds of getaways, from fun in the sun to sightseeing to shopping for local artwork to fill their home.
"I run out of vacation time every year," she said.
But that's no problem, since Kennedy's company offers a buy-sell vacation program that allows her to purchase an extra week of time every year.
“It’s absolutely worth it to me to pay out of pocket for the extra time off," said Jeffe.
According to Payscale, a company that conducts job related research, the average American worker receives about two and a half weeks of vacation time each year. That's not enough for some, but too much for others. However, with buy-sell programs, also known as cafeteria plans, everyone gets what they need, according to an expert on employee benefits plans.
“I think employees like the flexibility of being able to decide how many days they want to take off," said Julie Stich with International Foundation of Employee Benefits Plans.
A recent survey found 14 percent of companies now allow employees to buy or sell their vacation days, through payroll deductions or credits. Building materials manufacturer USG Corporationis one company offering both options. Managers say it's a great way to build employee loyalty, especially in tough economic times.
“We get very, very positive feedback about vacation buy and sell. Flexibility in terms of how people work, where they work, when they work is very important to employees today,” said Brian Cook with USG Corporation.
However, he says, the "buy" is much more popular than the "sell."
“About half of employees will buy a week of vacation each year. Only about 10 percent will sell a week,” said Cook.
Some companies offer the third option of donating unused vacation time to charity.
“Employees who have extra days they can’t use can give them back to the employer who converts that into a cash value and then writes a check in that amount to a charity,” said Stich.
Other businesses offer the chance to donate to fellow workers.
“Another employee who may be suffering a personal crisis can tap that pool and have additional time off,” said Stich.
As for Kennedy, she already has big plans for her extra vacation this year. She's planning an extended trip to Ireland.
“It’s not much point in making the money if you can’t use it to do something really interesting,” she said.
When employees sell their unused vacation days back, they'll normally receive an extra paycheck, with all the usual deductions. However, companies can also offer them the option to contribute the cash to their 401K or profit-sharing plan instead.
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