Christy Dickson will use money from selling unused paid-time off to pay part of her mortgage.
Sell-back plans convert unused time off to cash
The beginning of a new year brings with it for many employees a new batch of paid days off – and in some cases, a renewed challenge to use the time by year’s end or risk losing it.
At St. John’s Health System, however, eligible employees don’t have to worry about losing unused time. Instead, they can bank those hours and sell some of them back to the company through its paid time off sell-back program.
St. John’s employees can accrue a maximum of 500 hours. To participate in the program, they must use at least 80 hours of paid time off during the year and retain a minimum 80 hours for future use, according to Jim Brookhart, vice president of human resources.
There are, however, limits to how much time they can sell back to St. John’s. Those limits are equal to the length of time they accrue in a single year – from 23 days for a first-year employee to 36 days for employees who have surpassed the 10-year mark.
St. John’s employees are allowed to sell back their unused time off once a year, and forms must be submitted by Dec. 31.
That timing is just right for Christy Dickson, a medical assistant at St. John’s Smith-Glynn-Callaway Clinic and full-time student at Evangel University.
“You’re able to obtain the money in January, which is always a very difficult month for anybody,” said Dickson, who cashed in 31 hours of paid-time off and plans to use the money to help pay her mortgage. “It’s a benefit that you get that lump sum.”
Brookhart said the plan is designed to encourage time off and provide flexibility for employees.
“It really was just recognizing that people were not many times able to – or chose not to – use all of their vacation time, and allowing them to sell it would be a positive employee relation program,” Brookhart said.
St. John’s budgets for the costs of potential paid time off purchases each year so that the health system isn’t hit with unexpected expenses when employees cash the time in.
“We recognize the expense when somebody earns it, even though we may not pay it out until later,” Brookhart said. “It does affect our cash flow, but it doesn’t add any expense because we’ve already recognized that we’re going to pay that paid time off.”
In 2009, Brookhart said 15 percent of 4,500 eligible St. John’s employees participated in the sell-back program. The participation rate for 2010 was not available at press time.
Paid-time off and vacation policies play an important role in attracting future personnel, said Leigh Anne Rust, human resources manager at Buckhorn Inc. and past president of the Springfield Area Human Resources Association.
“It’s not just for your employees that you have currently,” she said. “But it’s also how you’re going to retain your employees and how you’re going to recruit those A-players that you’re looking for.”
Rust said while larger companies such as St. John’s have the staff and resources to provide more generous programs, businesses with smaller employee pools are sometimes apprehensive.
“You don’t want to set yourself up to offer a policy that may be taken away due to the economy,” Rust said. “I think more employers are looking at it that way. We want to offer the best benefits possible, but we don’t want to have to take any away when times are tougher.”
CoxHealth allows its employees to sell back a minimum of 40 hours of paid time off, said John Hursch, vice president of human resources. He said the policy results in higher employee attendance.
“Earned-time off systems are designed to encourage people to be at work and not call in, because you always have to use your time off to cover an absence,” Hursch said. “That’s why in health care, the average unscheduled absence is two days less with an earned-time off system than a vacation holiday system.”
Rust said employers that are interested in changing their time off policies should first complete two important steps.
“Definitely survey your employees to get their input,” she said. “Also, survey different companies in the area so you know what their vacation and PTO plan is so you can benchmark where you’re at compared to other local companies.”
For Dickson, the ability to store up to 500 hours of paid time off or convert part of it to cash is a welcome benefit that counters the stress that can come with working in health care. She said she typically sells back as many hours as she can after leaving herself adequate vacation time.
“There’s that overriding sense of responsibility for the community in the health care field,” she said. “It is important that the health care workers have that blanket that covers them.”[[In-content Ad]]