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new management fad: charge workers for vacation

Professional workers on salary now have to pay $175 and up per day to be permitted to take vacation at some companies. The rate is determined by what their hourly rate would be if they weren't on salary:

http://story.news.yahoo.com/news?tmpl=story&cid=509&e=7&u=/ap/gm_buying_vacations

So, see how it works - as a professional programmer at GM for example, you will regularly work 12-16 hour days and you will not be paid anything extra for your overtime. If you want to take a vacation though you will be charged for it by the hour according to your hourly rate. But see, you don't have a hourly rate because you are a professional on salary.

Take time off, get docked by the hour.

Work overtime, no extra pay for you because you are on salary.

This plan is being touted as a benefit!
Listen up - brainwashing really works!

Scott
Friday, August 13, 2004

Uh.. you haven't got it quite right.  These sort of benefits allow you to purchase ADDITIONAL vacation time above and beyond your base time.  I've had this deal at many employers.  Usually I've gotten 3 or 4 weeks of base vacation time, with the option to "purchase" additional weeks of vacation time, based on hourly rate and spread out over all my paychecks for that year as a pre-tax deduction (taxed when repaid as vacation pay). 

What, exactly, is wrong with this?

muppet
Friday, August 13, 2004

My organization offers X weeks of vacation per year (depending on pay grade). However as an added benefit you can additionally, without professional penalty, "buy" an extra week of vacation basically by not being paid for that week.

So before you had X weeks of vacation (paid).
Now you have X weeks (paid), with an option to take one extra week if you really need it.

How is this a problem? If you're someone who really wants to go visit family in Tubekistania for a month, and you only have 3 weeks vacation, its an option you otherwise wouldn't have.

Dennis Forbes
Friday, August 13, 2004

nice to see the original poster get so thoroughly debunked on an issue like this :)

Matt B
Friday, August 13, 2004

This sounds a bit like a little extra benefit that I negotiated at a past employer.  As a new employee I got the usual abysmal initial amount of paid vacation days, but they agreed to let me take up to an additional week of unpaid vacation.

The GM deal looks even better.  While last year employees had to pay their daily rate, this year they only have to pay $175 a day.  That's less than $22/hour.

It is interesting that GM is doing this to save money.  For a lot of companies it would cost them money.  If an employee isn't working they can't be billed to the customer and aren't bringing in money.  Yet the company still pays out the same amount for health insurance and other benefits.

If I were a GM employee though, I'd be a bit worried.  It is obvious how this saves them money, but why are they not figuring in the value of the employees work to the company?

BTW, Scott, how did you happen to learn the usual number of hours per day put in my GM programmers?  I hear various third hand stories about such problems, but have never seen it except for short deadline crunch periods.

mackinac
Friday, August 13, 2004

i would love that benefit

the artist formerly known as prince
Friday, August 13, 2004

The issue is that under federal employment law, if your pay is reduced for time you take off, you are not on salary.

I have no problem whatsoever with a person on hourly having a scheme like this. But in the US, the practice is illegal for salaried employees.

Scott
Friday, August 13, 2004

"The GM deal looks even better.  While last year employees had to pay their daily rate, this year they only have to pay $175 a day."

Actually, they pay $175 if their daily rate is below $175. if it is above $175, they pay the higher rate. This is noted in the article.

Scott
Friday, August 13, 2004

"how did you happen to learn the usual number of hours per day put in my GM programmers?"

The article was sent to me by a college friend who is a programmer at GM who is unhappy about the plan and the fact he is on salary and not paid for overtime but has to pay the boss for each hour of 'vacation'  he takes off to pick up his daughter from school.

Scott
Friday, August 13, 2004

>>>Actually, they pay $175 if their daily rate is below $175. if it is above $175, they pay the higher rate. This is noted in the article. <<<

The article linked to in the OP doesn't say this.  It states:
- This year salaried workers can buy extra vacation for $175/day.
- Last year they paid their daily rate for extra vacation days.

This year's plan looks like a better deal than last year's for anyone making over $22 an hour.

IAC, I wouldn't trust a news article like this to get these kind of details right.

mackinac
Friday, August 13, 2004

Why is this better than getting docked for days off (past the number of paid days you normally get)?

Buying the days = it comes out of your pocket.
Getting docked the days = it comes out of your pocket.

Am I missing something or did some of you guys drink the kool aid? What happens to the days you pay for, but don't use?

Peter
Friday, August 13, 2004

"It is obvious how this saves them money, but why are they not figuring in the value of the employees work to the company?"

Allowing choices for more vacation time means employees are more rested and less likely to burn out or get fatigued.  It also helps retention, thereby saving on recruiting costs.  Combine that with the fact that these "bought" days are effectively unpaid leave, and there isn't much net loss to the company, if any.

NoName
Friday, August 13, 2004

+++
Buying the days = it comes out of your pocket.
Getting docked the days = it comes out of your pocket.+++

but buying the days means that the docked pay is distributed over the entire year, which may be 26, 52, 12 pay cycles instead of one big chunk in the middle of the month (a week's pay) being unpaid.  I don't know about you, but I don't have multiple thousands of dollars in the bank to allow me to coast through one or more unpaid pay cycles.

muppet
Friday, August 13, 2004

Peter,

Yes, whether you get docked or you buy the days it is the same thing - your pay is being  deducted for days you take off, but your pay is not increased when you work extra hours.

Under federal employment law, this practice is illegal, and has been for decades.

Scott
Friday, August 13, 2004

Well, then an awful lot of corporations are taking an awfully big risk, because it's happening all over.  Personally, I quite enjoy having the option.

muppet
Friday, August 13, 2004

The thing is that the legal alternatives are better:

1. Get paid hourly and pay to take time off. This means that you get paid time and a half for those extra hours you work. With each hour of overtime, you can buy 1.5 hours of vacation. This is better than the GM plan for which you get paid $0 for each hour of overtime and can buy 0 hours of vacation.

2. Be a salaried professional employee. A salaried employee can take days off in the week and can not have their salary deducted because of it. This is very convenient. if you can accomplish a weeks work in one day, then do so and take the rest of the week off. Your salary is the same as if you spent the rest of teh week playing video games or net shopping at work.

Scott
Friday, August 13, 2004

Scott -

If you can find an employer who will be satisfied with the fact that you can do a week's work in one day, and allow you to have the rest of the week off without arguing that a week's work is a WEEK'S work, regardless of throughput, let me know.  I've been looking.

muppet
Friday, August 13, 2004

Scott said: "The issue is that under federal employment law, if your pay is reduced for time you take off, you are not on salary."

This seems incorrect. For instance, if you take unpaid leave under the Family and Medical Leave Act, does that mean you're not salaried, since "your pay is reduced for time you take off"?

I've looked into this some, and my understanding of it is different.  I think the US law actually states that a salaried employee must be someone who gets paid based on *days* worked, rather than hours worked. So, if you leave an hour or two early, then you still get paid for a whole day. But, if you take a whole day off, then that's a "vacation" day, or unpaid leave, etc.

Exception guy
Friday, August 13, 2004

It's pretty typical for a lot of professional occupations to only work one or two days a week:

1. University Professor
2. Neurosurgeon
3. Executive

As you know though, developers are usually treated as unskilled factory workers when it benefits the company (deducting for days vacation) and as college educated professionals when it doesn't (paying overtime).

This situation could change at any time that developers decide they are dissatisfied with the situation and want to organize, as many other professional classes have done. I'm not holding my breath for that day.

Before I started my own company, I did contract work which basically amounted to the same thing. Do my own thing 5 days out of the week, and do a couple of hard programming sessions each week over a 2 day period.

Scott
Friday, August 13, 2004

Hi exception guy,

Yes, there are specific federal acts that also must be followed.

The actual legal rule on salaried employees is that it goes by the week. If you work for any part of the week, monday through friday, even for 15 minutes, you must be paid for the entire week if you are salaried. An employee can not deduct because you took time off for any reason as long as you did some work, no matter how little.

Scott
Friday, August 13, 2004

Programmers will never organize not simply because they're apathetic (they are) but because there is a glut of programmers in the market (skill has little to do with employability many places), and plenty of them are willing to take the jobs that you walk off of if you decide to strike.  I can't see how it can be done without massive loss of jobs without guarantee of reward.

muppet
Friday, August 13, 2004

Actually there is a big shortage of programmers on the market. This is due to reduced enrollments - universities are simply not generating enough graduates! More H1B visas are needed before america looses its compititive edge.

See http://www.azcentral.com/arizonarepublic/opinions/articles/0802mon1-02.html for more about this ongoing problem.

Tim Jones
Friday, August 13, 2004

"Under federal employment law, this practice is illegal, and has been for decades."

Nope, Scott, they can dock your pay if you miss a full day, but not a partial day.

Mr. O
Friday, August 13, 2004

Tim Jones -

Bunk.  Get laid off and then try to find a programming job in the US.  Have fun looking for 6 months or more.

muppet
Friday, August 13, 2004

If there were a huge shortage of programmers, I'd be getting recruited like my R.N. girlfriend does, with offers of sweet vacation benefits, flowers at my door, gift certificates to restaurants.. etc..

it'd be dot bomb all over again.

muppet
Friday, August 13, 2004

Mr. O,

If your pay is docked for missing a full day, or if you pay is docked for missing a few hours, then under federal law, you are not a salaried employee, you are hourly and must be paid overtime.

Scott
Friday, August 13, 2004

Sorry, the shortage of qualified workers is a known fact. Get used to it.

Tim Jones
Friday, August 13, 2004

Tim Jones -

a known fact?  Cite some examples outside of an opinion column.  You're a lunatic.

muppet
Friday, August 13, 2004

Tim Jones, are you really stupid, or are you trying to wind us up? Employers whinge about shortages every chance they can get, as an excuse to import foreign workers. This keeps our wages low and ensures we could never do anything like go on strike ( which was referred to above.)

Learn to read more critically, my boy.


Friday, August 13, 2004

* * ATTENTION * *

IT WILL NOW COST $0.10 PER POST TO POST TO THE JOEL ON SOFTWARE FORUM.

You've been freeloading long enough.

www.MarkTAW.com
Friday, August 13, 2004

"IAC, I wouldn't trust a news article like this to get these kind of details right."

I'm curious how much time one saves by not typing out "In any case."

"I don't know about you, but I don't have multiple thousands of dollars in the bank to allow me to coast through one or more unpaid pay cycles."

I do, muppet.  You're overspending.  Making $250 a week on unemployment, my bank account is at the same level it was four months ago when I lost my job.  (I have a new one now.)

And yes, Tim Jones is pretty obviously going for a windup.  Looks like he's succeeding, too.

Kyralessa
Saturday, August 14, 2004


"Purchasing vacation"

Groovy new HR term for unpaid leave beyond your vacation time.

A huge company like GM probably has a staff of 25 just to give everything a new name once a year.

..
Saturday, August 14, 2004

Exception Guy -

The exact definition of "working" is very tricky for salaried employees.

A very strict interpretation of the labor law would have it that if you are paid, say, "$1500 a week", then you get $1500 a week, even if you don't show up for work. Your employer can dismiss you for not showing up, but you get that money till you do get terminated.

The workable compromise is that a salaried employee is paid for each day they report to work.

It sounds like the GM policy is to get around worries on this issue - that somehow the salaried employees would be reclassified as hourly.

And that has happened at companies that get a little too intense about docking their programmers for coming in late, etc. If you have to keep track of hours worked (as opposed to hours per activity for accounting but notfor payroll), then you ARE an hourly employee.

Exempt means exempt from timekeeping for payroll.

Not a labor lawyer but that's my understanding.

..
Saturday, August 14, 2004

"If you can find an employer who will be satisfied with the fact that you can do a week's work in one day, and allow you to have the rest of the week off without arguing that a week's work is a WEEK'S work, regardless of throughput, let me know.  I've been looking. "

Wrox Press.

Oh, they went bust didn't they?

Mr Jack
Tuesday, August 17, 2004

Wait a minute...let me get this straight.  Not only are you NOT paid for not working but you pay your employer for not being there?!?.  Sounds kind of like a double dipping scheme to me.  I could understand not being paid for not being there and maybe reimbusing for cost of benefits but purchasing time off is just plain silly.  I AM missing something right?

Greg Kellerman
Thursday, August 19, 2004

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