Should You Let Employees Carry Over Vacation Days?

Our American counterparts left tons of vacation time on the table before the pandemic, and, with everything shut down, many Americans didn’t see much point in taking their vacation time. As a result, requests dropped precipitously.

Canadians aren’t far behind when it comes to not taking time off. Employers will want to watch the US situation closely, especially as American workers are going to use all that postponed vacation time post-pandemic.

Vaccine rollout in Canada has been a lot bumpier, so we’re not looking at quite the same situation. We could see ourselves faced with an explosion in time-off demand this fall, next winter, or even as late as next summer.

That raises an important question for employers: Should you let employees carry over vacation days? We examine the pros and cons, especially in the current business environment.

Why You Should Let Employees Carry Over Vacation Days

There’s a good argument for allowing vacation days to be carried over right now. If employees haven’t used them to support themselves during shutdowns, you may not want them to use that paid time off after you’ve re-opened.

Your business could be facing a huge upswing as vaccination plans continue and lockdowns lift. Even if summer or fall is normally slow for you, there might be a boom.

With that in mind, you’d want to give employees the option to roll over their paid time off. Otherwise, your team members will have to “use up” their vacation days. That could leave you shorthanded during an upcoming boom.

Letting employees carry over their days right now may also help them “save up” for a longer vacation when the pandemic is over. They might be daydreaming about a month-long sojourn to Europe, which they couldn’t do if you won’t let them bank their days. Both you and your employees will be happier.

Why You Shouldn’t Let Employees Carry Over Vacation Days

There are a few counterarguments to letting your team members carry over their paid time off.

The first is that unused vacation days represent a financial liability for your business. If all your workers were to suddenly take all their vacation days, you’d need to pay them out—and you might not have the funds in the bank or be able to operate and make up the money.

Asking your team members to use their allotted days yearly helps keep your liability to a reasonable limit. Given the financial hardships facing a lot of businesses right now, that is a solid plan.

There’s another, even better reason to ask team members to use their allotted vacation days: mental health.

There’s a link between creativity and time off. Taking a break helps employees be more productive and creative in the office. While it might seem counterproductive at first, we should encourage people to take more time off, more often.

Regular time off has benefits for everyone, since it helps your employees relax, rejuvenate, and maintain their mental health. This reduces turnover, among other upsides.

What Should You Do?

It’s a tough question. Employees generally like having “bankable” hours. If you don’t let them roll their vacation days over, they may feel “pressured” to take time off, even if they don’t really want to.

That said, it’s a good idea to encourage your team members to use their vacation days annually. You may not want to introduce an “official” policy stating hours can’t be rolled over, but it is the best way to get people to take those regular breaks.

This summer, though, you might want to let team members defer vacation days, even if you normally don’t. Just be sure you’re adequately prepared for the financial liability of allowing people to roll over their vacation days.

Keeping track of employee vacation days, their goals, their benefit plans, and is easy when you have the right technology. Discover what the right solution can do for your business.