BUYING Your Days Off

[filkertom]

This just makes me nuts:

Salaried workers at General Motors Corp. can buy up to five extra vacation days this year for $175 a day, a plan the No. 1 automaker says is designed to save millions of dollars and boost morale.

GM also let white-collar employees buy extra vacation last year. Part-time employees may purchase up to three days. The company would save $34.4 million if every eligible worker took full advantage.

"It's a cost savings for us," GM spokesman Kerry Christopher told The Detroit News for a story Thursday. "But offering more vacation days is something employees really appreciate."

[snip]

GM has reduced its U.S. salaried work force to 39,362 this year, mainly through attrition.

The automaker detailed the offer in an e-mail to employees last week. Workers have until Friday to accept.

The offer is especially popular with employees who have worked for GM less than five years and who receive two vacation weeks a year.

Now, if this is a reimbursement system -- you put in your day's pay now, you get it back when you take the vacation day -- I have less than a problem with it.

But if not....

From the last line of the Detroit News story linked above:

There is one drawback for companies that offer extra time off, says Mellon HR’s Ray Lundsten. They have to find someone to do the work in the employee’s absence.

Under the old system, if you scheduled extra days off, the company had to cover for you and you didn't get paid. Under the new system, the company has to cover for you and you pay them.

Tell me I'm reading this wrong. And tell me the unions aren't stupid enough to let them get away with this. Please.

Comments

[huskiebear.livejournal.com]

The way I read it, this is for salaried employees only, which basically means that they're paying back their days wages (about $21/hr) for the extra days off. No different from an hourly worker taking an extra day off and not getting paid.

[holzman.livejournal.com]

It's pretty consistent in the context of a salaried position. Vacation days are cash -- if I quit my job and I have a day's vacation unused, they're required to give me a day's pay for it when I leave. This just lets me turn a day's pay into a day's vacation.

Youre going to love this observation:

[scruffycritter.livejournal.com]

$175 (pre tax) a day is cost effective only if you earn more than 45.5K a year...

The only difference between buying the day off and not is that you give the company an interest free loan. If you work there and earn less than 45.5K, just take the day off without pay.

[billroper]

I don't think that the salaried employees are generally unionized, although I could be wrong about that. In any case, for employees who have more money than time off, this is a good deal. And they're not being forced to do it, as opposed to being told to take unpaid time off, so I can't see there being any real cause to object to the plan.

[filkertom.livejournal.com]

Well, it's certainly looking like I'm on the short end of this one. :) And that's okay. I can see the idea having merit.

The execution matters for a lot, though. And the trend still bothers me. They used to have sick days and vacation days; then they came up with CTO (combined time off), which were more flexible in theory but in practice made it too easy to give up vacation days one at a time because of illness. They used to have dental and optical coverage; now those are electives that you usually pay for, if they're available at all.

But corporate profits are up.

[tigertoy.livejournal.com]

The $175 figure is not a flat rate, it was just used as an example of what some workers paid. The implication is that you pay the company back your day's pay for the extra day of vacation. It's almost the same as negotiating a lower salary in exchange for more vacation days (a deal which I would have gladly accepted at any company I've ever worked for that had a set policy of how many days off you got); the only problem I see is that you probably have to pay taxes on the day's pay and then pay it back with after-tax money. So the worker is getting screwed in a small way by the government.

Tom, you're right in general that most of the changes in employee compensation have screwed the employee lately, but what the article describes here is great for the employee.

The only thing I saw in the article that was maybe a little funny was that it described the Ford plan as letting you buy extra vacation days with money in your flexible spending account. This would suggest that healthy single people get more vacation time than people who are paying for dependent care or people who have extra health expenses. To some extent, this is correcting the existing discrimination against single people (why should a worker get paid more when he gets married and more again when he has kids?), but if the unfairness is evened out by letting the single people have more vacation, it probably works out to make people unhappy in the long run. Many of the single people would probably prefer more money to more vacation, while the ones with families probably resent that they get less time off. The critical question, which the article doesn't answer, is whether the individual worker can choose how much money goes into the flexible spending account, or if it's a fixed amount regardless of how much money you needed to use out of the account.

[billroper]

I recall that the FSAs where I work were limited to $7500 per year when I needed -- for reasons of upcoming uncovered medical expenses -- to maximize the amount that went in there. Since the days are being purchased using FSA money, they're using pre-tax dollars, not post-tax dollars, so they're not even getting screwed by the government.

Such a deal! :)

[tigertoy.livejournal.com]

Yes, using pre-tax dollars is a win -- though having to decide at the beginning of the year if you're going to use the extra vacation might be hard on some people. As long as the employee has control of how much money goes into the plan.

Different companies have different kinds of plans that get lumped into the same bucket, and I think there are some that give you a set amount of money you can spend on the benefits, rather than letting you choose how much to spend.

[(Anonymous)]

FSA amounts for both medical and dependent care are determined by the individual .. the only catch is that if you do not use the money in the account ... it goes away ... this is how the govt allows it to be pre-tax. There are other stipulations that I can not remember --- have not used on since the kids were in daycare.

I wonder how Ford is allowed to use this money for purchasing vacation days ... unless the taxes are nulled somehow ...

However, being in the auto industry ... I doubt that anyone is complaining about this sort of arrangement ...

And yes, Tom, you are right --- CTO sux .. Had it once ... what a scam.

any