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Everyone loves daydreaming about a trip to Hawaii or taking some time off to spend with their family. To make those dreams a reality though, you first have to understand the different types of time off benefits that employers offer and how to manage your vacation account balance well.
Every Company Has a Unique Time Off Plan
All time off benefits enable you to continue earning pay even when you’re not working. Unlike with medical and retirement benefits though, there aren’t many government regulations dictating how businesses must structure their time off benefits. That means companies have a lot of freedom to create the type of plan that works best for their business operations and employees. It also means this is the benefit where you will find the most variation from employer to employer.
Here are some things to look for as you compare packages:
• The rules regarding the number of vacation days you accrue
• When your vacation days can be used
• Whether you can cash out, donate, or carry vacation days over from year to year
Set Categories vs. Flexible Paid Days Off
Some companies offer a set amount of time off for different categories, such as holidays, vacation, and sick time. There are then rules that dictate how you can earn and use days in each category.
Most healthcare employers, however, including AdventHealth, use a Paid Days Off (PDO) model because it works well with the 24/7 operating schedule of hospitals. This type of program lumps holidays, vacation, sick time and personal time all into one category/PDO bank. Each pay period, you earn a certain amount of time that gets deposited into your bank. (Typically, the longer you work for a company, the higher your accrual rate.) You can then use the balance whenever you want.
The advantage of having a PDO bank is that it gives you flexibility and puts you in charge of your time off. For example, if your schedule requires you to work on a holiday or you hardly ever get sick, you can save that time in your account and use it later.
Tips to Manage Your Time Off Account Balance
Regardless of what type of time off program you’re enrolled in, it’s important to manage your account balance so you don’t run out of paid time off. Here are a few simple steps to help you with this task.
1. Use your employer’s accrual schedule to determine how many vacation days you will earn each year.
2. Budget how you plan to use your vacation days. Remember to include time for sick days and other unexpected needs that may come up.
3. Be a saver! Try not to use up your time off as soon as you accumulate it. This is especially important in your first two years of employment, when delayed gratification will help you build up a cushion of PDO that you can use for emergencies. Everyone has their own ideal safety cushion, but I recommend saving at least two weeks, the period before disability benefits kick in. (More on that in a future post.)
4. But don’t save too much. We all need time for play and rest. Once you have your safety cushion in place, enjoy your time off without regrets.
Next Week: Life Insurance
In next week’s post, we’ll talk about life insurance, including how much you need and why you should have your own policy in addition to what your employer provides. Comment below if you have any questions you’d like me to address!