Vacation AccrualDSL for Service Centers

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Vacation Accrual/DSL for Service Centers

• August 19, 2004
• Sara Bible

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Vacation Accrual/DSL Topicsfor Service Centers

• The Basics
• Funding the Beginning Vacation Balance (pre
  9/1/03)
• Vacation Accrual Forecast and Budget

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Vacation Accrual Definition

• A financial vacation accrual allows us to build
  up funds to pay staff while they are on vacation,
  thus recognizing this cost as it is earned
• Similar to staff members saving money toward
  their own vacation trips, Stanford needs to put
  aside money to pay their salary when they are on
  vacation

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Vacation Accrual Definition

• Allows us to charge the full cost of the person
  to the account/project (PTA) that benefits from
  their effort. Full cost includes
• Salary
• Vacation benefits earned (money to pay it in the
  future)
• Fringe benefits
• For example, if a person earns 4 weeks of
  vacation in a year, but only took 3 weeks off
• the University has received one weeks more work
  than it was entitled to, and
• that cost should be reflected and money put aside
  to pay for the future vacation

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Change in Policy

• The University began recording a financial
  accrual for vacation on September 1, 2003
• The University included a small component to
  cover Disability Sick Leave (DSL) in the vacation
  accrual rates negotiated with the Office of Naval
  Research
• This financial accrual affects every account
  (Project/Task/Award combination) to which
  vacation-eligible staff salaries are charged
• Not applicable for faculty, students, or others
  who do not earn vacation per Stanford policies

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Vacation Accrual/DSL Rates

• FY04 rates - averages for the entire University
• Exempt 8.65
• Nonexempt 7.45
• Bargaining Unit (currently same as nonexempt)
  7.45
• FY05 provisional rates
• Exempt 8.8
• Nonexempt 7.4
• Bargaining Unit (currently same as nonexempt)
  7.4

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Funding the Beginning Vacation Balance (pre
9/1/03)

• Pre 9/1/03 vacation balance vacation earned and
  not taken prior to 9/1/03
• Must be funded when an employee
• Changes departments (or service center)
• Leaves the University
• or
• If School policy requires early funding

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Funding the Accrual Balance Early

• Early funding can only be done person by person
• Must fund the entire unfunded balance for the
  person
• Can selectively choose which employee balances to
  fund
• Store the accrual amount in your departments PTA
  until June or July to insure that the service
  center does not exceed 5 or 15 break even

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Funding the Beginning Vacation Balance (pre
9/1/03)

• Amount to be funded equals
• Pre 9/1/03 vacation hours X current hourly rate
• Service Center may fund the pre 9/1/03 balance as
  long as the center does not exceed the 5 or 15
  break even maximum
• If maximum is exceeded the pre 9/1/03 balance
  will need to be funded with unrestricted or gift
  funds

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Vacation Accrual Forecast and Budget

• Annual salary comprised of time working plus
  vacation accrued for a year
• Example
• 48 weeks of work 4 weeks vacation 52 weeks
• All University entities budget for 52 weeks of
  effort
• Not 48 weeks of effort plus the vacation accrual
  rate

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Vacation Accrual Forecast and Budget

• Service Centers should continue to forecast
  employee hours net of holidays, vacation days,
  and PTO
• Example 2080 hours for a 100 employee
• Less
• Vacation 160 hours
• Holidays 88 hours
• PTO birthday 32 hours
• Result Employee working in service center 1800
  hours/year
• Do not budget to fund pre 9/1/03 vacation balance

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What if my service center employees dont take
their vacation?

• Encourage and enable your staff to take vacation
• If they dont, your service center will be
  under-recovered (over budget)
• OPTION
• Budget for temporary services to either
• Fill in for your employees while on vacation
• Offset the vacation accrual amount if your
  employees are not taking their vacation
• Warning Temporary services will accrue a lower
  fringe rate budget accordingly

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More questions?Policy Sara Bible
5-1712 Christine Siu 3-9063 Ken Schulz
5-1733Specific Service Centers Daron Chan
5-7549 Steve Lally 5-7906 Christine Siu
3-9063 Nancy Walsworth 5-7437