This is longer than most posts, but I’m new at it. hope etiquette is OK…
I understand you are interested in rolling unused vacation into something useful like a 401k or banked sick time. I have never heard of rolling unused vacation into a 401k. I do know of companies who roll their unused vacation into a sick time bank- but NEVER with a Use or Lose policy- it goes against the definition of the term - to me….
I would suggest backing up and look at the issue causing the available vacation over run and why the original policy was THOUGHT to be set up as use or lose….
To me, the companies I know with “use or lose” vacation policies do so for some reasons I’ll mention below:
1. to either force employees to take time off and prevent burnout like with nurses or heavily OT weighted operations, or
2. to prevent the accumulation of 75 ++ calendar days at 8 hours a day for 600 hours that have been squirreled away over the last 15 years . example.. like teachers who can go on sick leave, then immediately roll into retirement, or
3. to prevent low paid - or high paid for that matter from percieving their unused vacation as a “bonus” that will be paid out at the end of the year in some way. ie, they include vacation into their total compensation package from a $$ perspective- not REST perspective.
more reasons too..
So, why is there unused time? That’s what I would seriously look at first. You can REQUIRE employees to take their time off - OR LOSE IT- like your policy dictates. If you find the policy needs changing, don’t wrap the 401k into it so soon. Keep them separate.
SURE, you’ll have a few people who say- I don’t need a vacation, so I’m coming in anyway,
nobody can do my job, like me, so I’m coming in or things will be a mess when I get back,
I’m so busy - If I take time off, I’ll never get ahead,
And the excuses go on. If these people were hit by the bus today, the business would still operate- so send them home to sit on the porch, go fishing, play with kids or take a long deserved trip abroad - alone.
Hope this helps..