Welcome
When joining the Company, each employee receives a certain number of vacation days each year. In addition to this vacation time, during the annual open enrollment period, you have the option of purchasing up to five vacation days each year. You must complete at least a year of service by December 31 to be eligible to make this election during the annual open enrollment period. These additional days are available for use during the next calendar year.
To be eligible to purchase vacation days, you need to:
n Be a regular employee below the Director level
n Be scheduled to work at least 40 hours a week
n Have completed a year of service by December 31 of the current calendar year
n Purchase during the annual open enrollment period.
During the annual open enrollment period, you may also sell vacation days.
To be eligible to sell vacation days, you need to:
n Be a regular employee below the Director level
n Be scheduled to work at least 40 hours a week
n Have completed a year of service by December 31 of the current calendar year
n Sell during an annual open enrollment period
n Have at least 10 days of vacation available on January 1.
You will be notified during the annual open enrollment
period if you are eligible to participate in
this plan.
About
the Vacation Buy/Sell Plan
The Vacation Buy/Sell Plan is managed on a
calendar-year basis. This means that participation begins January 1 and ends
December 31 of each year. You need to reenroll in the plan each year if you
want to continue buying or selling vacation days.
You can buy up to 40 hours of additional vacation time in 8-hour increments. Or, if you have vacation time that you don’t plan on using and you would rather be reimbursed for it, you can sell up to 40 hours of your accumulated vacation time in 8-hour increments.
When
Participation Begins
If you are a new employee, you must complete
a year of service by December 31 to elect to participate in the plan during the
annual open enrollment period. You can enroll during the first annual open
enrollment period following the completion of a year of service or if you will
complete a year of service by December 31. Your coverage is effective the
following January 1. Because this enrollment occurs only once a year, there
will be a delay between when you complete the service requirement and the date
your participation begins.
If you don’t enroll during the first annual open enrollment period for which you are eligible, you can enroll during any subsequent annual open enrollment period.
Buying
Vacation
You can buy up to 40 hours of vacation time
in eight-hour increments. This means you can buy 8, 16, 24, 32 or 40 hours of
vacation time each year.
The cost of buying vacation is based on your annual base salary on a date designated by the Company, usually in August or September. The cost of one vacation hour is equal to your annual base salary converted into an hourly rate. The date used to calculate your hourly rate may change from year to year. The date used for the 1999 and 2000 plan years was September 1. Your annual cost for buying vacation, as well as the date used to calculate this cost, is shown on the Personalized Enrollment Information Worksheet you receive during each annual open enrollment period.
Your annual cost for purchased vacation is divided by 26 pay periods, and this amount is deducted from each of your paychecks during the calendar year. The payroll deductions are taken on a before-tax basis, which means you do not pay taxes on the amount you pay for purchased vacation. However, the pay you receive when you use purchased vacation days is taxable and subject to all the normal withholdings that are deducted from your regular paycheck. Deductions for your 401(k) Savings plan will also be taken.
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Important |
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Remember, once you have made
an election to buy vacation time, |
Using
Your Purchased Vacation Time
Once you have purchased vacation time, there
are a few rules you need to keep in mind:
1. Under IRS rules, purchased vacation time must be used after you have used all your regular vacation days.
2. Purchased vacation time must be approved in advance by your supervisor just like regular vacation.
3. Purchased vacation time cannot be used to sustain pay during an extended illness or absence due to injury.
4. You must use all purchased vacation time by December 31 of each year. Under IRS rules, purchased vacation time that is unused at the end of the calendar year will be forfeited.
5. You must use purchased vacation time in at least two-hour increments.
Selling
Vacation
Just as you can purchase vacation time, you
can also sell vacation time in 8-hour increments, up to 40 hours a year.
The cost of selling vacation is based on your annual base salary on a date determined by the Company, usually in August or September. The cost of one vacation hour is equal to your annual base salary converted into an hourly rate. The date used to calculate your hourly rate may change from year to year. The date used for the 1999 and 2000 plan years was September 1. Your annual cost for selling vacation, as well as the date used to calculate this cost, is shown on the Personalized Enrollment Information Worksheet you receive during each annual open enrollment.
If you elect to sell vacation, you will receive a lump-sum payment, usually in your second paycheck in January. The payment is considered taxable pay and all applicable federal, state and Social Security (FICA) taxes will be withheld. Deductions for California State Disability Insurance (SDI) and your Retirement Savings Plan will also be taken.
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Important |
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Remember, once you have made
an election to sell vacation time, |
Effect
on Other Benefits
When you participate in this Plan, your taxable pay will be reduced if you buy vacation or increased if you sell vacation. Your other benefits will not be affected by your participation in the plan.
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Your ERISA Rights |
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Your rights as a participant
in the Company’s benefits program are protected by the Employee Retirement
Income Security Act of 1974 (ERISA).See the Plan Information |
If
Your Employment Status Changes
If you go on an unpaid leave of absence (such as disability leave), terminate employment or retire, and the Company has deducted more from your pay than the cost of the purchased vacation you have used, you will receive a lump-sum payment as taxable income for the unused vacation hours.
If, on the other hand, the purchased vacation time you have used is greater than what has been deducted from your pay, the Company will deduct the remaining amount from your final paycheck when you leave the Company or if you take a leave of absence. Following a leave of absence, you can re-elect vacation time under this plan during the first annual open enrollment period after you return to work.
For example, let’s assume you buy 16 hours of vacation and leave the Company at the end of June. The Company will have deducted from your pay the cost for the first 8 hours of purchased vacation.
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If you have used |
The Company will |
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4 hours of purchased vacation |
Give you a taxable lump-sum payment for the cost of 4 hours of purchased vacation |
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12 hours of purchased vacation |
Deduct the cost of 4 hours of purchased vacation from your final paycheck |
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Important! |
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This SPD is intended to be easy to use and understand. This binder contains only highlights of the Company benefits program. The Plan Documents contain the details of the plans. This SPD does not replace the official Plan Documents that legally govern the operation of the plan. If there is a discrepancy between this SPD and those documents, the documents will govern. Copies of the Plan Documents can be obtained from Employee Benefits. In all cases, benefits will be paid according to the terms of the plans. The Company or plan administrator has the right to interpret the plan and to exercise discretionary authority. The Company intends to continue these plans, but reserves the right to amend, modify or terminate any plan or benefit, in whole or in part, at any time, or to modify eligibility requirements. You will be notified if any material changes are made to the plan or if the plan is terminated. Your eligibility for, or your rights to the benefits under the plan, cannot be interpreted as a guarantee of employment. The Company makes employment decisions without regard to the benefits it offers as part of your total compensation. |