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Transitioning Vacation | Leave Program Changes

Employees will continue to accrue their vacation, sick and personal days under the current programs until the new leave program begins in January 2024. Employees will not lose accrued balances when we transition to the new leave program. When the transition to the new plan occurs, employee’s existing vacation accruals will be treated as outlined below. See details on how sick and personal accruals will be transitioned on the Leave Program Changes webpage.


Three-Year Plan

On January 1, 2024, all employees with accrued vacation time will see their existing balance banked and then converted to PTO or paid out, depending on their balance. The first 10 days (80 hours) is converted to PTO. Balances above the 80 hour threshold are paid out in 80-hour increments through 2026.

Vacation Balance at Transition 2024 2025 2026
0-80 hours
(0-10 days)*
  • All days convert to PTO
  • No action, entire balance converted in 2024
  • No action, entire balance converted in 2024
81-240 hours
(11-30 days)*
  • First 10 days convert to PTO
  • Up to 10 days paid out
  • Remaining vacation banked and available to use
  • Remaining vacation is paid out
  • No action, entire balance converted or paid in 2024 & 2025
241-352 hours
(31-44 days)*
  • First 10 days convert to PTO
  • 10 days paid out
  • Remaining vacation banked and available to use
  • Up to 10 days paid out
  • Remaining vacation banked & available to use
  • Remaining vacation is paid out

*Hours will be prorated for employees working less than 100% FTE. Payout follows employees rate of pay at the time hours are paid out.

Example: 104 hours (13 days) accrued vacation

2024 2025 2026
  1. Convert - First 80 hours (10 days) of unused vacation converts to PTO
  2. Pay out* - Next 24 hours (3 days) of unused vacation paid out
Balance fully converted/paid out; no action taken

Balance fully paid out; no action taken

* Payout follows employees rate of pay at the time hours are paid out.

 

Example: 208 hours (26 days) accrued vacation

2024 2025 2026
  1. Convert - First 80 hours (10 days) of unused vacation converts to PTO
  2. Pay out* - Next 80 hours (10 days) of unused vacation paid out
  3. Remaining balance - Remaining 48 hours (6 days) Banked and available for use
  1. Pay out* - Up to 48 hours (6 days) of unused vacation paid out
Balance fully converted/paid out; no action taken

* Payout follows employees rate of pay at the time hours are paid out.

 

Example: 352 hours (44 days) accrued vacation

2024 2025 2026
  1. Convert - First 80 hours (10 days) of unused vacation converts to PTO
  2. Pay out* - Next 80 hours (10 days) of unused vacation paid out
  3. Remaining balance - Remaining 192 hours (24 days) Banked and available for use
  1. Pay out* - Up to 80 hours (10 days) of unused vacation paid out
  2. Remaining balance - Up to 112 hours (10 days) banked and available for use
  1. Pay out* - All remaining hours of unused vacation paid out

* Payout follows employees rate of pay at the time hours are paid out.

 

Banked Time

Vacation balances awaiting payout will be available for use. For example, an employee desiring a payout may use PTO before accrued vacation in order to save their accrued vacation for a larger payout. An employee desiring the time off may use accrued vacation before PTO allowing their PTO balance to increase.

Banked vacation time will be viewable in myHR or Kronos and listed separately from PTO. You may review current leave balances in myHR under "My Time" > "Leave/Comp Time." See the Time Reporter Training Guide (PDF, pg. 9) for step-by-step instructions. MU Health Care employees can check their available time balances using Kronos.


Payout Process

  • Issuing checks: Vacation payouts will take place each year as a single off-cycle check in February/March. Checks will be calculated using the employee's current rate of pay at the time the check is issued and deposited via direct deposit (same as a standard paycheck).
  • Included deductions and withholdings: Payout will be subject to deductions and withholdings for tax and retirement contributions, as well as any qualifying garnishments.
  • Excluded deductions and withholdings: Payout will not be deducted for benefit premiums, HSA or FSA contributions or campus-specific deductions (e.g., parking permits, United Way contributions, dining services, etc.).
  • Separating from the university: If an employee separates from the university and still has accrued vacation available, the remaining balance will be paid out. 

Payout for 2024

  • Check timing: Deposited as an off-cycle paycheck around February 7, 2024.
  • Retirement contributions: For contribution changes to take effect for the 2024 payout, timing is as follows. See "retirement contributions from vacation payout" section for step-by-step instructions and additional resources.
    • Change contribution between Jan. 19 – Jan. 25 by 5 p.m.
    • Adjust/return contribution between Jan. 26 – Feb. 1 by 5 p.m.
    • Contribution changes made during this time will also apply to bi-weekly employee payroll on Feb. 14, 2024.

Retirement Contributions from Vacation Payout

Employees can choose to change their contribution percentage for their 403(b) and 457(b) retirement plans to either increase, reduce or stop their contribution from the vacation payout.

Please note, employees who are eligible for university matching employer contributions under their core retirement plan who decide to reduce their retirement plan contributions for the vacation payout, should consider resuming their 457(b) allocations after the vacation payout to ensure they are taking advantage of their full retirement plan match.

To make changes, refer to the step-by-step tutorial (PDF). Fidelity Workplace Financial Consultants are also always available to university employees for free 1-on-1 financial planning.

Reviewed 2023-10-13