August 9, 2014 9:56 PM Subscribe
Why is a company making all employees to take a paid vacation?
posted by miyabo to Work & Money (23 answers total) 1 user marked this as a favorite
A friends' company is forcing all its employees (tens of thousands) to take vacation time during a specific week this year as a special one-time action. They will use up vacation days, but they will still get paid (as long as they have vacation days -- otherwise unpaid).
I realize this is legal in the US, but I don't understand the motivation. It's not a furlough, exactly, since vacation days cannot generally be used on furloughs. What is this called?
It seems to me this will have an almost negligible impact on the company's cash flow, since most employees have more than enough vacation days to cover the week, and will shift their other planned vacations into that time.
So I can think of only two reasons for doing this:
1) The company wants to reduce stockpiled vacation days as a liability on its balance sheet (relatively benign). But this would be a fairly small effect, right? And wouldn't finance people be aware of this as a one-time gimmick?
2) The company is planning a massive layoff and wants to pay out less for unused vacation days to the terminated employees (worrisome). But this also would be a tiny part of the cost of a layoff, right?
Basically I don't understand how taking an action that will annoy a lot of people and not really save any money makes sense.