2008 sick and vacation time "buy-back" program

We have recently learned that our sick time and vacation "buy-back" programs are NOT in compliance with Internal Revenue Service (IRS) tax laws.  We were advised by our tax attorney that if we did not modify our "buy-back" programs, our members would be at risk of owing back taxes and fines to the IRS. 

In response, we had several meetings with RI Hospital administration, and have reached an agreement to modify our "buy-back" programs in a way that complies with IRS regulations AND preserves our rights.  These changes will NOT affect sick time and vacation "buy-back" for 2007.  The changes starting in 2008 are as follows:

Vacation sell

• In order to sell unused vacation time in 2008, you must indicate your intention to do so in writing prior to the end of 2007.  (The Hospital will be providing you with a form for this purpose.)
• The only vacation time that you can sell in 2008 is the time that you accrue in 2008.  You cannot sell time that has been accrued in prior years; however, you can still use or carry-over time from prior years.
• In order to sell unused vacation time in 2008, you must have an amount at least equal to your standard hours (but not less than 16 hours) already in your vacation bank at the time the election is made.
• The minimum amount of vacation that can be sold is eight hours. 
• The maximum amount of vacation that can be sold is: 
• for employees with less than 10 years of service:  two times standard hours or 40 hours, whichever is greater
• for employees with more than 10 years of service:  three times standard hours or 40 hours, whichever is greater
• You may elect to receive pay for unused vacation accruals in the first pay period following May 15 or November 15, provided you have accrued the time at that point.
• Once you elect to sell vacation time in 2008, you cannot use vacation hours that are accrued in 2008 until you have accrued the amount of time that you have elected to sell.
• Once you decide to sell unused vacation time, you cannot change your mind about the amount or date.
  

Sick time sell

• In order to sell sick time in 2008, you must indicate your intention to do so in writing prior to the end of this year.  (The Hospital will be providing you with a form for this purpose.)  For employees who elect to sell sick time:
  • Employees who use NO sick hours in 2008 will be paid for 100% of their unused 2008 sick hours.
  • Employees who use less than half their accrued sick hours in 2008 will be paid for 80% of their 2008 unused sick hours.
• Once you decide to sell unused sick time, you cannot change your mind, and you will be paid in February of 2009 for all unused sick time to which you are entitled.