Just when I am considering taking some well-earned annual leave, I get landed with yet another joint venture to deal with. Local HR seems to be getting all stressed about the new location’s benefit plans and I must do a benefits inventory and comparison to existing plans.
Really, it seems quite straightforward. It has a normal pension plan and a few related insured benefits. Its pension contributions are a lot higher than ours, but then our scheme is well below market, as I have been complaining about for some time. If we want to harmonise, I recommend increasing the legacy plan to match the new location. Let’s face it, there is no simple way to remove benefits in Europe, not to mention Tupe regulations and the works council requirements.
I meet with the regional HR director to try to figure out what the fuss is all about. I go through my analysis, and he nods at all points. So, the problem is? Leave, he says. For a moment I think he is telling me where to go, but then the penny drops. Ah, he means annual leave. I am embarrassed to admit I had not looked at that. Annual leave policy is managed from the US and is not really part of my remit. The new team all get months and months of leave, he says, incredulous. Really? Ok, I will investigate.
Getting to grips with leave
Reviewing the due diligence on the new company, I find there are indeed multiple buckets of leave. There is the usual statutory leave and public holidays, and six extra days of ‘contractual leave’ which I guess it was offered over and above the statutory days. We offer extra days too, but only a couple. Then it does get a bit surreal. It has extra service-related days which increase quite dramatically after 10 years of service. I look at the demographics of the employees concerned. They all have at least 10 years’ tenure. Oh. And then there are the sick holidays. Eh? It seems the transferring company offered extra two days every quarter if people did not call in sick. Weird.
And then there is carry over, the HRD tells me. There are strict rules about carry over of statutory leave, but its workers council had built in additional varying carry over rules for each of the categories of leave. Oh please. This is making my head hurt. Oh, and staff get two ‘bridge’ days. I am not even sure what that is, but I learn that bridge days are given when there is a single day between a public holiday and the weekend. We do not typically pay for these, so people take them from their annual allowance. When I add it all up, some of the new employees are getting close to a month more holiday than our other Dutch employees. Hm. The problem is: to remove any holiday we would have to buy them out, which would add pension and bonus costs.
Allowing staff to buy holiday
To make things worse, there are some days that come across with the transfer and some that the employees were forced to cash out from the old company. As part of the joint venture terms, it has been agreed that we will allow them to buy back those holidays with their first payroll so that they do not suffer the tax consequences of the extra cash. We could not have made things more complicated if we tried.
My colleague in the US who deals with annual leave is in a state. How do we know how many days to add to the HR system? How do we work out what the employees can buy back? What if they ask for more days than they had? I can see the point of this last question. If there is one thing I have learned, it is that people will always look to maximise their benefits in these situations. She should be able to work it out from the information already provided, but she cannot.
Questions from payroll
A colleague in payroll is also pinging me. She has heard that we will deduct amounts from the employees for the holiday buy back, but she does not know how much to deduct. I have a spreadsheet of the holidays ‘sold’ by the old company, but whatever the deal document says, we cannot just deduct amounts without permission from the employees. My colleague in the US should be handling this, but it will take too long to explain so I quickly send out a link to a file where the transferred employees can say how many holidays they want to buy back. Payroll is still not happy. It seems the holidays sold before transfer were listed in hours, but we only work in whole days. Neither my US colleague nor payroll seem to be able to work it out. Sigh. Am I the only one who brings my brain to work?
I check all transferees work full-time and confirm their daily work hours, so we just need to divide the number of hours by eight and round up to the nearest whole day. I pop in a box to show the number of days requested and a check it was not more than they are entitled to. I clearly mark the amount to be deducted from payroll in bold. In short, I do all the work for them. I send the spreadsheet to my colleague in the US for them to add the holidays to Choreday, our HR system.
It is a couple of months later when I get pinged by payroll again. One of the employees is complaining he cannot see the holidays on the system. I look him up. Sure enough, the days have not been added to the system. Aaagh. Do I really have to do everything myself?
Next time…Candid completes benefit surveys