Handbook of Operating Procedures > Series 400 Budget, Finance and Operations > 4.18.3 Vacation Leave

4.18.3 Vacation Leave

A. Purpose

The purpose of this Policy is to provide for the administration of vacation leave for Employees in compliance with Regents’ Rule 30201: Leave Policies.

B. Persons Affected

This Policy applies to all Employees appointed to work at least twenty (20) hours per week for a period of at least four and one-half (4 ½) months. Faculty appointed to work less than twelve (12) months during the year are excluded from this Policy. Students employed in positions that require student status as a condition of employment are NOT eligible for vacation and, therefore, not covered by this Policy. 

C. Definitions

1. Continuous employment: The Employee is paid a regular state salary for the period, with the exception that continuity of employment is not interrupted if the Employee is placed on leave without pay for less than one (1) calendar month (i.e., a full calendar month of leave without pay does NOT count toward state service nor towards vacation accrual).
2. Separation: Separation includes but not limited to leaving one state agency to work for another, provided at least one workday passes between those employments; and moving from a position in a state agency or higher education institution that accrues vacation leave to a position within a state agency or higher education institution that does not accrue vacation leave if the agency or higher education institution agrees to pay for the employee’s accrued vacation balance will be reinstated.
3. State service credit: An employee accrues lifetime service credit for the period in which the employee serves as a full-time, part-time, or temporary state employee or otherwise serves as an employee of the state of Texas or as an employee of a state institution of higher education.

D. Policy

D.1. Accrual Guidelines

1. Vacation allocation.
   1. Hourly vs. salaried Employees. Vacation leave accruals for full-time Employees are the same whether they are hourly or salaried Employees.
   2. Part-time benefits eligible Employees. Part-time benefits eligible Employees are also eligible for vacation leave, but their accrual rate is proportionate to the number of hours they work. 
   3. Amount accrued. The amount of vacation leave an Employee accrues is determined by the Employee’s length of state service. To determine an Employee’s length of state service, actual days, months, and years of total state employment count. 
   4. Multiple state employers. Employees who are employed by multiple state agencies or higher education institutions may not accrue vacation leave at a rate that exceeds that of a full-time Employee.
   5. End of accrual. Accruals of vacation leave end on an Employee’s last day of duty, which is an Employee’s last physical day on the job.
2. Higher accrual rate credit. Credit for the higher rate of vacation will be given on the first calendar day of a month only if the Employee’s anniversary falls on that day. Otherwise, the increase in vacation accrual will be given on the first calendar day of the following month.
3. Accrual date. Employees begin to accrue vacation leave on their first day of employment and on the first calendar day of each subsequent month of employment.
4. Partial month. An Employee who works any part of a calendar month accrues vacation for the entire month.Ineligible status. If an Employee is on leave without pay for a full calendar month (except for an Employee returning from military leave without pay under Texas Government Code, 661.904: Military Leave During National Emergency), that month is not counted in computing total state service credit for the purposes of vacation leave accruals.
5. Paid Leave. If the Employee is on any type of paid leave that extends into the following month, the Employee’s accrual of leave will NOT be posted until the date the Employee returns to duty, which means the employee may not take vacation leave accrued for that month until the Employee returns to work. An Employee forfeits this accrual if they do not return to duty.

D.2. Leave Accrual and Carryover

1.    Leave accrual and carryover. Employees accrue vacation leave and may carry it forward from one fiscal year to the next in accordance with the following schedule:

2.    Maximum carryover guidelines.        

a.    Subjects to limits. The amount of allowable carry over hours depends on the Employee’s length of state service, as indicated above. Part-time Employees may carry over unused vacation leave, proportionate to the number of hours worked.

b.     Unused hours. All vacation leave hours in excess of the maximum allowable carryover remaining at the end of a fiscal year will be credited to the Employee’s sick leave balance effective on the first day of the next fiscal year.

D.3. Vacation Utilization

1. Continuous employment. Vacation leave may NOT be taken until the Employee has been employed with the state for six (6) continuous months, although vacation leave is accrued during that period.
2. Re-employment. An Employee who has previously completed six (6) months or more of continuous state employment and then leaves state employment is entitled to take vacation leave as it is earned upon reemployment in an eligible position with the University. Additionally, an Employee who returns to state employment following military service is entitled to have their vacation leave balance restored.

D.4. Vacation Leave and Employee Transfers and Separations

1. Employee separations. Employees who have accrued six (6) months of continuous state employment are entitled to be paid for the accrued balance of the Employee’s vacation leave as of the date of separation, if the Employee is not re-employed by a state agency or higher education institution in a position that accrues vacation leave during the 30-day period immediately following the date of separation from state employment.
   1. Holiday hours. Upon separation, lump-sum payments for accrued but unused vacation leave will include payment for any holidays that the Employee would have observed had the Employee remained on the payroll. Eight hours per holiday will be added for Employees who are normally scheduled to work 40 hours per week. Employees who are normally scheduled to work less than 40 hours per week will receive a proportionate payment. An Employee moving to a position in a state agency that does not accrue vacation leave is not entitled to added time for holidays that fall within the accrual period. In no case is the Employee entitled to receive longevity or hazardous duty pay for the accrual period.
   2. New position. When an Employee moves to a non-vacation accruing position, the accrued time will be paid out in a lump sum.
2. Employee Transfers.
   1. Employees who transfer directly from one state agency or higher education institution to another will have their vacation leave balance transferred.
   2. If an Employee separates from a state agency and is re-employed within thirty (30) calendar days by any state agency or higher education institution that accrues vacation leave, the Employee’s vacation leave balance will be reinstated.

D.5. General Guidelines

1. Unused balance. For those Employees separating employment or moving to a non-vacation-accruing position with accrued vacation balance eligible to be paid, the balance will be pulled from the applicable time and leave keeping system and validated prior to submitting to Payroll for payment.
2. Vacation taken after last day. A separating Employee may, with the written approval of the chair or Division Head and the concurrence of the respective executive, be allowed to remain on the payroll after the last day worked to utilize vacation leave up to the end of the month in which they resign. Any remaining vacation balance will be paid in a lump sum or have the option to defer as contributions into either or both a UTSaver TSA 403(b) Plan or a UTSaver DCP 457(b) plan.
   1. Employees will continue to receive all compensation and benefits that the Employee was receiving on the last day of duty, including paid holidays, longevity, and/or hazardous duty pay.
   2. Employees will NOT accrue any additional vacation leave or personal leave while remaining on the payroll to utilize such vacation leave, nor can such leave be used.
   3. Employees will NOT accrue any additional sick leave while remaining on the payroll to utilize such vacation leave. Employees may NOT remain on the payroll after the last day of work to utilize sick leave in lieu of being paid. Separating Employees will NOT be paid for unused sick leave. (see HOP 4.18.4: Sick Leave).
   4. The written approval to exercise this option must be provided to Office of Human Resources (OHR) prior to the effective date of the Employee’s termination.
3. Lump sum payments.
   1. Computation. Lump sum payments to Employees will be computed based on the rate of compensation of the last date of employment. The sum of the monthly base pay and monthly compensation are multiplied by 12 to determine the annual rate of compensation, which is then divided by 2080 hours to determine the hourly rate of compensation. For Employees who separate from employment while holding a position that does not accrue vacation, the employee’s payment will be computed by the Employee’s final hourly rate of compensation in the last position held that accrued vacation.
   2. Inclusions. Lump sum vacation payments will NOT include any hazardous duty or longevity pay. Such payments will include any compensation received in lieu of pay, such as car or housing allowances.
4. Deceased Employee. A deceased Employee’s estate is entitled to payment for unused annual leave if the Employee had at least six (6) months of continuous state employment at the time of death. The payment is based upon the Employee’s rate of pay at the time of death.
5. Vacation Leave Accruals and Retirees. Vacation leave accruals for return-to-work retirees are based on retirement and rehire dates. An Employee returning to state employment who retired from state employment on or after June 1, 2005, and who receives a state retirement annuity, accrues vacation leave based only on the Employee’s length of service earned after the Employee’s retirement date. Otherwise, the return-to-work retiree accrues vacation leave based on total state service.

D.6. Leave Requests

1. Advance notice. Employees should make requests for vacation leave with as much advance notice as possible (30 days is preferred).
2. Prior approval. Leave requests must be pre-approved by the supervisor with consideration for staffing requirements and/or business operations within the department. Supervisors are responsible to confirm Employees absence requests and/or timesheets reflect appropriate leave usage.
3. Time increments. Vacation leave time must be accounted for and used in hour increments. When charging for time less than an hour, vacation leave must be charged in fifteen (15) minute increments with no rounding, , i.e., thirty (30) minutes = 0.50 hours, forty-five (45) = 0.75 hours, etc.
4. Holidays. Holidays falling during an Employee’s vacation leave period are NOT charged against vacation leave.
5. Illness/injury during vacation. An Employee who becomes ill or is injured while on approved vacation leave will be allowed to use accrued sick leave to cover the illness or injury. Upon receipt of a medical certification, an Employee may request to have the actual time they were incapacitated due to illness or injury changed to sick leave (as outlined in HOP 6.28: Sick Leave).
6. Submission. Employees are responsible for submitting an absence request on the applicable time and leave keeping system before or immediately upon return from leave. Supervisors have the ability to submit on behalf of the Employee, if necessary.
7. Insufficient leave time. If there is not enough vacation leave accrued within the Employee’s balances to cover the submitted hours, the time and leave keeping system will automatically cascade to the other eligible accrual balances (overtime, comp time, floating holiday, grandfathered floating holiday, holiday compensatory, etc.) EXCEPT sick leave. If the Employee has exhausted all other eligible accruals, the Employee will receive leave without pay. Negative leave balances are NOT allowed.

D.7. Limitations

1. Outside employment. While on vacation leave, an Employee may NOT be employed elsewhere unless the requirement and approvals for outside employment have been met.
2. Use before accrual. Vacation leave may NOT be used before it is accrued.
3. Emergency closure during vacation. An Employee who is on a pre-approved vacation leave, during an early release, emergency closure, or approved Presidential closure will not have the vacation leave changed.

E. Reference Sources and Authority

• Tex. Gov. Code, Chapter 661: Leave
• Regents’ Rule 30201: Leave Policies

F. Review

The Division Head for this Policy is the Senior Vice President of Human Resources, in coordination with Vice President of Finance and this Policy shall be reviewed every three (3) years or sooner, if necessary, by the Division Head or their designee.