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By Anne Steele and Chip Cutter 

Early in the pandemic Maestro Health noticed a troubling but common trend: Employees weren't taking vacation.

The health-plan administrator acted quickly, introducing a companywide mental-health day in April, and another one leading into the Fourth of July weekend. Then, following internal discussions in the wake of social unrest and racial-justice protests this summer, the company added a floating holiday that employees could use for Juneteenth, Good Friday, Yom Kippur, or whichever day they choose. They axed Columbus Day, and plan to add two floating holidays next year to offer employees greater flexibility.

Maestro, acquired by French insurer AXA SA in 2018, also increased the number of days employees can roll over into next year to 20 from 15.

"It builds good will," says Maestro Chief Executive Craig Maloney. It's also practical. The company's busiest time starts at the end of the year with benefits enrollment in November and December, and it can't be missing swaths of its workforce.

With vacation balances building among employees who either feel they can't take time off amid the uncertainty or won't because travel plans were quashed due to the coronavirus, companies are split on what to do. While some are introducing more relaxed policies and allowing days to carry over into next year, others are requiring employees to take their vacation sooner rather than later to fend off burnout -- and a potential liability on their books.

Nearly half of employers have made or are planning to make changes to paid time off, vacation and sick-day programs, according to a U.S. study conducted in late April by consulting firm Willis Towers Watson. Twenty-four percent of employers are planning to increase rollover limits to minimize lost vacation days; 16% require employees to take days off to reduce year-end buildup and 22% are planning or considering such a requirement. Fifteen percent are planning or considering allowing employees to donate unused vacation days to a pool for others to take.

Jada Carr, 24 years old, has taken eight days off during the pandemic and says she is happy she did.

An office administrator at a market-research company who lives at home with her parents in Matteson, Ill., Ms. Carr was psyched for the summer. She envisioned taco and margarita bar crawls through Chicago and attending the city's Lollapalooza music festival.

Instead, she took time off to hole up at her boyfriend's place for three days in March. The couple also spent a long weekend at a hotel in the city for his birthday -- no pool or breakfast service. In between, when feeling a spurt of creativity, she took some days off to paint and sculpt, and fix up her old bike.

Taking those days off required her to undo some wiring, says Ms. Carr, who graduated from college in December 2018. As a Black woman she grew up with a sense that work was important, and taking days off induced a sense of guilt.

But "being able to step away and do those little things helps with my productivity," she says, adding she wouldn't want to push off her vacation days into next year. "I would have to spend the rest of this year in front of my computer," she says.

Other workers, however, see things differently.

At technology giant SAP SE, an internal review found that employees' vacation usage stood at only 4% as of early June, compared with 24% at the same time the prior year. The number of planned vacation days in the future is at "historic lows" for the company, says Dan Healey, SAP's head of human resources for North America.

Executives debated about whether to allow employees to extend a certain number of days to 2021, but decided against it, Mr. Healey says. Unused vacation time is considered an accounting liability on the company's balance sheet -- carry-over time raises the risk of having to cover higher leave payouts to employees who exit the company. But the bigger issue, he says, is the risk of employee burnout.

Indeed, surveys suggest some employees may need a break now more than ever. More than four in 10 workers in the U.S. say they are now spending more time on video calls, emails and other work applications since the start of the coronavirus outbreak, according to a new Wall Street Journal/SurveyMonkey poll.

"It would be tempting in my role or to say to colleagues, 'Let's just roll over vacation,' but it really is contrary to our message," says Mr. Healey. "A vacation day delayed is really a lost opportunity for our employees to recharge and reconnect."

Still, the pandemic has altered travel plans for many workers. Mr. Healey and his colleagues have received powerful emails from staffers, outlining the bucket-list vacations they planned to take this year, and asking for permission to take more days next year if trips are rescheduled. SAP has instructed employees to work with their managers in those situations. "If you exceed your vacation time, we'll be flexible about it," Mr. Healey says.

Meanwhile, SAP is sending reminder notes to managers, asking them to encourage staffers to take time off this year, and to plan vacation in a way so that not too many employees are taking time off at once.

Tamara Rasberry, who owns an HR consulting firm focused on diversity, inclusion and mental health, says she is surprised at the number of companies that aren't changing their carry-over limits this year. She has seen some companies making other adjustments such as ending the workday early every other Friday, but says it doesn't make up for vacation days.

With limited travel opportunities the notion of vacation this year has been upended. And while some employers are encouraging "staycations," that has also changed drastically, says Ms. Raspberry.

"The type of staycation where you don't travel but you stay home and forget all things work-related for a week feels different when you are working from home," she says, adding that working from home during a pandemic is different from regular working from home.

"It's not by choice and there is a lot of fear, trepidation and isolation involved," she says. "If you don't have enough space to have a completely separate work from home space, your staycation will feel like you just took a pillow and blanket into your office."

(END) Dow Jones Newswires

August 23, 2020 15:14 ET (19:14 GMT)

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