Thread regarding Humana Inc. layoffs

Unused or unpaid employee vacation hours are generally considered a liability for a company. This is a crucial concept in financial accounting and is often referred to as "accrued vacation liability" or "leave liability."
Here's a breakdown of why this is the case:

• Financial Accounting Standards: According to the Financial Accounting Standards Board (FASB) in the United States, specifically ASC 710-10-25-1, a company must accrue a liability for employee compensation for future absences if four conditions are met:
  • The obligation is for services already rendered by the employee.
  • The rights to the compensation vest or accumulate.
  • Payment of the compensation is probable.
  • The amount can be reasonably estimated.
• Vesting and Accumulation: A key factor is whether the vacation time "vests" or "accumulates."
  • Vested rights: The employee has a legal right to be paid for the time, even if their employment ends. This is common in some states (like California) where earned vacation is treated as a form of wages.
  • Accumulated rights: Earned but unused vacation can be carried forward to a future period. Even if there's a cap on how much can be carried over, the company still has a liability for the amount the employee has earned.
• "Use It or Lose It" Policies: A company with a "use it or lose it" policy, where employees forfeit unused time at the end of the year, might not have to accrue a liability for that specific time, as the rights do not accumulate. However, many states have laws that prevent "use it or lose it" policies for accrued vacation.
• Accounting Treatment: On a company's balance sheet, this accrued vacation is recorded as a liability. The value is calculated by multiplying the number of accrued vacation hours by the employee's current hourly rate. This liability appears on the balance sheet until the employee uses the time or the company pays it out. On the income statement, an expense is recorded in the period when the vacation time is earned.
• Impact on the Company: This liability can grow to be a significant financial burden. Some studies have estimated that the total value of unused vacation time owed to employees in the U.S. is in the hundreds of billions of dollars. This can negatively impact a company's cash flow and balance sheet, and it's a key reason why many organizations are focused on encouraging employees to take their time off.

New at this. Will they actually take already earned PTO away from us to keep from having to pay it out on RIF?

@dq

They’ll definitely bring supervisors and up on unlimited PTO so the next RIF they don’t have to pay out all the hours. You can’t take PTO at this place without coming back to hundreds if not thousands of emails. At Centerwell, all the people think the whole organization should be copied on every email. They operate off of emotion and social circles. If Jim Rechtin deployed a real assessment of the true state of Centerwell, Sanjay, Renee, and Cheri would be toast. There is at least another 25-40 leaders I could name that would be toast.

@jg
I just recently separated and they paid the max earned hours to me. Lol. I remember those emails about getting near max, and taking time away from work like they actually gave AF. After separating, and seeing them decreasing hours, those emails now make sense.

@h7 Why are they so against PTO carryover? What is the issue?

They will probably not cut PTO but rather not allow associates to roll over much PTO into the next year. 15-20 days per year is pretty much the standard in healthcare. They’ll give it to you, but they won’t let you take it.

@a7 they will not do this because there is a large portion of associates who will abuse this.

Anything yet?

I wouldn’t be surprised if they transition all associates to the unlimited PTO policy…

No. But my decision to remain an employee or not hinges on the benefit changes. 1