Consultant Has Timely Solution to Pressing Needs for Employee Leaves

It is not often a brainstorm hits someone while he is watching television, but it happened one night to William Kaufman.

In December, Kaufman, an employee-benefits consultant, was viewing a segment of “20-20,” ABC’s weekly news magazine program. The program dealt with 100 California lottery employees who donated more than 900 hours of their own vacation and overtime pay to a popular co-worker suffering from AIDS.

“It hit me like a bolt of lightning,” Kaufman said. “If you could give time when somebody got sick, why couldn’t you give time--and save it-- before anybody got sick?” That is when Kaufman, a Woodmere, Long Island, pension and financial-planning consultant, created the concept of an employee “time bank.”

Such a bank would accrue time donated by employees in the form of unused vacation days or sick days, personal time or overtime. They would be converted to money (the value of the employees’ time) and then be given to co-workers who needed extra time off at full pay because of dire personal circumstances.

While the federal government and a few states, such as California and Arizona, have initiated similar “job-leave” programs for public employees, experts say that Kaufman’s time bank appears to be the nation’s first such employee-benefit program for the private sector.

It is an employee benefit whose time has come, Kaufman said. “There are so many catastrophic situations not covered by insurance,” he said. These circumstances often involve chronic illnesses, but also could include unforeseen personal problems, such as painful divorces that require time off to reassemble fractured lives.

Some experts say time banks might benefit employers as well. Such plans may “reduce absenteeism by encouraging employees to donate (unused) sick days, instead of taking them just because they’re entitled to,” said Robert F. Morano, a New York attorney specializing in business law.

Common Design Shared

Kaufman added that time banks should appeal to businesses concerned with spiraling employee health insurance costs. “Companies are looking for low-cost benefits that really deliver,” Kaufman said. Time banks would require little additional cost for most companies--Kaufman’s consulting fee for setting up such a bank ranges from $1.50 to $10 per employee, depending on company size, he said.

While Kaufman’s plans might differ from company to company, his time banks share a common design:

First, employees donate time to the bank--overtime, vacation days, personal days, unused sick days--all according to individual preference and company policy. It is all voluntary, like giving to a blood bank, but employees could donate one or two days a year, or a few hours a month, Kaufman said.

Next, the company converts the value of the donated time to money in the bank, prorating it according to each employee’s pay. Then a committee overseeing the time bank--generally three employees and two managers--reviews applications and decides which employees should get time off with pay. An employee doesn’t have to donate time to be eligible, but that’s a factor committees might consider, Kaufman said.

When a time bank is established, an initial reserve can be built up, and as time is used, it can be replenished by periodic employee contributions. Still, a time bank committee should be careful “not to give out time too loosely,” Kaufman said. A committee can give time in small increments or can choose to give only partial salary payments if an employee’s financial need is not dire, he said.