The bank I'm employed with is FDIC insured. ALL of the employees are required to take a two-consecutive week vacation. Is this the norm?

Click here and scroll just a little bit to "vacation policies".

However, we only require 5 consecutive days including 2 weekends and so far they have been okay with it.

Don't confuse "requirement" with "recommendation". The vacation policy is a recommendation based on good internal control practices. It is not a regulation or requirement. The idea is to adopt a reasonable vacation policy that encourages rotation of duties. If you adopt a reasonable policy, your regulator will likely accept it.

We are thinking of going to 5 consecutive days with 2 weekends also. We hired a new employee who had previously worked at two other banks, and she says that they only required 5 days. I also read somewhere on BOL, which I can't find now, that this is becoming more and more the industry standard. Does anyone else know anything about this?

I've worked at banks that required
1)5 consecutive days (M-F),
2)5 consecutive days (any 5 in a row, but holidays don't count) and
3)5 consecutive days (a holiday would count toward the 5 days).

I liked the last one best, since you only burned 4 days of vacation during a holiday week and essentially got more advantage of your PTO.

I have never worked for a a bank that used such a policy.

So bbsgrant does your bank, or did your bank, require 2 weeks

Three Financials, two different regulators, no such requirements.

Just use 'em or lose them at all three.

This is excerpted from the site noted above.

To reiterate, this is a recommendation, not a regulation. It is meant to apply to persons in positions that could offer opportunities to embezzle, etc., not to the reception desk lady. Your FI can adapt it as necessary and create a policy that will be satisfactory to your examiners.

Time spent out of the office at training sessions can also be counted towards required time off. So a three day conference in Hawaii with two days of vacation tagged on would meet the five day requirement.

Hawaii????

Why on earth would you want to be there... you are basking in a balmy 18 degrees today!

Check your State Regs if you are a state bank. They often still have required minimums for consecutive days out of the bank.

Our bank requires that we take two consecutvie week of vacation time. I was asked by senior amnagement to write a policy and procedure for any exceptions. Would anyone want to share their polices?

A tag line in the section that notes your two-week requirement should be fine. Example:

"Exceptions must be approved by the employee's manager, division manager, Director of HR, and Executive Management team."

At my former bank, we changed the policy from 2 weeks to 5 consecutive days (conference or training time counts for the days) except for cash handling staff who must take the 2 weeks time off. Made for happier employees.

If your only allowed two weeks, then you must burn all of it at once, or take anything else without pay? OUCH!

I have worked for five financials and none of them required such a long time (thank goodness) for either vacation or a combination of training/vacation. One did RECOMMEND one week of consequitive use however it was not enforced.

Tell me about it. Thank goodness I get more than 2 weeks! Although, I can't remember the last time I had vacation....

This topic comes up annually. You can search for other threads.

The bottom line is that employees should be removed from their post long enough for any fraudulent activity to be caught by whoever would fill their post during their abscence. Two weeks seems antiquated to me and may need revisiting.

My FI had a 6 consecutive day requirement until recently when they changed to 5. If for some reason, people don't take their vacation time (NOT an idea to promote) it is their manager's duty to shift them out of their position for the required amount of time on an annual basis.

I went to work at my bank in 1970 and at that time you could take you vacation how you wanted. Around my 2nd or 3rd year there it was changed to the 2 consecutive week rule. I now get 4 weeks and I still have to take 2 consecutive weeks, and the other 2 can be however I want them. I was always told it was required back then, however I have begun to hear that it is a recommended requirement.

Note that Dan's link is to a letter from 1995. This has eased up in the ensuing 13 years. Examiners will look at your policy so you want it to be reasonable and meet the intent of this letter.

At our bank, we have to take two consecutive weeks. For those who have been here more than 10 years & get 3 weeks vacation, two must be taken together & the other can be broken up.

It's true Dan's link is to a 1995 letter, but this is in the FDIC's Manual of Examination Policies

Vacation Policies
All banks should have a vacation policy, which provides that officers and employees be absent from their duties for an uninterrupted period of not less than two consecutive weeks. Such a policy is considered an important internal safeguard largely because perpetration of an embezzlement of any substantial size usually requires the constant presence of the embezzler in order to manipulate records, respond to inquiries from customers or other employees, and otherwise prevent detection. Examiners and bank management should recognize that the benefits of this policy may be substantially, if not totally, eroded if the duties performed by an absent individual are not assumed by someone else. Where the bank's policy does not conform to the two-week recommended absence period, examiners should encourage the board of directors to annually review and approve the policy actually followed and the exceptions allowed. In such cases it is important that adequate compensating controls be devised and strictly enforced. If after consideration of all relevant facts and circumstances it is determined that the vacation policies are deficient, the matter should be discussed with the chief executive officer and the board of directors. Comments and recommendations on the supplemental Internal Routine and Controls schedule may be appropriate.

It appears to depend on your regulator. The FDIC wants it, my info from client banks is that the OCC doesn't even look at it, and for the Fed, I put together a vacation risk analysis position by position and got the Board to approve requiring 5 business days out of the bank (without VPN access). The Fed has been fine with that approach. The risk analysis shows who covers for the position, what their access levels are (it's more than cash handling - I'm a lot more concerned about high levels of IT access), and what mitigating factors are in place (rotation of duties, dual control, etc.) We worked it out so that nobody is required to take 2 consecutive weeks off and HR monitors to makes sure that everyone takes the 5 consecutive days. We report it to the Board once a year when they approve the vacation policy and the vacation risk analysis.

As banks get bigger the OCC will ask about risk management on this topic. They will not insist on a one size fits all answer. Covering high risk jobs and good controls can satisfy the risk.

I think the main point here should be that it is not a requirement to take 2 uninterrupted weeks. From an employee relations aspect, employee with 2 total weeks of vacation should be allowed to split it up; 5 days in a row, and the the other 5 how they like it. Regulators don't requrie any longer than that, so do your best to make your low-paid employees happy...

Hello all, I just moved into a higher level position at another financial institution and this 2 week rule is still in place at this community bank. It doesn't seem feasible to have half of the vacation time tied up into a two week period. Every other financial institution I have been a part of has not had this rule in place. Any idea how to suggest changing the policy? Does anyone have a copy of their vacation policy they might want to share to use as ammo for a board meeting? It sounds like this policy isn't really followed by most.

I am not sure using the vacation policy of 5 other banks is the correct method to resolve the situation. I would start by getting a little background as to why and how long this policy has been in place. Then during a casual conversation you might ask employees if they like the policy. Most of the employees might like the policy. If they don't like the policy ask them what they would like to see instead of the current one.

Just my thoughts.

I haven't seen a bank that requires 2 consecutive weeks in a while (though I know they are out there). If a bank has a requirements, it typically seems to be just a week.

For suggestions in changing the policy - This policy is a control to mitigate risk of embezzlement. Therefore, you would want to justify the change based on risk. You could do this by providing a risk assessment to your board (it doesn't have to be too formal but should justify the change) and have the board sign off on it and associated policy changes. Also, it never hurts to pro-actively run this by your examiners to get their advance buy-in.

unless something has changed this is the requirement for many

https://www.federalreserve.gov/boarddocs/srletters/1996/sr9637.htm

In a prior I would add vacation to offsite training. (prior to having kids with school schedules)

I thought that letter was old guidance based on previous comments and threads. I thought it was a "recommendation" according to the manual based on each bank's risk assessment. I have discussed with about a half dozen other financial institutions in the area and they all have 5 consecutive work day policies instead of 10 so there must be an exception or leniency from the fed regarding this matter.

I think my first step is going to touching base with my contacts with our regulators and getting some feedback before I pursue this any further. I am fishing to see anyone would share language regarding a 5 day policy/less than 2 week policy that their institution may have.

I do not like the requirement but unless it is changed, us FRB banks are stuck with it. Addtionaly our state regualor reviews the vacation log to ensure that we follow it. We do have a risk assessment so not all staff must follow it.

Ok, I am following you here. The whole purpose of this is a control on embezzlement. This means, those more likely subjected to it are front line staff and staff that have access to transactional based systems. This would not normally include most back-end staff, BSA, Compliance staff, and executive management based on their roles. This is generally targeted at accounting/wire departments/securities(trading)/tellers/similar roles.

There are other ways to skin the cat, but the cat must still be skinned. Here is from the OCC Internal Controls handbook:

• Employees in sensitive positions or risk-taking activities do not have absolute control over areas. For example,

– Is there periodic unannounced rotation of duties for employees or vacation requirements that ensure their absence for at least a two-week period?

Even as Adam mentioned, I think we have established what the letter says and OCC says, but the MAJORITY of institutions do not follow it, have a different policy, or have major exceptions in place. So my question is..... why/how? Is it their definition of "sensitive positions"? I will follow up with the institutions I know how this policy, but was looking to see if anyone here avoids the two week requirement as well:

I have seen this definition:

The following have been identified as sensitive positions:
• All Finance/Accounting positions
• All Human Resources positions
• All Information Technology positions
• All Central Operations positions
• Customer Service Representatives/Tellers
• Financial Services Representatives/Financial Services Officers (New Accounts)
• Branch Operations Supervisors

This would exclude everyone I mentioned in my prior post. Therefore... any input from those whom have a 1 week requirement instead of 2 would be greatly appreciated. What have your regulators said?

Like Randy said, there are different ways to mitigate the associated risk and a rotation of duties is one way to do that.

Do banks get away with not having a two week policy? - I am sure they do unless there are other internal control weaknesses and they find themselves faced with a cease and desist order. A quick scan of FDIC enforcement actions for internal control related cease and desist orders will show that vacation policies are commonly mentioned.

Just wondering how that rotation would work if the rotated employee would need to be off the computer system for the 2 week duration.

Mailroom employees sorting mail usually don't have access to the core computer systems

Good thing I do not work for a mega bank. I would not like to have an audit recommendation that an employee making over a million dollars should be sorting mail.

That's part of the reason I am bringing this up. Being such a small community bank surrounded by giants, this mandatory 2 week vacation policy puts us not only at a competitive disadvantage but appears to give us a higher turnover rate, thereby costing us more money. If I could find a way to implement a different control, we could scale back to 1 week like all of our local competitors.

Unfortunately the only "easy" solution is to grant an additional week vacation to all staff.

All, as you do not wish to get into the why dont I have the extra week.

Good luck getting that past senior management.

actually, in this day and age they do...our mail room staff also serve as processors for our bank-by-mail product, so they are processing entries via a teller capture device to make deposits, loan payments, etc.

as Bob Dylan sang...the times, they are a-changin...

Our institution is small, we have a required one week, consecutive days vacation policy. I've been in banking a long time, anytime an examiner has asked for our vacation policy - and it has been rare - there has never been a follow-up question from an examiner.

I am assuming that the practice was started for auditing purposes, am I correct?

If that's the case, is anyone TRULY audited while they're away?

The practice was started to mitigate losses to the bank through employee embezzlements.

I can personally attest that I worked at a bank that did not rigidly follow the one week vacation policy. No vacation employee
stole $225k over 18 months. Never had a day off in over a year. It can burn you be not following required consecutive time off.

One bank (a long long time ago), the comptroller did everything himself. He was on a 3 week vacation towards the end of the year, when his secretary was straightening out his office. She found a notification from the state that they had raised the "doc stamp fee" from $0.10 to $0.15 per hundred effective June 1 that year. No-one knew about it, and the bank was putting the lesser amount on all notes. It was a project to identify all notes and add the additional fees (bank elected to do it at their expense.

2 weeks had been the norm as if someone was coming back in 1 week, most times, the task would wait for the person. If something was found in week 1 of the vacation, the correction would be in over 1 week, someone would usually have to do it.

Is anyone changing their vacation/ time off requirements in lieu of Covid-19?

At the present time no. We are only required to be off 1 week. Sometimes the amount of time you are off can be dictated by the bank's bonding company.

have a thread started on this already


https://www.bankersonline.com/forum/ubbthreads.php/topics/2235304/covid-and-vacation#Post2235304

Thanks Hap. Sorry for the duplicate.

We are looking into updating our handbook. We only require 1 week but it must be Sunday-Sunday. Is this necessary? Can it be Tuesday-Tuesday?

Examiners have never had a problem with our 5 consecutive day policy. You can start on any day, but holidays don't count. You can take a Friday off, take your Monday holiday, and then take Tuesday through Friday off and it counts as your 5 days.

Thank you

it can be whatever 5 consecutive days you choose, there is no regulatory monday-friday limitation

Honestly, unless you do something to restrict a person's computer/network access while they are gone, this control has become pretty much worthless anyway. The control was designed so that the daily manipulation an employee would have to engage in to cover up an embezzlement would come to light while they were gone. Now, with remote work and such, they can continue to cover it up even while spending two weeks in the south Pacific.

That may be why our auditors recommended that when someone is out on vacation for their "extended" time - in our case we require one week - their access must be temporarily turned off so they can not access remotely.

Exactly so, TaraSue.

First banking job - the comptroller went on vacation (paper then, no computers).
When cleaning off his desk, his admin found a notice from the state that doc(umentary} stamp tax would be increasing from $.10 cents per hundred to $.15 cents per hundred, effective 2nd quarter. Unfortunately he went on vacation in November, The bank had to pull every note (commercial, consumer and mortgage) and apply the additional doc stamps from April 1st. At that time they were like postage stamps - had to lick them! New to the bank, I had been one of the people volunteered for the project.