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.