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Lab Vacation Cash-Out Program

Lab Vacation Cash-Out Program Summary


The Lab’s Vacation Cash-Out Program offers eligible employees the flexibility to receive a lump-sum payment for future vacation hours they will accrue the following calendar year. Enrollment in the program will be annual and enrollment dates will be communicated each year. Enrollment is available through the TIME module in LAPIS. Employees may elect to cash out either 40 or 80 hours of vacation, but only for hours that will be accrued in the future, not for currently accrued hours, in accordance with IRS tax rules.


Key Dates & Payment Schedule

  • Election Deadline: To be communicated annually
  • 40-Hour Cash-Out Payment: The first paycheck date in June
  • 80-Hour Cash-Out Payment: The first paycheck date in October


Eligibility Requirements

  • Must have at least 120 hours of accrued vacation at time of election and maintain this balance through the end of the enrollment period.
  • Must be able to accrue the selected hours (40 or 80) during the program period (January–May for 40 hours, January–September for 80 hours).
  • Most categories of LLNS employees are eligible, except indeterminate employees, Scholars Program members, or those under certain collective bargaining agreements.


Important Notes

  • Once you opt in, your election is irrevocable; this means you cannot use the selected hours for vacation or change your decision later.
  • Cash-out payments are taxed at the supplemental rate and are not eligible for 401k contributions or shift differential.
  • If you leave the Lab before accruing the hours, all accrued vacation, including the cash-out amount, will be paid out per standard policy.

How to Enroll During the Annual Enrollment Period

  1. Log in to LAPIS and select the “TIME” tile.
  2. Click the “Vacation Cash-Out” tab.
  3. Choose either 40 or 80 hours to cash out
  4. Review and agree to the terms, acknowledge, and submit.

By signing this form, I understand and agree to the following:

  • I currently have a balance of at least 120 hours of vacation.
  • I understand that if my balance is below 120 vacation hours on the last day of the election period, I am not eligible to participate in the vacation cash out program.
  • The cash out is based on future accruals and not what I currently have in my vacation balance.
  • Future accrued hours equaling the cash out option are not eligible for use and will only be added to the cash out in June (or October if 80 hours are selected).
  • My future accruals for the 40 (or 80) option are irrevocable to meet the vacation cash out requirement.
  • I understand this election is irrevocable and cannot be cancelled or modified as long as I remain employed by LLNS.


FAQs


How many hours may I irrevocably elect to cash out? You may elect either 40 or 80 hours. You cannot elect another amount.

Can I change my mind and use the vacation hours later? No. The election is irrevocable. This means that once you make your election, it is final and cannot be changed. Employees will not be able to re-claim the hours for vacation time use.

Why can’t I cash out hours that I already have available, if I’m not going to use them? Due to IRS tax rules, the Lab is only offering employees the option to cash-out future accrued vacation time, not hours already accrued. Employees must elect to participate the year prior to receiving the lump sum payment to allow time for future accruals.

What if I am on leave without pay? Generally, employees who are on a leave of absence without pay will not accrue vacation hours. So, depending on the length of the leave, it may impact your ability to accrue sufficient hours to cash out.

How will I receive my lump-sum payment? You will receive your payment through payroll, following the same deposit instructions as your paycheck.

What if I miss the deadline?Unfortunately, you will not be able to participate.

When should I expect to receive my cash out?The cash out will occur in two separate pay periods. The 40-hour option will be paid on the first paycheck in June, and the 80-hour option will be paid on the first paycheck in October the year following your annual enrollment.

What happens if I leave the Lab before I have accrued the vacation time I elected to cash out?When you leave the Lab, all accrued, unused vacation is paid to you, including the amount you accrued towards your cash-out election.

How will these payments be taxed? The Vacation Cash-Out payments will be taxed at the Supplemental Tax rate, which is a total tax rate of 37.55% for California employees. The breakdown in taxation is as follows: Federal tax: 22%, California tax: 6.6%, Social Security tax: 6.2%, Medicare tax: 1.45%, and California State Disability Insurance tax: 1.3%. This is subject to any changes in Federal and California state tax laws in 2026. For employees residing in states outside of California, taxation will follow the supplemental tax rate for that state.

Are these payments eligible for 401(k) contributions?No, Vacation Cash-Out payments are not eligible for 401(k) contributions, 401(k) matching, or Service Based contributions.

Are these payments eligible for shift differential?  No, Vacation Cash-Out payments are not eligible for shift differential payments.

What happens if I do not accrue 40 hours by May or 80 hours by September?

  • If you do not accrue 40 hours by May, in Oct. you will be paid for whichever is less: either 40 hours or the actual number of hours you have accrued.
  • If you do not accrue 80 hours by Sept., you will be paid for the total number of hours you have accrued by September.

What happens if I reach my maximum vacation accrual limit?If you do not use vacation time to reduce your balance, you will stop accruing additional vacation hours. This may prevent you from reaching the 40 or 80-hour thresholds, which could result in a lower cash out payment.