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Charity begins on the job in vacation donation program

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AKRON, Ohio—Under an innovative program, employees at FirstEnergy Corp. can donate accumulated vacation time to co-workers who are facing disability-related absences or family medical emergencies necessitating time away from work.

First launched in April 2005, the program is unusual for a private sector company, said Barbara J. Marshall, manager for health and absence management at the Akron, Ohio-based energy company.

In conducting research to create the program, Ms. Marshall said she found mostly schools and universities that provide employees with a similar benefit.

Yet a vacation sharing program such as FirstEnergy's could help employees at other private sector companies as more employers cut back on their contributions for employee disability insurance, said Marcia Carruthers, chief operating officer for the San Diego, Calif.-based Disability Management Employer Coalition.

While more employers are cutting back on their disability insurance contributions, many continue to provide the coverage but now leave it up to employees to pay the cost or decline the coverage.

As of November 2004, about 39% of U.S. workers had access to short-term disability benefits while 30% had access to long-term disability benefits, according to the U.S. Bureau of Labor Statistics.

But with employees likely to forgo disability coverage if they have to pay for it themselves, a vacation sharing program could provide a backup plan for them, Ms. Carruthers said.

Vacation benefits at public entities traditionally have been more generous than at private sector companies, which could make such a program more practical, Ms. Carruthers acknowledged.

FirstEnergy's program works, in part, because employees have been allowed to accumulate unused vacation days from year to year. Some FirstEnergy workers with many years of service have banked months' worth of unused vacation time that they can donate to co-workers in need.

Named Catastrophic Assistance and Relief for Employees, FirstEnergy's CARE program offers employees who can demonstrate a need and meet certain qualifications up to 520 hours, or the equivalent of three months, away from work.

Under CARE, employees also can cash in unused vacation time for certain emergencies and the company is exploring providing interest-free loans as a way to maintain employee morale.

To qualify for vacation day donations, employees first must get approval from their supervisors to take the time off, Ms. Marshall said. Then a committee composed of representatives from accounting, human resources and treasury determine whether the applicant meets the program's hardship criteria.

Unforeseen events such as certain medical conditions qualify for the program that has helped employees and their immediate family members suffering from illness such as cancer or heart surgery.

But to receive donated vacation time, the worker first must exhaust his or her own vacation days and the donated time must be available. So far, more than 270 employees have donated some 3,800 hours, Ms. Marshall said.

Workers often donate their time because they know someone is in need, Ms. Marshall said. Internal Revenue Service rules disallow a contribution to a specific person-it must go into a pool, but often donated time does flow to the co-worker who motivated the donor, she said.

There are other rules and regulations. For instance, the applicant and the recipient can request anonymity, donors can provide only up to half of their unused vacation so they don't encounter future problems and misuse is subject to disciplinary action including firing, Ms. Marshall said.

Since the program's inception, 26 employees have requested vacation donations and 23 have asked to cash out their own vacation time. At least two, however, have been turned down and others have withdrawn their requests because of changing circumstances.