Earned Time. Time Away. This policy applies to: Benefits-eligible colleagues on weekly payroll.

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1 Policy Approved by: Board of Governors Date of Approval/Revision: , 2005, 2008 Policy Number TA-2 Earned Time Employment Daily Worklife Time Away Compensation (Pay & Benefits) Work/Life Balance Overview: Lahey Clinic colleagues consistently report that paid time off is one of their most valuable work and family benefit. Lahey Clinic s approach to paid time off emphasizes flexibility and personal management. Earned Time (ET) emphasizes flexibility because it can be used for a variety of planned needs such as vacations and holidays, as well as unplanned needs including illness, childcare and personal business. Within program guidelines, it can even be sold back to Lahey for cash. Earned Time emphasizes personal management because it allows each colleague to manage his/her own time off and to use that time off in a way that best meets his/her own needs and circumstances. This policy provides consistent standards for accruing, planning, taking, reporting, recording and approving paid time off, as well as guidelines for eligibility and sale of Earned Time. This policy applies to: Benefits-eligible colleagues on weekly payroll. Manager Responsibility: Communicate guidelines to staff. Develop departmental approach to planned Earned Time. Supervise correct reporting of Earned Time and/or Extended Sick Leave. Colleague Responsibility: Prudently manage use of Earned Time. Provide adequate notice when planning time away from work. Follow guidelines when reporting unscheduled absences from work. Purpose To provide eligible colleagues with a uniform and consistent standard for accruing paid time off for absences during their regularly scheduled hours.

2 Definitions Eligible Colleagues Earned Time Lahey Clinic colleagues who are regularly scheduled to work twenty (20) or more hours per week. Those colleagues regularly scheduled to work fewer than twenty (20) hours per week, monthly paid colleagues and temporary and per diem colleagues are not eligible to accrue paid time off under this policy. (Certain colleagues hired before April l, 1994, who were scheduled and are still currently scheduled to work sixteen (16) hours per week have limited grandfathered benefits.) Earned Time (ET) is a weekly accrual/bank of paid time off. Earned Time Day An Earned Time Day is equal to one-fifth (1/5) of a colleague s regularly scheduled weekly work hours. Extended Sick Leave Extended Sick Leave (ESL) is paid time off for a colleague s serious health condition of greater than five (5) days in duration (prorated for part time). Policy Lahey Clinic grants the accrual of a specific yearly amount of paid time off to eligible colleagues on the basis of scheduled hours, years of service and position grade level. ET is intended to replace pay only when scheduled hours are not worked. The use of ET and ESL is subject to management approval based on operational needs. A. Accrual of Earned Time: Eligible colleagues earn a specific number of ET days per year, depending on scheduled hours, years of service and position grade level. New colleagues begin accruing ET on the first Sunday following thirty (30) calendar days of employment. Existing colleagues (including per diem personnel & part time colleagues scheduled for less than twenty (20) hours per week) who become ET eligible begin accruing ET on the first Sunday following thirty (30) calendar days of ET eligible employment. If a colleague s regularly scheduled hours change, and he/she remains ET eligible, the accrual rate of ET changes to reflect the new scheduled hours. The new accrual rate becomes effective on the same day as the change in hours. ET does not accrue during any week in which more than one-half of a colleague s scheduled work

3 hours are unpaid or paid as ESL, including worker s compensation and short-term disability absences. Colleagues may accumulate a total ET balance of 1.5 times their annual calendar year accrual, up to a maximum of 520 hours. ET accrues during any week in which at least one-half of the colleague s regularly scheduled work hours are either worked or paid as ET. The amount of ET available for use is indicated on the colleague s pay stub and is updated weekly. B. Use of Earned Time: Colleagues may draw part or all of their accumulated ET, with managerial approval, from their ET bank. There are two types of absences for which a colleague may use ET: scheduled and unscheduled. If an absence from work can be predicted in advance, a colleague must schedule use of ET, contingent upon managerial approval. Advance notice, as specified in the department s guidelines, is required when requesting the scheduled use of ET. Use of scheduled ET includes vacation time, fixed holidays or foreseeable personal reasons that require a colleague s absence from work. All available Earned Time must be used prior to a colleague being eligible to take time off as unpaid. Unscheduled use of ET includes illnesses of less than five (5) consecutive working days (prorated for part time) or unanticipated emergency situations. Other unscheduled use of ET may include personal emergencies and unanticipated emergencies of family members. A colleague s manager must be notified of any unscheduled use of ET as soon as possible before the beginning of the regularly scheduled work hours during which a colleague will be absent. Please refer to the individual departmental guidelines for notification procedures. Because of the disruption caused to a department s workflow, unscheduled absences are to be used infrequently. Based on operational needs, departments may need to limit the number of unscheduled ET hours. Failure to abide by departmental standards may be grounds for progressive discipline, up to and including termination. Colleagues are expected to use a minimum of twenty (20) ET days per calendar year (prorated for part time) including days off for fixed holidays, illness and vacation days. Any portion of the twenty (20) days not taken will be transferred to the colleague s ESL bank at the end of the calendar year. ET, however, is not used for qualified absences due to jury duty, military service or death in the immediate family. For more details on these specific absences, please refer to the following policies: Bereavement, Military Leave and Jury Duty. At all other times, colleagues must use available ET for time off, with the exception of the following situations: during Flexdown that is, a condition during which the Clinic temporarily reduces a non-exempt colleague s regularly scheduled hours in response to decrease in available work; or when the Clinic, or an area of the Clinic, cancels regularly scheduled work hours, except for fixed holidays.

4 New colleagues who are eligible for ET or newly ET eligible colleagues may borrow ET for any fixed holiday occurring within sixty (60) calendar days of employment or ET eligibility. This results in a negative balance until enough time has been accumulated to cover the balance. Should a colleague terminate, any used but unearned ET will be withheld from the colleague s final paycheck. ET may not go into arrears for any other situation. New colleagues or newly ET eligible colleagues may decline the opportunity to borrow ET and may take the fixed holiday as an unpaid day. C. Donation of Earned Time: A colleague may elect in writing, to voluntarily donate Earned Time (ET) to another colleague who has used up all of his/her ESL and ET and who, due to illness or injury, faces an unpaid extended absence of at least several weeks. Only ET hours may be donated (Extended Sick leave cannot be donated) and the donation will not reduce the minimum usage requirement (see Section 2., Use of Earned Time). Donated ET is transferred on an hour-to-hour basis. The donation must be approved by the donating colleague s manager and by the appropriate Vice President. The donating colleague must sign or initial the written document and the donation is irrevocable, whether or not the donated ET is used for the original purpose. D. Extended Sick Leave: ESL is paid time off intended for illnesses of more than five (5) consecutive working days (prorated for part time). ESL is not an accrued benefit. There are only three instances when time is accumulated in a colleague s ESL bank: If a colleague has not used the minimum requirement of twenty (20) ET days (prorated for part time colleagues and for newly hired and newly ET eligible colleagues hired or first eligible prior to July 1st), the difference between the time used and the 20 days (or the part time or new hire/ newly eligible colleague equivalent) is automatically converted into ESL at the end of the calendar year; and/or If a colleague has reached the maximum ET accrual, any subsequent accrual over that maximum is automatically converted into ESL; and/or If a colleague was employed before Lahey converted to an Earned Time program and some of the time that Lahey credited to the colleague as sick time or excess accrued vacation was converted into what is now known as ESL. ESL may be used only after five (5) consecutive days of work (prorated for part time) have been missed due to illness. ESL hours are paid at the colleague s hourly rate of pay at the time of usage. However, ESL hours may not be cashed-in and are not paid out at termination. Also, if more than one-half of the regularly scheduled work hours are paid from the colleague s ESL bank, ET will not accrue. Unlike ET, the ESL used does not include shift and weekend differential. ESL is not treated as time worked for the purposes of calculating overtime. The amount of ESL available to a colleague is indicated on the colleague s pay stub and is updated weekly if activity occurs.

5 E. Relationship Between ESL Use and FMLA Leaves: Leaves due to colleagues illnesses of greater than five (5) consecutive working days (prorated for part time) must be taken in compliance with the Family and Medical Leave Act (FMLA) Policy. ESL may be taken starting the sixth (6 th ) work day (or eighth 8 th calendar day) for any absence longer than five (5) working days (prorated for part time). Please refer to the FMLA Policy for more detailed information. F. AutomaticTransfer of ET to ESL: ET automatically transfers into a colleague s ESL bank if less than twenty (20) ET days are taken during a calendar year. This transfer of the balance of the remaining twenty (20) ET days to ESL happens at the end of the calendar year. Minimum usage requirements are prorated for new and newly eligible colleagues whose ET will begin to accrue on or after July 1 st are not subject to the minimum usage requirement in the remainder of that initial calendar year. The minimum usage requirement does apply in the second (2 nd) and subsequent calendar years. Further ET accruals will automatically transfer into a colleague s ESL bank if the maximum ET accrual has been reached and no time off or cash-in is available or has been taken. This conversion of ET accruals to ESL continues until ET time available has been lowered below the maximum. G. ET Cash-In Option: Colleagues may receive, in a lump sum, the dollar equivalent of up to one (1) work week of available ET during the fall of each calendar year, provided that the cash-in eligibility criteria are satisfied. The cash-in does not include payment of shift differential. The cash-in does not count toward the minimum time off requirement of twenty (20) days. No deductions, other than taxes, will be withheld from the ET cashin payment. In order to be eligible to cash in ET, the following criteria must be met: A minimum balance of ten (10) ET days must remain in the ET bank after cash-in; The amount of ET cashed in cannot be less than one (1) day; and A colleague will satisfy the minimum time off requirement of twenty (20) ET days prior to December 31 st. H. ET/ESL Disposition upon Status Change or Termination: If a colleague s status changes from full time to part time and the current ET balance is over the maximum for the new part-time status, an amount of ET will automatically be paid to the colleague. The amount paid equals the amount required to bring the ET balance to a level of one ET week less than the new maximum balance. The payment will be a lump sum payment, at the rate of pay preceding the status change, and does not include the payment of shift and weekend differential.

6 Upon termination or a status change that renders a colleague ineligible for ET, the total ET accrual held at the time of the termination or status change is paid to the colleague in a lump sum. This lump sum is paid at the rate of pay preceding the status change or termination and does not include payment of shift differential. Unused ESL hours are not paid to the colleague upon termination or upon the reduction of hours below benefits eligible status. Also, ESL hours are not reinstated if a colleague is rehired or returns to a benefits eligible status. I. ET Calculations: To determine weekly accrual rates, annual accruals and maximum accruals based on scheduled hours, years of service and position grade level, please refer to Exhibit A (Earned Time Accruals and Maximums). For colleagues who were hired before April 1, 1994, please refer to Exhibit B (Earned Time Accruals and Maximums- Hired Before 4/1/94). Minimum usage requirements are prorated for new and newly eligible colleagues whose ET will begin to accrue on or after July 1. The ET received includes shift and weekend differential if a colleague is regularly scheduled to a shift that is paid a differential and the shift and weekend differential is noted on a colleague s time card. ET is treated as time worked for the purposes of calculating overtime. J. Relationship Between ET, ESL and Short Term Disability: Five (5) ET days (prorated for part time colleagues) as well as all existing ESL must be used before a colleague becomes eligible for Short Term Disability (STD) benefits. If a colleague is approved by the insurance company for STD and has no remaining ESL, he/she may request to use remaining ET to supplement the amount of the insurance company benefit, up to a maximum (including Short Term Disability and ET) of 100% of salary. A colleague receiving Short Term Disability benefits does not continue to accrue ET. Please refer to the Short Term Disability Benefit Summary for more detailed information. K. Relationship Between ET and Workers Compensation: A colleague must use ET, if available, for the first five (5) days of absence resulting from a work-related injury or illness or take the time without pay if ET is not available. A colleague receiving workers compensation benefits does not continue to accrue ET. Also, ET or ESL may not be used to supplement workers compensation benefits.

7 L. Grandfathering: Certain colleagues hired prior to April 1, 1994 were grandfathered for a particular level of ET benefit, subject to the following conditions: A part time colleague who was regularly scheduled for 16 hours per week was grandfathered for an amount equivalent to his/her previous level of vacation accrual. The grandfathered benefit for any such colleague is permanently discontinued when any change in status occurs (e.g. an increase in scheduled hours, a decrease in scheduled hours or the termination of employment). A benefits-eligible colleague hired prior to April 1, 1994 was grandfathered to receive the accrual rate indicated in Exhibit B for his/her grade level on April 1, The grandfathering for any colleague is permanently discontinued if there is break in benefits-eligible status of one year or longer. In no instance is a colleague grandfathered for an accrual rate indicated for a grade level higher than his/her grade on April 1, M. Personal Days: In addition to Earned Time days, all full time and part time colleagues regularly scheduled to work more than twenty (20) hours per week accrue two (2) paid personal days each January 1 st. New colleagues hired (or existing colleagues who first become benefits-eligible) between January 1 st and April 30 th will accrue two (2) personal days on the Sunday following thirty (30) calendar days of employment. New colleagues hired (or existing colleagues who first become benefits-eligible) between May 1 st and August 31 st will accrue one (1) personal day on the Sunday following thirty (30) calendar days of employment. New colleagues hired (or existing colleagues who first become benefits-eligible) after August 31 st will not accrue any personal days until January 1 st of the following year. A personal day is equal to one-fifth of a colleague s regularly scheduled work hours, as of January 1 st ; in the case of a newly hired colleague, as of their date of hire and in the case of a newly benefits-eligible colleague, as of the date of benefits eligibility. As part of the LaheyFlex enrollment process, new colleagues and newly benefits-eligible colleagues are given the opportunity to sell one or both of their personal days (depending upon their date of hire or date of benefits eligibility) and receive a weekly credit to defray a portion of their benefit costs. New colleagues may, with managerial approval, take an advance against their unaccrued Personal Days for sale under LaheyFlex. This will result in a temporary negative balance; and, should a colleague terminate within the first thirty (30) days of employment, a colleague must repay Lahey Clinic for the cash value of the used but unaccrued Personal Day(s). Personal Days (subject to managerial approval) may be used at any time after they have been accrued. If a colleague has Personal Day hours available the colleague must use those hours, in addition to any available ET, before they are eligible to take time off without pay. The use for sale of Personal Days does not decrease the Earned Time minimum usage requirement (see Section 2- Use of Earned Time).

8 Personal days not used within the calendar year are lost and can not be rolled over into the next calendar year. If a colleague terminates or reduces his/her regularly scheduled work hours below the benefits-eligibility minimum of twenty (20) hours per week, any remaining accrued Personal Time will be paid to the colleague in a lump sum. The lump sum is paid at the rate of pay immediately preceding the status change or termination, and does not include payment of shift or week-end differential. If in any calendar year, a colleague who has received Personal Days, terminates employment and is subsequently rehired, he/she will be treated as follows: If Personal Days have been used or cashed out, no additional Personal Days will accrue in that year. If Personal Days have been sold under LaheyFlex, the weekly credits as originally calculated will resume. Procedure 1. Request Process ET or ESL Use Responsible Person Colleague Action 1. If scheduled Earned Time is requested, obtains and completes his/her department s ET Request Form, following the department s requirements regarding advanced notice for requesting time off, and submits it to manager. 2. If unscheduled ET is necessary, calls manager as soon as possible before regularly scheduled work hours to inform him/her of time off needed and follows department s guidelines and requirements regarding needed unscheduled time off. Manager 3. If ESL is available and requested, manager verifies that five (5) consecutive working days (prorated for part time) of ET have been used before ESL use begins. 4. Determines if absence is an FMLAqualified absence and ensures that appropriate forms are given to the

9 colleague. 5. If ET/ESL use is approved, signs request and returns form to colleague. 6. If ET/ESL use is not allowed, returns request form to colleague with explanation. Colleague 7. If approved, during the work week ET/ESL is being used, colleague indicates the number of hours of ET/ESL used in the appropriate columns on that week s time card. 8. If approved and pre-payment of ET is desired, obtains a Request for Pre- Payment of ET form from payroll (Note: this can only be requested in full week blocks, for not more than two (2) weeks and only for ET not ESL). 9. The completed Request for Payment of ET form must be returned to payroll department within the time-frame specified on the form. 10. Submits time card to payroll department the week before the absence, indicating pre-paid Vacation in the ET column. 11. If FMLA-qualified absence, completes appropriate forms and returns to manager for approval. Payroll Department 12. Adjusts ET balance by number of ET hours used on colleague s time card and pays colleague accordingly. 13. After receiving completed pre-payment form, adjusts ET balance by the number of pre-paid weeks requested and issues

10 check(s). 2. ET Cash in Process Payroll Department Colleague 1. Distributes ballots to all cash-in eligible colleagues prior to each ET Cash-In Week. 2. If eligible and cash in desired, decides what amount of ET to cash in, up to forty (40) hours (prorated for part time). Forwards request to manager for review and approval. Manager 3. Verifies with colleague that requirements in policy section, ET Cash In Option are met and approves or denies the request. Colleague 4. If request approved, forwards request to payroll department for processing. 5. If request denied because of unmet requirements of policy section, corrects and reviews again with manager. Payroll Department 6. Verifies that the request meets requirements of policy section, ET Cash In Option. 7. If met, issues check to colleague and adjusts ET balance according to the number of days/hours that were cashed in.