Vacation and Reduction in Force Payouts Process

Last updated on May 8, 2023 3 min read Vacation and Reduction in Force Payouts Process


To establish guidelines and procedures for funding Vacation or Reduction in Force (RIF) Payouts made to Boston University employees charged to Sponsored Research Accounts.

Covered Parties

These procedures apply to BU employees funded directly by Sponsored Research.

University Process

Effective July 1, 2017 (FY2018) Boston University received approval from our cognizant agency, the Department of Health and Human Services, for the inclusion of two new benefit costs in the University’s fringe benefit rate. These additions to the fringe benefit rate are Vacation payouts and Reduction in Force payouts. Before FY2018, such payouts were directly charged to Sponsored Research Accounts when allowed. Beginning in FY2018, these payouts are funded from a new cost pool, which is funded by the fringe benefit rate.

Employee Handbook Definitions

Vacation Payout – Employee Handbook, Section 301 – 301.8

Vacation leave is an authorized paid absence from work that employees accrue as a result of their employment at Boston University. All regular, full-time employees and regular, part-time employees scheduled to work at least 50 percent of the regularly scheduled workweek are eligible upon hire to accrue and use Vacation Leave in accordance with the provisions found within the Employee Handbook.  Employees who have no outstanding obligations to the University will be compensated for unused Vacation Leave at the time their employment with Boston University terminates, up to a maximum of the number of days that they would accrue over a two (2) year period. Terminating employees who have completed three (3) months or more of continuous service will be paid for their unused Vacation Leave. Payment will be computed using the employee’s base rate of pay at the time of termination.

Reduction in Workforce – Employee Handbook, Section 205 – 205.4

In the event that it becomes necessary for Boston University to eliminate positions, the University will, whenever practical, eliminate open positions that result from employee turnover (attrition).  Should the University find it necessary to reduce its workforce by eliminating filled positions, affected employees will be laid off in accordance with the provisions found within the Employee Handbook. Employees whose positions have been eliminated and who have completed three months of continuous service are eligible for severance pay subject to 205.2 as found in the Employee Handbook.  Severance pay is based on the employee’s most recent date of hire and is pro-rated for a partial year. Severance pay is calculated at the rate of one (1) week’s pay for each full year of continuous service at Boston University.

Individuals who are hired as “term appointments” – that is, for a fixed time period, or with an appointment tied to the term of a particular Sponsored Award, are not eligible for severance pay as their employment at BU is limited to a specific term at the outset. The employer/employee relationship ends when the end date is reached, or at the end of the award. Principal Investigators should refer to the Employee Handbook, section 204.3, or contact Human Resources for additional information about this type of appointment. Term appointments do not affect an individuals’ payout of earned vacation time.

Process for Funding Payouts from the Payout Pool

Boston University implemented a process to automatically move salary related to Vacation Payouts and/or Reduction in Force Payments to the “Pool”. If Departments see that the charge remains on their Sponsored Account, they should reach out to their Sponsored Programs, Post Award Research Administrator immediately for assistance.

The table below shows the criteria used to determine eligibility for payout from the “pool”:

Vacation PayoutReduction in Force Payout
BU Sponsored Awards



BMC Sponsored Awards



Any questions or concerns with this process should be directed to the Assistant Vice President, Sponsored Programs Post Award at 617-353-4555.

Responsible Parties

Fiscal OversightSponsored Programs Post Award617-353-4555
Human Resource PolicyHuman Resources617-353-2380


These procedures were placed into effect in July 2017; February 2022; Updated June 2022.

Information For...

Back to Top