There are three types of time off for an Amazon Tier One associate: PTO (personal time–48 hours per year); UPT (unpaid time off–20 hours per quarter/80 per year); and Vacation (40 hours first year). PTO and vacation are distributed incrementally, a few hours per pay period. UPT is dispersed on the first day of the quarter in 20 hour chunks. Personal time and unpaid time off can be used anytime. Vacation must be requested twenty-four hours in advance, must be approved, and cannot be taken during blackout periods (peak and prime day). Full-time shifts at SDF8 are ten hours, so, forty-eight hours of personal time is not six days off per year, it is 4.8 days off. A full-time associate’s weekly shift is four ten hour days, with a fifth day of mandatory overtime called at the company’s discretion. If a worker is late or absent for mandatory overtime, she must cover the absence with PTO (personal time) or UPT (unpaid time off), unless she has been previously approved for vacation. An employee can accumulate a maximum of 80 hours UPT in her account. If an employee falls below 0 hours of banked UPT, it is grounds for automatic dismissal.
The following examines UPT (unpaid time off) as it relates to VCP (variable compensation pay):
Any time the company discusses Tier One employee compensation, it always points to VCP (variable compensation pay) and stock as part of the employee’s total compensation. The company knows that only a percentage of employees receive some VCP payouts, an even smaller percentage receive large or maximum VCP payouts, and an even smaller percentage ever receive any stock. (More on stock below.)
At orientation, the company shows new employees cartoon character videos of a hypothetical scenario where an associate, working for two or more years with the company, by combining base pay with VCP (variable compensation pay) and stock, is actually making [x] dollars per hour. The company, throughout the year, will re-show the video during some All hands meetings. In this way, Amazon explains to its employees how it reaches its figures regarding an employee’s “total compensation package.”
VCP (variable compensation pay) payouts are affected by two factors: 1) individual employee attendance, and 2) facility site to plan production goals. Monthly maximum VCP payouts for an employee, during the first three quarters of the year, are 8% gross pay from the previous month. For the fourth quarter (peak), maximum payouts are doubled to 16%, generally making December and January payouts pretty decent. So, in a normal month with a possible 8% VCP payout, 4% is based on an individual employee’s use of UPT (unpaid time off) and 4% is based on attainment of facility wide production goals set by the company (which the individual employee has no control over.) If an employee uses one instance of UPT, the portion of VCP based on attendance is reduced to 2%. For the second instance of UPT usage, the attendance portion is reduced to 0%. The site to plan portion of VCP payouts is sometimes a full 4%, sometimes 2%, often 0%.
Most employees are aware of the relation between VCP (variable compensation pay) and UPT (unpaid time off) usage. Most employees start out determined not to use UPT. But most begin using it after some time as the employee will feel the need to extract herself from the work environment for periods of time in excess of regular (sometimes minimally scheduled) time off, even though the employee understands that it is a costly proposition.
What the company terms abuse of UPT can often be an act of desperation. The employee feels compelled to use UPT even though she understands that she will not only miss paid work hours, but she will have to pay back VCP (variable compensation pay) to the company for using those unpaid UPT hours. Using UPT (unpaid time off) becomes part of an employee’s strategy for maintaining health, family obligations, life obligations, and work obligations.
UPT/VCP is a bit of sleight of hand by the company. I don’t have the statistics, but I suspect this program takes millions of dollars a year in would-be pay and puts it back into Amazon capital.
It costs the employee. The employee has to pay the company to use it. Is VCP (variable compensation pay) pay? or benefit? or bonus? If the company is representing VCP as part of employee compensation, then it should be irrevocable, not subject to penalty for using company sanctioned, much needed time off. This is sleight of hand pay for real-as-it-gets work.
One employee put it this way: “UPT, people think it’s a good thing, but it’s not. They should just give us ten days a year personal time.”
My suggestion to the company would be to eliminate forfeiture of pay for using UPT (unpaid personal time), and my suggestion to employees would be to demand this. Further, I would suggest eliminating VCP (variable compensation pay) in favor of a standardized living wage that I will discuss below.