83-5

June 4, 1985

Re: Two-Week Absence Policy

Dear Mr. ________:
This is in response to your letter dated May 17, l985, which inquired about our policy requiring all bank employees to take a two-week vacation each year.
There is no state statute or regulation which explicitly provides that a bank employee must take at least two consecutive weeks of vacation. However, the Department does consider this a matter of safe and sound banking practice.
A vacation policy of two consecutive weeks is considered an important internal safeguard largely because of the fact that perpetration of an embezzlement of any substantial size usually requires the constant presence of the embezzler in order to manipulate records, respond to inquiries from customers, and otherwise present detection. It is also important to recognize that the ‘benefits of this policy may be totally eroded if the duties performed by an absent individual are not assumed by someone else.
Examiners are instructed to list violations of this policy in the Report of Examination, and to discuss the matter with senior bank management. Violation of this policy could result in regulatory action.
Since our policy is based on concern for the Bank’s safety, we have no opinion on when an employee’s right to the vacation period might “vest”.
Please feel free to contact us if you have any further questions on this matter.
Very truly yours,
LOUIS CARTER
Superintendent of Banks
By: Original signed by Carol Matsunaga
CAROL L. MATSUNAGA
Counsel

CLM:fs