Julie --
They can't because there default method within Project Server to make this
happen, short of using administrative projects for this purpose. We do not
recommend the user of administrative projects to track nonworking time,
however, since their use does not cause Project Server to automatically
reschedule tasks in regular projects due to the entry of nonworking time.
Your best bet would be to establish a methodology such as the following:
1. Resource submits nonworking time request to the responsible manager
2. Responsible manager approves the nonworking time
3. Resource submits the nonworking time via e-mail to the Project Server
administrator
4. Project Server administrator enters nonworking time on resource's
calendar in Enterprise Resource Pool and adds a resource Note to document
the nonworking time
Hope this helps.