Sarlo Bill Limiting Sick Leave Payouts, Vacation Carry-Over For Public Workers Heads To Governor’s Desk

TRENTON – The Assembly today passed legislation Senator Paul Sarlo sponsored to limit the unused sick-leave payouts and vacation carry-over for all public employees.

The bill – which passed 78-0 – now heads to the Governor’s desk to be signed into law. The Senate cleared the measure last month.

“One of the fastest growing fiscal concerns for towns is the enormous payouts that need to be given to some retiring employees for unused sick and vacation time,” said Sarlo (D-Bergen). “Left unchecked, these bonuses can easily match the salary of a full-time employee, if not more. If towns are to be able to remain viable under the new property tax cap, this reform is sorely needed.”

Under the Sarlo measure (S-2220), all public employees would be brought under the $15,000 cap in unused sick leave that is in effect for workers hired after June 2007. Employees who have not accumulated $15,000 worth of unused leave would be capped once they reach that amount. Employees who have accrued in excess of $15,000 in unused leave would be frozen at their current level.

Vacation carry-forwards would be capped at one year only. Employees who have accrued more than one year’s worth would be able to carry that amount, but could not bank more time.

Sarlo noted a report in yesterday’s Asbury Park Press which documented that in Stafford Township, 14 township employees have retired since the start of this year, leading the municipality to incur a total cost of $722,972. The municipal budget had originally set-aside $105,000 and held $200,000 in reserve for anticipated retirement payouts.

“There is nothing wrong with allowing employees to bank unused leave, but there’s a point at which it really becomes absurd,” said Sarlo. “One retirement could easily eat up a community’s space under the tax cap. Our simple goal is to bring these payments back in line with reality, and ensure local officials don’t have to choose between providing essential services or paying out tens, or hundreds, of thousands to one person.”

The bill also would prohibit the practice of “terminal leave” – where employees exhaust sick and vacation time during their last year of employment, allowing them to keep earning a full paycheck – for all future employees.

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