At last night’s meeting, the City Council approved a resolution making some changes to the personnel policies in regards to the vacation hours and leave benefits.
Staff has recently recommended reducing a large financial liability for future payouts of accrued and unused sick and annual leave. The changes to the policies will reduce the long-term costs of the payout of the sick leave and annual leave benefits. The City is working with a payroll specialist and has budgeted for approximately ½ of the cost of Tier II sick leave payout in the salary lines for each affected person.
The total payout for FY2019 is estimated to be approximately $175,000. Once the Tier II balances are paid out, there will no longer be a future liability and that benefit will be eliminated. After October 1, 2018, the maximum annual leave payout will be 320 hours, a significant reduction from the current 472-hr maximum. If employees plan ahead properly, they will not lose any earned annual leave.
It is important to remember that the current policy has a maximum carry over of 280 hours at calendar year end, plus an allowable transfer of up to 80 hours to Tier II sick leave, any hours over that were forfeited. The major difference is that the new maximum is “rolling” instead of just at the end of the calendar year. It was sometimes difficult to give all employees time off at the end of the year so they didn’t lose any of their leave.
With the change in this policy, employees aren’t losing anything other than a future unreasonable benefit, particularly in light of the fact that the City joined the Maryland State Retirement System in 2014 which provides additional funding at retirement for employees. The policy change has been proposed to eliminate unreasonably large payouts of accrued sick and vacation balances when an employee separates and or retires from the organization. These changes almost exclusively impact mid to senior and highly compensated staff. These policies are grandfathered such that no further accumulation will occur.
The City is providing staff with pay stubs and continues to work hard every day to maintain an engaged, productive, stable, and committed workforce. The Mayor and Council have been very supportive of our employees over the years—some examples of that are: giving City employees cost-of-living increases each year except one during the recession (when most other municipalities did not); joining the Maryland State Retirement and Pension System in 2014; approving our excellent benefits package each year in spite of rising costs; approving a compensation study and implementing the results in 2017; and supporting generous education and training budgets in every department.