Hamilton, Middletown, Butler County and Warren County each have a total liability of more than $5 million for unused employee sick and vacation leave, according to each government’s most recent comprehensive annual financial report.
The Journal-News examined payouts for these governments and non-university state employees. The examination found 105 employees who were paid in excess of $40,000 for unused sick and vacation leave last year — 98 at the state level, three each in Hamilton and Middletown, and one in Warren County.
This included Warren County administrator David Gully, who retired in August 2016 and cashed out $15,000 in unused sick leave and $41,195 in unused vacation.
The ability to accrue sick and vacation leave and cash it out annually or upon leaving employment is a rare perk in the private sector, according to a 2016 survey by the Society for Human Resource Management.
That study found just 19 percent of private, for profit companies allow their workers to cash out vacation leave, compared to 36 percent for government employers. And only 8 percent of those companies allow workers to cash out sick leave, compared to 19 percent of governments.
“We obviously understand that people deserve to have some sick leave and vacation time and be able to utilize that while employed,” said Greg Lawson, policy director of the conservative Buckeye Institute. “But to be able to accumulate vast quantities of that and use it as a payout, we think that’s over-stepping and creates fiscal problems, and it’s not fair compared to what private sector employees get.”
But officials with public employee unions say private sector workers get benefits not available to the public sector, such as stock options and extended illness benefits. They say the discussion should be about extending sick leave to more companies, not taking benefits away from public servants.
“Every citizen in Ohio is an employer of public employees, and everyone wants the best person for the job. You want them alert and able to do the work, and you want a high-performance workplace,” said Joe Weidner, spokesman for AFSCME Council 8, which represents 39,000 Ohio workers, mostly in local government.
“You’re depending on the guy who gets the stop light to work, the coroner’s office, people at rest homes, people at the zoos, you want the people who do the best work,” he said.
Although collective bargaining agreements often determine how much an individual employee can cash out, many state workers can accrue no more than three years’ worth of vacation leave, according to state law.
The payouts for vacation leave are often paid at 100 percent of the employee’s wages at retirement. Sick leave is paid out at 50 percent to 55 percent of their base wage.
In 2016, separation payouts cost the state of Ohio more than $27 million, according to a Journal-News analysis of state pay data.
The largest payout to a state employee went to John Foy, who received $109,658 when he left his job as a law enforcement training officer with the Ohio Attorney General’s Office in mid-2016. His gross pay was $141,982.
Most state employees also have the ability to cash out some of their unused sick leave each year without leaving their job. This is less common in local governments.
These payouts cost the state more than $33 million last year, the Journal-News found.
The largest payouts for unused leave under this policy went to workers at the Ohio Treasurer of State’s Office. Deputy Treasurer Seth Metcalf cashed out $18,186 in leave last year, bringing his total salary to $214,742.
Policies vary among local governments, and even within local governments based on various collective bargaining agreements.
For most city workers, Hamilton last year combined sick and vacation leave into PTO, accrued based on years of service. As many as 480 hours of unused PTO can be cashed out at full value upon separation.
Butler County’s general policy allows employees to cash up to two years’ worth of vacation at and 320 hours of sick leave. Warren County allows more than three years of vacation accrual 1,200 hours of sick leave.
Middletown doesn’t let workers accrue vacation leave, but allows them to cash out up to 24 hours of sick leave and one week of vacation every year.
“Rather than taking off a week, you get paid for it and you’re here working,” said Middletown Finance Director Jake Burton.
Middletown paid $125,629 in annual payouts last year, as well as $437,748 in separation payments.
HR consultant: Payouts don’t make sense
Mary Rita Weissman, who with her husband runs an area human resources consulting firm, said it makes little sense for employers to allow workers to cash out vacation leave.
“All of my clients do not pay out vacation when someone has left, because philosophically it is not an earned benefit. It is a benefit of continued employment,” she said. “The reason to give someone vacation is they need time to be away from work, to recharge, to spend time with family, to do things they can’t do because they are at work every day.”
Weissman said companies are increasingly moving toward lumping sick and vacation leave into one pool. This gives hard-working employees who are rarely sick more vacation, and reduces incentive for employees to call off sick when they’re not.
Small- and medium-sized businesses especially lean toward the PTO model, Weissman said. The Society for Human Resource Management study found only 17 percent of employers allow workers to cash out unused PTO.
“I don’t have any clients who don’t want to pay every employee they have as much as they can pay them and still make a profit,” she said. “Whatever dollars (workers) take out when they walk tout that door are not available for the people who continue to work for that company.”
Likewise, the Buckeye Institute’s Lawson said, small and medium-sized governments would have the most to gain from moving away from such payouts.
Butler County paid $770,742 on unused leave for departing employees last year, and Warren County $403,486.
Bill would limit higher ed sick leave
Lawson said he believes many in Ohio’s Republican-controlled General Assembly would support cutting back these payments, but lawmakers are gun shy about taking on public employee benefits after the resounding defeat of the 2011 Senate Bill 5 effort to limit collective bargaining.
The current draft of the state budget does include a measure that cuts back sick leave accrual for state college and university employees to 3.1 hours per 80 hours of service — the same state employees receive.
AFSCME’s Weidner said reducing sick leave especially hurts single parents — often women — who need time off to take care of sick children.
He believes employee benefits should be decided at the local level in collective bargaining negotiations, not mandated by lawmakers.
“A lot of folks don’t think the legislators should stick their nose in local issues,” he said. “Let the administrators and workers discuss it and figure out what’s best for their community.”
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Using Ohio public records laws or other available resources, the Journal-News has acquired payroll data for area counties, cities, townships and public colleges and universities. Our database currently contains more than 300,000 salaries from 2014-16. Search the database at www.Journal-News.com.