California’s $3.5 billion liability for workers’ unused time off

March 8, 2019

With California state workers hoarding vacation days and other time off and often receiving six-figure payouts for doing so, taxpayers are faced with another massive liability, in addition to pension debt. [LA Times]

According to the most recent estimate available, which was released in 2017, state workers have accrued $3.5 billion in pay for unused time off. In 2018 alone, California paid state workers nearly $300 million for banked time off, based on limited data available.

Last year’s data includes most state agencies and departments, but not legislative employees or other taxpayer-funded institutions like the public university systems. So, the total cost to taxpayers of accrued time off that was cashed out in 2018 was probably much higher than $300 million.

In 2018, a prison surgeon in Riverside received the largest payout for unused vacation and other leave. The prison surgeon pocketed $456,002.

Bijan Sartipi retired last year after working for 36 years as a transportation engineer, including a stint as the director of Caltrans in Alameda County. Sartipi received a payout of $405,119 for unused time off.

Sartipi’s payout was the equivalent of more than 4,400 hours of vacation. Sartipi retired with an annual salary of $191,208.

Last year, more than 450 state workers received six-figure checks for unused time off when they left their jobs. The amount of six-figure payouts marked a 60 percent rise since 2012, when 280 workers cashed out $100,000 or more of unused paid leave.

Vacation payouts can surpass annual salaries for some employees, such as Sartipi. The cost of each vacation hour increases over time because state labor code requires employers to compensate workers for unused time off based on the employees’ final pay rate, not what they were earning when the hours were accrued.

Many of the employees who receive the highest payouts receive raises toward the end of their employment with the state.

Sartipi received a 4 percent raise in his final years of work, giving him an additional $15,000 for unused time off.

When state employees cash out their banked leave, the state government not only pays them for the hours they have on the books, but also for a projected total of additional time they would have earned had they taken the days off. Hence, an employee with 640 hours of vacation would also be paid for all of the vacation and holidays they would have earned had they taken those 80 days off.

The rising accrued vacation liability stems from an increasing number of state workers retiring and lax enforcement of California’s cap on pay for unused time off. California mandates vacation balances for most employees be capped at 640 hours, though the rule is only sporadically enforced.

By contrast, most private sector employers cap accrued vacation between 40 and 400 hours and do not allow workers to earn time beyond those limits.

Some state departments have tried to mitigate the vacation balance by offering employees the opportunity to cash out up to 80 hours of accrued time off each year, thus reducing the likelihood of a larger payout when workers retire at a higher salary. Over a three-year period ending in 2017, the state wrote checks totaling $111 million in attempt to reduce vacation balances.

State Sen. John Moorlach (R-Costa Mesa) said reforming California’s vacation policy would help contain liabilities, but he does not believe doing so is politically feasible.

“I doubt Gavin Newsom will go to the bargaining table to see if he can fix it,” Moorlach said. “Our governors are very reliant on public employee union contributions, so this is just not going to happen.”

California’s powerful public-sector unions gave large contributions to Gov. Newsom, as well as to Democratic lawmakers, who have super-majorities in both houses of the Legislature. Changes to public-sector union contracts must be negotiated at the direction of the governor and approved by the Legislature.


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Robert1

1,800 Companies Left California In a Year – With Most Bound for Texas


https://cssrc.us/content/icymi-1800-companies-left-california-year-most-bound-texas


smiley

Keep voting Democratic and in addition to this nonsense you will be paying to house illegals thanks to Gov Nuisance, the bulls### train to nowhere, and likely an overturn of prop 13 in the near future.


Rambunctious

Socialism is very expensive….


AmericaTheFree

And capitalism isn’t?


AmericaTheFree

This isn’t just a Cali’ thing… My landlord, a 30+ year employee of Oregon (parole officer, correctional officer) openly brags about how while he was a supervising parole officer at least one day out of the week he would hunt or fish while on state time; carrying his rod, real and gun in his state provided vehicle as not to miss any opportune time to frick off on the tax payers dime. He now collects a fat state pension check, Social Security (retirement) and a military disability check (agent orange when he was a REMF in Viet Nam? Yea, right….) Public sector unions, the blight of this country…


MysticOne

I work for the state, I am only allowed to have 30 days of vacation saved up. Up until last year If I had any more than 30 days vacation at the end of the fiscal year it was a ‘use or lose’ scenario. I lost a lot of $$ over the last 13 years not being able to take vacation days and being forced to lose them. Last year the state finally changed the rules and started allowing us to cash out our excess vacation days instead of losing them without compensation. While there are plenty that abuse the system and make way more money working in government than is reasonable, there are 10x more that are vastly under paid and trying their best to make ends meet while trying to provide a quality education in the school system for the coming generations. Even in the school system there are huge discrepancies in pay between administrators, faculty, and staff that are in no way justified. Administrators can and have wasted millions of taxpayer/bond dollars and they get kudos and raises for doing so. Staff points out blatant waste of money, shows how it was wasted and how not to waste money, calls the state to have the claims investigated and gets fired for it. Rinse and repeat and we have the California government.


DocT

I also work for the state…..but not like you. I’m self employed so I pay massive amounts of taxes to the state and fed. More than you because I’m self employed.


I get ZERO days of vacation saved up. ZERO days of sick leave. The idea of “cashing out” vacation days is ludicrous to a self-employed tax payer. I don’t have workmans’s comp either. COLA raises? LOL!!!


State and government employees have sweet deals.


copperhead

“Only” 30 days vacation per year! Slavery!


MysticOne

That’s 30 days total saved, 3 years of working full time to accrue that much. 10 days of vacation a year.


copperhead

The point is that it is preposterous that anyone essential to a business could take an entire month off whether the vacation time is accrued or otherwise. The fact that vacation and sick leave accrue at all is ridiculous.


I’m taking my vacation. See you in a month. If I took a month off work there would be no business left to come back to.


slomark

State workers could take 60 days off a year and everything would still keep ticking. We’ve got too many state employees!


shishkabob141

CA, where we’re just so much smarter and better than those other states!


RalphKane

Heh, yeah…Commiefornia is so much “smarter” that taxpayers are fleeing this place in droves.


Odd thing is, once they relocate to other states they vote the same leftist idiots into office who enact the very policies they fled.


Commiefornia’s #1 export is the leftist virus.


Russ J

Money grubbing state employees. Political prostitution at it’s finest. Well……….how else can you afford to live in California but to fleece the tax payers? At least 50% of their paycheck is coming from the top 1% of income earners. Too bad they have drag us “middle class” blue collar folk through the tax-sewer.


shelworth

To paraphrase a great philosopher; “It’s good to be a King”…


DocT

this shouldh’t be a problem. Everyone knows that people who get jobs with the State are more important than people who work in private industry and pay taxes and fines.


Simply tax the half-wits who work outside the government more….or force them via legislation to forfeit a portion of their own pathetic retirement plans in order to cover the retirement dreams of their betters.


Everyone will love this. People will want to move to CA just to pay these costs or better yet, get one of these jobs! And yes, this is sustainable! Just raise taxes. Easy.


incompingov

When you hear of government waste fraud and abuse, this is exactly what it means…and it won’t be addressed. Remember this the next time the governor pleads for a tax increase because the state desperately needs the money. It’s total BS! As noted, private industry doesn’t allow this kind of gaming of the system.


kayaknut

Call it what it is, not gaming the system, it is plain and simple theft of our money.