Order Code RL32596
CRS Report for Congress
Received through the CRS Web
Sick Leave: Usage Rates and Leave Balances for
Employees in Major Federal Retirement Systems
September 22, 2004
Curtis W. Copeland
Specialist in American National Government
Government and Finance Division
Congressional Research Service ˜ The Library of Congress
Sick Leave: Usage Rates and Leave Balances for
Employees in Major Federal Retirement Systems
Summary
Full-time federal civilian employees receive 13 days of sick leave each year, and
may carry over an unlimited amount of unused sick leave from year to year. At the
time of retirement, employees in the Civil Service Retirement System (CSRS) (those
hired before 1984) receive credit in the computation of their civil service retirement
annuities for any unused sick leave they have at the time of retirement.
In contrast, employees in the Federal Employees Retirement System (FERS)
(those hired after 1983 and others who transferred to FERS) generally receive no
credit for unused sick leave at the time of retirement. As a result, some believe that
FERS employees will use more of their sick leave as they approach retirement
(resulting in productivity losses) than their CSRS counterparts. The conference
report for the legislation creating FERS in 1986 urged the Office of Personnel
Management to examine this issue, but to date the agency has not done so. CRS
obtained data from a payroll processing organization for about 500,000 federal
employees and determined that FERS retirees and FERS employees in that group
who were eligible to retire or approaching eligibility used substantially more sick
leave and had much lower sick leave balances than comparable CSRS retirees and
employees.
A number of non-federal organizations have developed policies designed to
encourage their employees to conserve sick leave. For example, all except five state
governments provided some type of compensation to employees for unused sick
leave at retirement, usually either as cash payments, service credit in the computation
of annuities, or payment of health or life insurance premiums. The states generally
limited these payments in some way (e.g., capping the number of hours of sick leave
payable).
FERS employees comprise an increasing percentage of the federal workforce,
and by 2014 virtually all federal employees will be in FERS. By the year 2010, the
number of FERS employees becoming eligible to retire will be roughly the same as
in CSRS. The current policy of providing no compensation to FERS employees for
unused sick leave may partially explain their higher usage rate and lower leave
balances, and if so, may be costing the federal government tens of millions of dollars
each year in lost productivity. Granting some form of compensation for unused sick
leave, even if entirely paid for by the federal government, might encourage
employees to conserve sick leave and cost less than the current policy. Alternatively,
agencies could be more stringent in their administration of federal sick leave policies.
This report will be updated when additional or more current data on sick leave
use become available, or if changes in federal sick leave policies are contemplated.
Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Federal Sick Leave . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
CSRS and Sick Leave . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
FERS and Sick Leave . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Indications of Greater Sick Leave Use by FERS Employees . . . . . . . . . . . . . 8
FERS Employees Appear to Use More Sick Leave Than Their
CSRS Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Differences in Sick Leave Usage and Balances . . . . . . . . . . . . . . . . . . . . . 10
Sick Leave Policies in Other Organizations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Unused Sick Leave . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Sick Leave Policies in State Governments . . . . . . . . . . . . . . . . . . . . . . . . . 14
Cash Payment Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Service Credit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Insurance Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Policy Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
More Stringent Enforcement of Sick Leave Policies . . . . . . . . . . . . . . . . . . 16
Providing an Incentive to Conserve Sick Leave . . . . . . . . . . . . . . . . . . . . . 16
A Comparison of Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Appendix A: State Sick Leave Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
List of Figures
Figure 1. Number of FERS Employees Is Increasing . . . . . . . . . . . . . . . . . . . . . . 3
Figure 2. Number of Federal Employees Becoming Eligible to Retire,
2004-2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
List of Tables
Table 1. FERS Employees Used More Sick Leave Than CSRS Employees
As They Approached Retirement Eligibility . . . . . . . . . . . . . . . . . . . . . . . . 10
Table 2. FERS Employees Had Lower Sick Leave Balances
Than CSRS Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Table 3. FERS Retirees Had Lower Sick Leave Balances
Than CSRS Retirees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Table 4. Sick Leave Policies in State Governments . . . . . . . . . . . . . . . . . . . . . . 19
Sick Leave: Usage Rates and
Leave Balances for Employees in
Major Federal Retirement Systems
Introduction
Pensions for nearly all federal civilian employees are provided through one of
two retirement programs — the Civil Service Retirement System (CSRS) or the
Federal Employees Retirement System (FERS).1 Most federal civilian workers hired
before January 1, 1984, are covered by CSRS, whereas those hired after that date are
covered by FERS (as are employees who voluntarily switched from CSRS to FERS
during “open seasons” held in 1987 and 1998).
CSRS and FERS are similar in some respects. In both retirement systems,
employees’ annuities are a function of age, length of federal service, and final
average pay.2 The normal retirement age (without reduction of annuity) under both
CSRS and FERS is 55 for employees born before 1948 who have at least 30 years of
service.3 Both retirement systems also allow retirement at age 60 for employees with
20 or more years of service, and 62 for employees with at least 5 years of service.
Also, employees in both systems receive 13 days (104 hours) of sick leave each year,
and may carry over an unlimited amount of unused sick leave from year to year.
Therefore, an employee who carries over an average of nine days (72 hours) of sick
leave each year during a 30-year career would accumulate at least 2,160 hours of
unused sick leave by the time he or she is eligible to retire.
One of the many ways in which CSRS and FERS differ is in how accumulated
sick leave is accounted for at the time of retirement. In the CSRS system, retiring
employees receive service credit in the computation of their annuities for any unused
sick leave they had at the time of retirement. For example, a retiring CSRS employee
with 30 years of service and one year (2,087 hours) of accumulated sick leave would
1 Although the federal government has many different retirement plans, CSRS and FERS are
by far the largest. In this report, “federal civilian employees” refers to those in the CSRS
or FERS plans. For a more thorough discussion of these two plans, see CRS Report 98-810
EPW, Federal Employees’ Retirement System: Benefits and Financing, by Patrick Purcell.
2 FERS annuities are generally smaller than in CSRS because they are only one component
of the system. A more detailed description of the two systems is provided later in this
report.
3 The FERS normal retirement age increases for employees born in 1948 or later, and
eventually will reach age 57 for employees born in 1970 or later.
CRS-2
be considered to have 31 years of service for purposes of annuity computation.4 In
sharp contrast, FERS retirees generally receive no service credit or other
compensation for their accumulated sick leave.5 As a result, some observers believe
that FERS employees will use their sick leave more frequently than CSRS
employees, particularly as they approach retirement age, resulting in reduced
productivity, increased costs, or both.
To discourage this anticipated development, some observers have advocated
changing FERS to provide some kind of value for unused sick leave (e.g., allowing
full or partial service credit to be used in annuity calculations, or providing full or
partial lump-sum cash payments for such leave).6 Others believe that the CSRS sick
leave benefit is excessively generous, and that FERS should not replicate that
generosity. Little is currently known, though, about employees’ sick leave usage
rates in the two retirement systems and, therefore, whether any problem exists at all.
This report provides data on sick leave usage rates for employees and retirees
in CSRS and FERS. It also provides information on unused sick leave policies in
private sector and other public sector organizations (e.g., state governments). First,
though, the report provides some background information on CSRS and FERS trends
and federal sick leave policies in general.
Background
Data from the Office of Personnel Management’s (OPM’s) central personnel
data file (CPDF) indicate that, because all new federal employees within the past 20
years have been put in FERS, the number of FERS employees in the federal
workforce has increased substantially, whereas the number of CSRS employees has
declined.7 (See Figure 1.) By 1995 — 11 years after FERS began — more federal
employees were in FERS than in CSRS. As of September 30, 2002, more than 1.7
million federal employees were in FERS, compared with fewer than 900,000 in
4 The congressionally mandated number of hours in a work year is 2,087. Only full years
and months are counted in the annuity computation. For example, if a full-time employee
worked 30 years and had 835 hours (four months and 24 days) of accumulated sick leave
at the time of retirement, the employee would be credited with 30 years and four months of
service; the 24 additional days would be dropped.
5 FERS employees who transferred from CSRS receive credit for sick leave balances at the
time of the transfer or at the time of retirement, whichever is smaller.
6 For example, in testimony before the Senate Committee on Governmental Affairs on
February 4, 2004, the President of the National League of Postmasters said, “We also need
to address the issue of sick leave for FERS employees. Currently, they get no credit for
unused sick leave at retirement. We need to change this rule so they could sell back sick
leave or get credit at retirement.”
7 The CPDF is a government-wide human resources reporting system. The data come from
executive branch agencies who send OPM extracts from their human resources information
systems.
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CSRS.8 At that rate, by 2014, virtually all federal employees are expected to be in
FERS.
Figure 1. Number of FERS Employees Is Increasing
2,500,000
FERS 2002:
2,000,000
CSRS 1992:
1,708,523
1,608,455
1,500,000
CSRS 2002:
FERS 1992:
897,240
1,000,000
Employees
1,219,051
500,000
0
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
CSRS
FERS
Trend
Note: The employment projections in this figure are extrapolations from current trends, and end in
2014. At that point, assuming the size of the federal workforce remains relatively constant, the number
of FERS employees will level off.
Source: OPM.
The data in Figure 1 include all federal employees in CSRS and FERS.
Excluding part-time and temporary employees and employees in the Postal Service,
intelligence agencies, and law enforcement,9 as of September 30, 2003, nearly
490,000 career federal civilian employees were in CSRS, compared with more than
1 million employees in FERS. The two retirement systems varied substantially in the
proportion of employees eligible for retirement as of that date.10 Of the nearly
490,000 employees in CSRS, about 133,000 (more than 27%) were eligible to retire
as of September 30, 2003. Of the more than 1 million employees in FERS, nearly
42,000 (about 4%) were eligible to retire.
8 These data are from the Office of Personnel Management, and include part-time and
temporary employees as well as employees in the Postal Service, intelligence agencies, and
law enforcement. Data discussed later in this report exclude these types of employees.
9 It is appropriate to exclude these employees because some of them have different
retirement thresholds than employees not in those categories.
10 In this report, employees are considered “eligible” to retire if they meet the minimum age
and service requirements for an immediate unreduced annuity.
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Figure 2. Number of Federal Employees Becoming Eligible to Retire, 2004-2010
39,740
38,929
40,000
36,835
36,129
35,182
33,981
30,874
30,122
30,998 30,292
30,000
27,234
24,379
20,000
17,607
18,584
10,000
0
2004
2005
2006
2007
2008
2009
2010
CSRS
FERS
Note: Does not include part-time or temporary employees, or employees in the Postal Service, intelligence agencies, or
law enforcement.
Source: OPM.
As Figure 2 shows, the number of CSRS employees who will become eligible
to retire each year during the 2004 through 2010 period is expected to decline,
whereas the number of new FERS retirement-eligibles is expected to increase. By
the end of this period, both systems are expected to have about the same number of
new retirement eligibles.
Federal Sick Leave
Sick leave benefits provide paid time off while an employee temporarily cannot
work due to a non-work-related illness or injury. As noted previously, all federal
civilian employees receive four hours of sick leave each biweekly pay period, for a
total of 104 hours (13 days) each year. Employees must request sick leave within
such time limits as their agencies may require, and agencies may grant sick leave
only when supported by evidence they consider administratively acceptable. For
absences in excess of three days, or for a lesser period when determined necessary
by the agency, an agency may require a medical certificate or other administratively
acceptable evidence before approving sick leave requests.
The federal sick leave program has been expanded several times, allowing the
benefit to be used for purposes other than personal medical attention. For example:
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! the Federal Employees Family Friendly Leave Act of 1994 (P.L.
103-388) permitted employees to use up to 13 days of sick leave
each year to provide medical or personal care to a family member,
or to make arrangements for or to attend the funeral of a family
member.11
! the Treasury-Postal Service Appropriations Act for FY1995 (P.L.
103-329) permitted the use of sick leave to pursue activities related
to the adoption of a child.
! in 2000, the federal sick leave program was again expanded,
allowing employees to use up to 12 weeks of sick leave per year to
care for family members with a serious health condition.12
According to OPM, federal sick-leave usage rates have increased during this period
— from an average of 8.59 days of sick leave used per year in 1994 to 9.52 days in
2001. One possible explanation for this increase could have been the above-
mentioned changes in policy that allowed additional uses for sick leave. As
explained more fully later in this report, though, another possible explanation could
be the increasing number of FERS employees who are approaching retirement
eligibility.
CSRS and Sick Leave
The Civil Service Retirement Act of 1920 (P.L. 66-215) created CSRS to
provide pension benefits to federal employees. CSRS is a “defined benefit”
retirement plan in that the benefit is paid as a lifelong annuity based on years of
service and average salary in the last few years of employment. CSRS employees
accrue benefits equal to 1.5% of their highest three consecutive years of base pay
(often called the employee’s “high-three” pay) for their first 5 years of service, 1.75%
of their “high-three” pay for each year in years 6 through 10, and 2% of their “high-
three” pay for each subsequent year. Therefore, a CSRS employee who retires with
30 years of service would receive an annuity equal to 56.25% of the employee’s
“high-three” pay. CSRS annuities are adjusted annually for inflation and are financed
by contributions from both employees and the government (although the system is
not fully funded).13
Until 1969, CSRS employees forfeited any unused sick leave at the time of their
retirement. At that time, the Civil Service Commission (now OPM) estimated that
11 The act guaranteed full-time employees the use of five days (40 hours) of sick leave each
year to care for family members or for bereavement purposes. Employees wanting to use
more than five days were required to maintain a sick leave balance of at least 80 hours.
Part-time employees’ benefits were pro-rated.
12 Office of Personnel Management, “Sick Leave for Family Care Purposes; Final Rule,” 65
Federal Register 37234, June 13, 2000. To use the full 12 weeks of leave, employees are
required to maintain a sick leave balance of at least 80 hours.
13 See CRS Report RL30023, Federal Employee Retirement Programs: Budget and Trust
Fund Issues, by Patrick Purcell.
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about half of all retiring federal employees had zero sick leave balances, and the
other half had an average of about 44 days (352 hours) of sick leave that were
forfeited at retirement. Also, a House Post Office and Civil Service Committee
report noted that retiring employees used an average of 40 days (320 hours) of sick
leave during their last year of employment.14
In 1969, Congress enacted legislation (P.L. 91-93) to permit CSRS employees
to receive service credit for unused sick leave in the computation of their retirement
annuities. This change in policy made unused sick leave highly valuable. For
example, as noted previously, an employee retiring with 30 years of service and a
year of unused sick leave would get credit for 31 years of service for purposes of
annuity computation. If this employee’s “high-three” salary was $50,000, the
additional year of service would increase his or her pre-tax retirement annuity by
about $1,000 per year. Therefore, even before indexing for inflation, if the employee
received the annuity for 20 years, the unused sick leave would be worth about
$20,000. To pay for this and other changes in the retirement system, the law
increased employee and agency contributions to the civil service retirement fund
from 6.5% to 7.0% of pay.
This change in policy was expected to reduce federal employees’ use of sick
leave and to grant limited recognition to those who prudently utilized their sick leave.
In 1986, the General Accounting Office (GAO, now the Government Accountability
Office) examined the implementation of this change in policy, and reported that
employees who retired in 1984 and 1985 had significantly higher sick leave balances
than employees who retired in 1968, before the law was changed.15 Specifically, the
average sick leave balances for employees who retired in 1984 and 1985 were 38%
and 46% higher, respectively, than the estimated average balance of 1968 retirees.
GAO concluded that the changes made in 1969 had “contributed to reducing the
overall usage of sick leave and increasing the unused sick leave balances of retiring
federal employees.”
FERS and Sick Leave
The Federal Employees’ Retirement System Act of 1986 (P.L. 99-335) created
FERS with three basic elements — (1) Social Security, (2) a FERS basic annuity, and
(3) a thrift savings plan (TSP).
! The Social Security component is based on wages earned while a
federal employee. Employees may begin receiving reduced Social
Security benefits at age 62, but may receive a portion of that amount
in the form of a FERS supplement as early as age 55.
14 Cited in U.S. General Accounting Office, Federal Workforce: Retirement Credit Has
Contributed to Reduced Sick Leave Usage, GAO/GGD-86-77BR, June 1986.
15 GAO/GGD-86-77BR. Specifically, GAO reported that retirees in 1968 had an average
of 642 hours of unused sick leave. Retirees in 1984 averaged 884 hours and retirees in 1985
averaged 940 hours — about 38% and 46% higher, respectively, than the average retirees’
leave balance in 1968.
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! The FERS basic annuity is a defined benefit plan in which
employees retiring below age 62 accrue benefits at the rate of 1% of
their “high-three” average pay per year of service. Therefore, a
FERS employee retiring at age 58 with 30 years of service will
accrue a pension benefit equal to 30% of his or her “high-three”
average pay.16 Like CSRS, FERS annuities are funded by
contributions from employees and the government, but (unlike
CSRS) FERS benefits must be pre-funded according to their full
actuarial costs. FERS annuitants over age 62 receive annual cost-of-
living adjustments, but those adjustments may be less than the
amount of inflation.17
! The TSP is patterned after the “401(k)” savings plans available in
the private sector, and encourages employees to save for retirement
by making contributions “pre-tax” and by making interest earned on
these contributions non-taxable until they are withdrawn. The
government contributes 1% of pay for all FERS participants, and
matches up to 5% of pay contributed by FERS employees. The
maximum employee contribution in 2004 is 14% of pay (up to
$13,000).18
In contrast to the approach taken with regard to CSRS employees in 1969,
Congress did not authorize FERS employees to receive service credit for unused sick
leave (except for leave carried into the system by employees who transferred to
FERS from CSRS).19 The legislative history for the 1986 act creating FERS does
not explain why Congress took this approach. However, in the conference report for
the act, the conferees noted that FERS employees’ unused sick leave generally could
not be used in the computation of their annuities, and urged OPM to examine sick
leave usage by FERS employees. The conferees went on to say that they were
“concerned that without an incentive to save sick leave, the use of sick leave may
substantially increase.”20 OPM representatives told CRS during this review that their
office had not conducted the study that the congressional conferees urged the agency
to undertake because the CPDF does not contain data that would allow comparison
16 FERS employees who have at least 20 years of service and who work until at least age
62 earn 1.1% for each year of service. Therefore, an employee who retires at age 62 with
30 years of service will accrue a pension benefit equal to 33% of his or her “high-three”
average pay.
17 For example, if the amount of inflation is more than 3%, the annuitant would receive an
adjustment equal to the amount of inflation minus 1 percentage point.
18 CSRS employees can also contribute to the TSP, but their contributions are capped at 9%
and they receive no government matching contribution.
19 Retiring employees who transferred to FERS receive service credit for the amount of
unused sick leave they had at the time of transfer or the time of retirement, whichever is less.
20 Committee on Post Office and Civil Service, U.S. House of Representatives, Committee
Print 99-8, 99th Congress Second Session June 12, 1986, p. 127.
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of sick leave usage rates or sick leave balances by employees in different retirement
plans.21
Indications of Greater Sick Leave Use
by FERS Employees
There have been some indications that FERS employees may be using sick leave
more often than their CSRS counterparts, particularly as they approach retirement.
As noted previously, average sick-leave usage rates for all federal employees
increased by more than 10% from 1994 to 2001 (rising from 8.59 days per year in
1994 to 9.52 days per year in 2001). One possible explanation for this increase in the
use of sick leave is the additional uses for sick leave that were allowed during that
period (e.g., to care for sick family members or to adopt a child). However, another
explanation could be the increasing numbers of FERS employees and the fact that
they receive no benefit for accrued sick leave at retirement. The percentage of
federal civilian employees in FERS increased from 48% in 1994 to more than 63%
in 2001.
Also, a May 2004 survey suggested that FERS employees may be more likely
to use sick leave in the future than their CSRS counterparts. FPMI Solutions, Inc.,
a human resources services, staffing, and training company primarily for federal
agencies, conducted an unscientific online poll of its subscribers (current and retired
federal employees) regarding sick leave usage. Of the more than 2,300 participants
in the poll, 51% said they were under CSRS and 49% said they were under FERS.
Although both groups of participants said they were strongly in favor of sick leave
conservation, the groups diverged regarding sick leave use in the last year before
retirement. Whereas nearly 85% of CSRS employees and retirees said they would
or did conserve as much sick leave as possible, more than 75% of FERS employees
and retirees said they planned to use as much sick leave as possible during their last
year before retirement. One respondent said that there is “a huge incentive for CSRS
and offset employees to conserve sick leave and a very large disincentive for FERS
employees to do the same.”22 Another respondent said that this incentive structure
causes “a lot of productivity to go down the drain.” Other respondents said that, this
incentive structure notwithstanding, the use of sick leave when not sick was morally
“the wrong thing to do.”
21 Telephone discussions with the Confidential Assistant to the Director and Chief,
Administration, Office of Congressional Relations, OPM, May-June 2004.
22 CSRS “offset” retirement generally applies to employees who had a break in service that
exceeded one year and ended after 1983, and had five years of creditable civilian service on
January 1, 1987. When these employees become eligible for Social Security benefits, their
annuities will be offset by the value of the Social Security Benefit earned during CSRS
offset service.
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FERS Employees Appear to Use More Sick Leave
Than Their CSRS Counterparts
Although the CPDF does not contain data on sick leave usage rates by
employees in different retirement systems, those data are available from each federal
agency or, more centrally, through organizations that administer payroll functions for
multiple federal agencies. For example, the Defense Finance and Accounting Service
(DFAS) administers payroll functions for nearly 700,000 civilian employees in the
Department of Defense and the Executive Office of the President.
We requested data from DFAS on sick leave usage rates and sick leave balances
for employees and retirees in the agencies they service. We focused on full-time,
permanent employees in General Schedule (GS) and Wage Grade (WG) (or
equivalent) pay systems, which included more than 500,000 employees in CSRS and
FERS — about one-third of the full-time permanent workforce outside of the Postal
Service, intelligence agencies, and law enforcement.23 Our data request was
essentially in two parts. First, for employees who did not retire during the one-year
period from June 1, 2003, through May 29, 2004, we requested the average number
of sick leave days used during that period and average sick leave balances as of the
end of that period for the following categories:
! employees in CSRS and (separately) employees in FERS who were
“eligible to retire” without penalty as of June 1, 2003 (i.e., at least 55
years of age and with at least 30 years of service, or at least 60 years
of age and 20 years of service, or 62 years of age and 10 years of
service).
! employees in CSRS and (separately) employees in FERS who were
eligible to retire and “almost eligible to retire” (defined as being
within two years of retirement eligibility in terms of any
combination of age or service — e.g., an employee who is 53 with
30 years of service or 55 with 28 years of service, or an employee
who is 58 with 20 years of service or 60 with 18 years of service).
! employees in CSRS and (separately) employees in FERS who were
eligible to retire and “nearing eligibility to retire” (defined as being
within five years of retirement eligiblility in terms of any
combination of age or service — e.g., an employee who is 50 with
30 years of service or 55 with 25 years of service, or an employee
who is 55 with 20 years of service or 60 with 15 years of service).
Second, for employees who did retire during the June 1, 2003, through May 29, 2004,
period, we asked for the average number of sick leave days used per pay period when
they were working and their average sick leave balance as of their date of retirement.
23 The GS and WG pay systems are the major white-collar and blue-collar pay systems,
respectively, in the federal government.
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Differences in Sick Leave Usage and Balances
The Defense Manpower Data Center acted as DFAS’s agent to generate the sick
leave information that we requested.24 As Table 1 shows, the data indicated that
FERS employees in the agencies that DFAS supports who were eligible to retire or
approaching eligibility generally used more sick leave than their CSRS counterparts
during the one-year period ending May 29, 2004. The differences between the two
groups were greatest for GS employees as they approached or achieved retirement
eligibility. For example, whereas FERS employees in the GS pay system who were
either eligible to retire or were within five years of retirement eligibility used only
slightly more sick leave during the year than comparable CSRS employees (89 hours
versus 85 hours, respectively), FERS employees who were eligible to retire or within
two years of eligibility used 25% more sick leave than their CSRS counterparts (105
hours versus 84 hours, respectively). FERS employees who were eligible to retire
used nearly 35% more sick leave than comparable CSRS employees (119 hours
versus 89 hours, respectively). FERS employees in the WG pay system who were
eligible to retire or were within two years of eligibility also used somewhat more sick
leave than their CSRS counterparts (e.g., 139 hours versus 127 hours in the “eligible
to retire” category), but the differences between FERS and CSRS employees were not
as significant as in the GS pay system.25
Table 1. FERS Employees Used More Sick Leave Than
CSRS Employees As They Approached Retirement Eligibility
Status as of May 2004
Average Hours of Sick Leave Used in Previous Year
GS/Equivalent
WG/Equivalent
Employees in
Employees in
CSRS
FERS
CSRS
FERS
Eligible to retire
89
119
127
139
Eligible or within two
84
105
114
119
years of retirement
eligibility
Eligible or within five
85
89
110
102
years of retirement
eligibility
Source: DFAS.
24 According to its website ([http://www.dmdc.osd.mil/about.html]), the Defense Manpower
Data Center supports the information requirements of the Office of the Under Secretary of
Defense for Personnel & Readiness and other members of the Department’s manpower,
personnel, and training communities.
25 The number of WG employees in each of these categories was also significantly smaller
than the number of GS employees. For example, there were more than 33,000 CSRS
employees in the GS system who were eligible to retire, compared to about 5,500 WG
employees in that category.
CRS-11
Differences between CSRS and FERS employees were even more pronounced
when considering their average sick leave balances as of May 2004. As Table 2
shows, FERS employees’ sick leave balances in all three retirement eligibility
categories were only about half as large as their CSRS counterparts (and in some
cases were less than half as large). The differences between FERS and CSRS
employees were about the same in both the GS and WG pay systems.
Table 2. FERS Employees Had Lower Sick Leave Balances
Than CSRS Employees
Status as of May 2004
Average Sick Leave Balance (in Hours) as of May
2004
GS/Equivalent
WG/Equivalent
Employees
Employees
CSRS
FERS
CSRS
FERS
Eligible to retire
1,364
715
804
438
Eligible or within two
1,222
540
761
323
years of retirement
eligibility
Eligible or within five
934
463
604
331
years of retirement
eligibility
Source: DFAS.
As Table 3 shows, for employees who retired from June 2003 through May
2004, FERS retirees’ sick leave balances at the time of retirement were significantly
smaller than the sick leave balances of CSRS retirees. CSRS retirees (particularly
within the GS pay system) also had lower average days of sick leave used per pay
period prior to their retirement than their FERS counterparts.
Table 3. FERS Retirees Had Lower Sick Leave Balances
Than CSRS Retirees
GS/Equivalent Retirees
WG/Equivalent Retirees
CSRS
FERS
CSRS
FERS
Sick Leave
1,029
313
537
119
Balance (in Hours)
at Retirement
Average Hours of
7.4
9.9
10.4
10.6
Sick Leave Used
Per Pay Period
Before Retirement
Source: DFAS.
CRS-12
Some (and perhaps most) of the differences in leave balances between
employees in CSRS and FERS may be due to differences in length of service rather
than their retirement systems. For example, the DFAS data indicated that CSRS
employees who were eligible to retire had an average of nearly 34 years of service,
compared with nearly 24 years of service for FERS employees. Similarly, CSRS
employees who retired averaged nearly 32 years of service, compared with nearly 24
years of service for employees in FERS. However, differences in longevity between
these groups do not explain why FERS employees’ use of sick leave and FERS
retirees’ use of sick leave just before retirement was greater than their CSRS
counterparts.
Sick Leave Policies in Other Organizations
According to the Bureau of Labor Statistics (BLS), 56% of full-time employees
in medium and large private establishments in 1997 received paid sick leave — down
from 69% in 1988.26 That figure rose to 73% for employees in professional,
technical, and related occupations as well as clerical and sales occupations, but fell
to 38% for blue-collar and service employees.27 Most of these employers’ sick leave
plans specified a fixed number of sick days allowable per year (known as “annual”
plans), but a few (in what are known as “as needed” plans) did not place a limit on
the number of days that can be used. Where a fixed number of days was specified,
most plans provided the same sick leave benefits for all employees, but some allowed
benefits to increase with seniority. Most of the sick leave plans that allowed
employees to accumulate unused sick leave placed a cap on the amount of leave that
could be carried over from year to year. Other studies have indicated that the absence
of sick leave can have a wide range of negative effects on family members and
coworkers.28
The BLS data indicated that 53% of full-time employees with paid sick leave
in medium and large private establishments in 1997 were allowed to carry over
unused sick leave from year to year.29 Seventeen percent were allowed to obtain cash
in exchange for unused sick days. Where a cash-in provision was provided, roughly
half (9%) also had a provision in their plan allowing leave to be carried over from
year to year. For 36% of employees, neither carrying over nor cashing in of unused
sick leave was allowed; any leave not used in the year it was earned was forfeited.
26 U.S. Department of Labor, Bureau of Labor Statistics, Employee Benefits in Medium and
Large Private Establishments, 1997, Bulletin 2517 (Sept. 1999).
27 Citing the lack of sick leave provided by many employers, legislation was introduced in
the 108th Congress (H.R. 4575 and S. 2520) to require employers with at least 15 employees
to give full-time workers seven days of paid sick leave per year.
28 Institute for Women’s Policy Research, No Time to Be Sick: Why Everyone Suffers When
Workers Don’t Have Paid Sick Leave, Washington, D.C., June 2004.
29 Of the employees who were allowed to carry over unused leave, nearly 80% faced some
type of limit on the amount of leave that could be carried over, with the precise amount
varying from fewer than 10 days to more than 130 days.
CRS-13
BLS indicated that almost all (96%) full-time employees in state and local
government were provided sick leave in 1997.30 Virtually all (99%) of these
employees received a fixed number of days per year, with the exact amount ranging
from 12 days to 15 days. State and local employees with sick leave were much more
likely than their private sector counterparts to be able to carry over unused sick leave
from year to year (94% versus 53% in medium and large private sector
establishments), with about 12% of state and local employees able to both carry over
sick leave and receive cash payments (compared to 9% in medium-to-large private
sector firms). Only 3% of state and local employees forfeited any unused sick leave
at the end of the leave year (compared to 36% in the private sector).
Unused Sick Leave. The BLS data did not include specific information on
how unused sick leave was treated at retirement in either the public or private sectors.
However, some surveys of public sector organizations’ personnel policies did contain
that information. For example, according to a 2002 survey of 428 agency members
of the International Personnel Management Association, 58% of the agencies cashed
out sick leave at retirement, 45% offered cash for unused sick leave, 11% converted
sick leave to vacation time, 9% converted sick leave to insurance at retirement, and
3% converted sick leave to disability insurance.31 In some cases, though, the
agencies limited the amount of sick leave that employees could carry over from year
to year or limited the amount payable at retirement.32
Federal regulations sometimes provide compensation for unused sick leave at
retirement for non-federal employees. For example, employees in federal Fishery
Management Councils may accumulate unused sick leave without limit (with Council
approval), and “distributions of accumulated funds for unused sick leave may be
made to employees upon his or her retirement, or to his or her estate upon his or her
death, as established by the Council.”33 Police officers, firefighters, and teachers in
the District of Columbia who retire on an immediate annuity receive service credit
for unused sick leave.34
30 U.S. Department of Labor, Bureau of Labor Statistics, Employee Benefits in State and
Local Governments, 1998, Bulletin 2531 (Dec. 2000).
31 Reported in “Sick Leave Abuse: A Chronic Workplace Ill?,” Public Management, 84
(June 1, 2002), p. 32.
32 Surveys conducted by other organizations confirm these findings. For example, a 1995
survey of more than 2,600 cities and nearly 900 counties conducted by the International
City-County Management Association indicated that nearly half of the local governments
(49.6%) paid employees for unused sick leave, and 13.3% permitted conversion of sick
leave to vacation leave. See E.R. Moulder and G. Hall, Employee Benefits in Local
Government, Special Data Issue (Washington, D.C: International City and County
Management Association, 1995), reported by Soonhee Kim, “Administering Family Leave
Benefits and New Challenges for Public Personnel Management: The New York State
Experience,” Review of Public Personnel Administration, 18 (Summer 1998), pp. 42-57.
33 50 CFR 600.120(d). Fishery Management Councils were created by the Magnuson-
Stevens Fishery Conservation and Management Act to manage living marine resources up
to 200 miles offshore.
34 Department of the Treasury, “Federal Benefit Payments Under Certain District of
(continued...)
CRS-14
Sick Leave Policies in State Governments
In one of the most comprehensive assessments of employee benefits in state
governments, Workplace Economics, Inc., reported that as of January 1, 2004, most
states provided their employees with a fixed number of sick days per year (most
commonly between 12 and 15 days), but in several states the amount of sick leave
accrual was tied to years of service, date of hire, or both. For example, in Hawaii,
state employees hired before July 2, 2001, accrue 21 days of sick leave per year, but
employees hired after that date accrue 15 days per year for the first nine years of
employment and 21 days per year thereafter. Most states placed no limit on the
amount of sick leave that could be accumulated; those that did (nine states) most
often limited accumulated leave to between 90 and 150 days.
The study also indicated that 45 states provided some form of compensation for
unused sick leave at retirement.35 These states’ compensation plans generally fell
into three categories:
! states that provided employees with a cash payment for some portion
of their unused sick leave,
! states that provided service credit for the leave in the computation of
retirement annuity, or
! states that used the unused sick leave to fund some type of health or
life insurance for retirees.
The type and amount of compensation provided varied substantially within these
three categories, and in some cases the states provided employees with options across
the categories (e.g., allowing employees to choose either service credit for annuities
or health insurance payments), or provided more than one form of compensation. For
example, in Nevada, employees were paid for unused sick leave over 30 days to a
maximum of $8,000. In addition, Nevada state employees could receive
compensation for 50% of the hours in a special sick leave account as either a lump
sum payment, advanced payment of an insurance premium, or to purchase additional
service credit.36
Cash Payment Plans. In 28 states, retirees were provided a cash payment
for a portion of their unused sick leave. In each of these states, the size of the
payment was limited in some way — for example, paying employees for a percentage
34 (...continued)
Columbia Retirement Plans,” 65 Federal Register 77500, 77503, Dec. 12, 2000.
35 The five states that generally provided no compensation for unused sick leave were
Alaska, Indiana, Maine, Oregon, and Vermont. In Vermont, though, a limited number of
employees are covered by a retirement plan in which 50% of unused sick leave is added to
an employee’s average final compensation.
36 After accruing 90 days of sick leave, Nevada state employees could carry over 50% of
unused sick leave each year in a special account to be used for long-term illnesses.
CRS-15
of their final sick leave balance (most commonly 25% or 50%), capping the number
of days or hours of sick leave payable or the size of the payment itself, or calculating
the size of the payment based on a formula. In many cases, the states used a
combination of these or other factors in determining the amount payable. For
example:
! In Virginia, state employees were paid for 25% of their unused sick
leave, with the amount of the payment capped at $5,000.
! In New Hampshire, employees were paid for 33% of their unused
sick leave, up to 40 days.
! Arkansas used a combination of a formula and a cap on the size of
the payment: employees with less than 50 days of unused sick leave
on the date at retirement received no payment, employees with 50 to
59 days were paid for 50% of their sick days at 50% of their salary,
with the scale gradually rising to where employees with 80 to 120
days of unused sick leave received payment for 80% of their sick
days at 80% of their salary. The maximum payment for unused sick
leave was $7,500.
In some states, other limits were placed on whether and, if so, how much
compensation would be provided to their employees for unused sick leave. For
example, in Illinois, unused sick leave earned by state employees from January 1,
1984, through December 31, 1997, was paid at 50% of its value at separation. In
Michigan, only retiring employees hired before October 1, 1980, were compensated;
they received payment for 50% of their unused sick leave based on their last rate of
pay.
Service Credit Plans. In 14 states, employees received service credit for
unused sick leave in computing retirement benefits (as is currently done for CSRS
employees in the federal government), but several states placed conditions or limits
on the use of sick leave in this manner. For example, in Georgia, unused sick leave
could be used to compute retirement benefits only if the combined balance of sick
and annual leave at retirement totaled 120 hours. In Oklahoma, a maximum of one
year service credit was allowed, but any credited service of six months or more was
rounded up to a full year. In South Carolina, employees could convert up to 90 days
of sick leave to retirement service credits, thereby adding up to 4.5 months of service
time in calculating the size of their annuity.
Insurance Plans. In seven states, the value of some portion of unused sick
leave could be credited toward retiree health or life insurance premiums. For
example, in Utah, retirees could use unused sick leave to purchase health insurance,
with eight hours of sick leave equal to one month of individual coverage. As in the
previous categories of compensation, states often placed limits on the use of sick
leave in this manner. For example, in Idaho, half of the monetary value of unused
sick leave earned since July 1, 1976, or 600 hours (whichever is smaller), could be
used to pay the retiree’s premiums for group health programs.
CRS-16
Policy Options
When Congress established FERS in 1986, it urged OPM to examine sick leave
usage by FERS employees. The data presented in this report indicate that FERS
employees (at least those serviced by DFAS) are using more sick leave than their
CSRS counterparts, particularly as they approach retirement. Although higher sick
leave balances for CSRS retirees, retirement eligibles, and near eligibles may be
partially a function of longevity, the differences in average usage rates between
employees in the two retirement systems lends credence to a longstanding hypothesis
— that FERS employees, who get no value for their unused sick leave, will use that
leave rather than simply forfeiting it back to the government at retirement.
More Stringent Enforcement of Sick Leave Policies
As noted previously, federal agencies may grant sick leave only when supported
by evidence that they consider administratively acceptable (e.g., a medical
certificate). Therefore, if policy makers decide to address this issue, one approach
to the apparent greater use of sick leave by FERS employees as they approach
retirement would be to enforce existing regulations more stringently — requiring
some type of evidence to support the use of sick leave for more than a certain number
of days within a particular period of time. The advantage of this approach is that it
could reduce sick leave productivity losses without incurring other costs. However,
the success of this approach in encouraging the use of sick leave only when needed
would depend on how rigorously it was implemented by the agencies. Also, if
employees are able to produce the required documentation easily (e.g., convincing
their doctors to provide some evidence of medical treatment or condition), its success
in reducing sick leave use may be limited.
Providing an Incentive to Conserve Sick Leave
Another general approach would be to provide FERS employees an incentive
to conserve their sick leave. The previous discussion about state sick leave policies
suggests that several options are available within this approach. One such option
would be to allow FERS employees to use unused sick leave in the computation of
their annuity. The experience of GS employees when they were offered service credit
suggests that doing so would have the desired effect. However, FERS annuities are
generally much smaller than their CSRS counterparts (because they are only one part
of the FERS retirement package), and each additional year of service has less value
in FERS than in CSRS (1% instead of 2%). Also, this alternative could prove to be
more expensive than other options over the long term, as larger annuities are payable
for as long as the retiree receives a pension.
Another option would be to provide employees with a cash payment for their
unused sick leave. The experience of the states suggests that this payment be limited
in some way — for example, paying employees for 25% or 50% of their final sick
leave balance, capping the number of days or hours of sick leave payable or the size
of the payment itself, or calculating the size of the payment based on a formula.
From the employees’ standpoint, cash payments are likely to have the added appeal
of immediacy when compared to the annuity-based incentive, allowing employees
CRS-17
to see a more immediate benefit to reserving their sick leave. Formula-based systems
are more complicated, but can have the advantage of building in additional incentives
to save sick leave. For example, a system that pays for 50% of sick leave over a
certain level (e.g., 500 hours) avoids de minimus payments while encouraging
employees to maintain a roughly three-month cushion of sick leave for longer-term
disabilities. Many other formula-based or graduated cash payment systems could
also be devised.
Finally, the experiences of the states suggest that federal policymakers could
permit the use of unused sick leave to help pay for health, life, or other insurance in
retirement. Again, the amount of the payment could be capped either in terms of the
proportion of sick leave convertible to this purpose or by a fixed dollar amount. This
option was least common in state governments, and may have the least appeal to
retiring employees (who could use a cash payment to pay for insurance or any other
purpose).
A Comparison of Costs
Any of these options to provide value for unused sick leave would likely be
viewed by retiring FERS employees as advantageous compared to the current policy
of providing no value for unused sick leave. Should Congress decide to adopt one
of these approaches, the Federal Employees’ Retirement System Act requires that
FERS benefits be pre-funded according to their full actuarial costs. Therefore, some
increase would likely be needed in the employees’ contribution to FERS, the federal
government’s contribution, or both. Even considering the additional contribution,
though, a change in policy of this type could provide a net benefit to the government,
given the costs associated with current rate of sick leave use by FERS employees.
For example, the data we obtained from DFAS indicated that, on average, FERS
employees who were eligible to retire used about 30 more hours of sick leave in the
one-year period ending May 29, 2004, than their CSRS counterparts. FERS
employees who were eligible to retire as of that date were paid an average of nearly
$60,000 per year, or nearly $30 per hour. Therefore, the nearly 30 additional hours
of sick leave used by FERS eligibles cost the federal government about $900 per
employee in that year (30 hours times $30/hour) in lost productivity.37 CPDF data
indicate that there were about 42,000 FERS eligibles as of October 2003. Therefore,
assuming the DFAS data can be extrapolated to the rest of the government, the total
lost-productivity cost in that year of the additional sick leave for all FERS eligibles
was nearly $38 million ($900 times 42,000 employees). Including sick leave costs
for employees who were within two years of eligibility (21 hours of additional sick
leave at $30 per hour times about 35,000 FERS employees within two years of
retirement) adds another $22 million in estimated lost productivity costs for that year.
Taken together, then, the additional hours of sick leave used by FERS employees
who were eligible or nearly eligible to retire cost the federal government nearly $60
million in lost productivity from June 2003 through May 2004. If agencies are hiring
37 These costs are presented as productivity losses because agencies pay their employees the
same amount whether they are on sick leave or in regular duty status.
CRS-18
additional workers to make up for these productivity losses, the overall cost of the
current policy regarding FERS employees would be even higher.
The cost of providing FERS employees with some value for unused sick leave
could be substantially less than these costs, thereby yielding a net saving to the
government, even if the full cost of this additional value was paid by the government.
For example, FERS employees could be paid for a percentage of sick leave over a
certain threshold (e.g., 25% of unused sick leave hours over 1,000 hours). Doing so
could both encourage employees to have at least six months of sick leave available
for longer-term illnesses and give them an incentive to conserve sick leave beyond
that level. In such a system, a FERS employee with a sick leave balance equivalent
to that of the average CSRS employee who is eligible to retire (1,364 hours) would
receive a cash payment for 91 hours of sick leave (25% of 364 hours) at $30 per hour,
or $2,730 before taxes.
Even if 10,000 FERS employees retired each year, the cost of this payment
(about $27 million) would still be less than the estimated costs associated with the
current system that appears to encourage sick leave use (nearly $60 million).38
Furthermore, this incentive would be a one-time payment for unused sick leave; in
contrast, costs associated with additional sick leave use by FERS employees occur
year after year. One possible disadvantage of this particular approach is that
employees with sick leave balances of less than 1,000 hours would still receive no
credit, thereby continuing the current disincentive to use sick leave prudently. Also,
in the above example, some may consider a cash payment of less than $3,000 to be
a poor trade-off for nearly eight months of sick leave (with a lost-productivity value
of as much as $80,000).
Therefore, an almost infinite variety of other options could be considered to
have the desired effect within budget constraints. Each approach appears to have
certain advantages and disadvantages. For example, FERS employees could be
provided a cash payment for a percentage of their total sick leave balance, perhaps
with a cap in the total payment — for example, 25% of sick leave, to a maximum of
400 hours. In this scenario, if an employee with an “high three” average salary of
$30 per hour had a sick leave balance of 1,361 hours, he or she would receive a cash
payment of $3,000 ($30 per hour times 400 hours times 0.25). Although this
approach could provide certain employees with the desired incentive to conserve sick
leave, employees with sizable sick leave balances (i.e., more than 400 hours) would
still be encouraged to reduce that balance to the maximum number of payable hours,
which could defeat the purpose of the change in policy.
A threshold question for Congress, however, is whether any change is needed
in the current policy regarding FERS employees’ unused sick leave. It could direct
OPM to undertake a comprehensive study of the issue or take other steps short of
initiating a new policy.
38 The cost of this one-time payment of $2,700 for FERS employees would also be
substantially less than the benefits currently payable to CSRS employees retiring with a sick
leave balance of 1,364 hours. At a “high-three average” of $60,000 per year, that balance
would add about $700 per year to the employee’s annuity, making the total payout over a
20-year retirement about $14,000.
CRS-19
Appendix A: State Sick Leave Policies
The following information on sick leave policies in state government are drawn
from the 2004 State Employee Benefits Survey, published by Workplace Economics,
Inc. The data are as of January 1, 2004. Where more than one accrual rate or
maximum accumulation is listed, the rate depends on length of service or other
factors. An asterisk (*) indicates that there are additional or qualifying details in the
survey. For example, in Colorado, employees are generally limited to 45 days
maximum leave accumulation, but employees hired before July 1, 1988, are limited
to their accrual as of that date plus 45 days.
Table 4. Sick Leave Policies in State Governments
State Annual
Maximum
Payment for Unused Sick
Accrual
Accumulation
Leave at Retirement
Rate
Alabama
13 days
150 days
Cash payment for 50% of leave
balance.
Alaska
15 days
No limit
None.
Arizona
12 days
No limit
Retiree may select cash payment
or deposit funds into fund to pay
future health premiums as
follows: 25% of hourly rate for
500 to 749 hours; 33% of hourly
rate for 750 to 999 hours; 50%
hourly rate for 1,000 to 1,500
hours.
Arkansas
12 days
120 days
Cash payment, to a maximum of
$7,500, as follows: less than 50
days, no payment; 50-59 days,
50% of days at 50% of salary;
60-69 days, 60% of days at 60%
of salary; 70-79 days, 70% of
days at 70% of salary; 80-120
days, 80% of days at 80% of
salary.
California
12 days
No limit
Service credit used to determine
retirement benefits.
Colorado
80 hours
45 days*
Cash payment for 25% of leave
balance.
Connecticut
15 days
No limit
Cash payment for 25% of leave
balance, not to exceed 60 days’
pay.
Delaware
15 days
No limit
Cash payment for 50% of leave
balance, up to 90 days.
CRS-20
State Annual
Maximum
Payment for Unused Sick
Accrual
Accumulation
Leave at Retirement
Rate
Florida
13 days
No limit
Cash payment for 25% of leave
balance.
Georgia
15 days
90 days
Service credit used to determine
retirement benefits, but only if
120 days of combined unused
sick leave and forfeited sick and
annual leave.
Hawaii
15 days/
No limit
Service credit used to determine
21 days*
retirement benefits.
Idaho
12 days
No limit
Value of 50% of sick leave used
to pay retiree’s premiums for
group health insurance.
Illinois
12 days
No limit
Cash payment for 50% of sick
leave, but only if earned from
1/1/84 through 12/31/97.
Indiana
9 days
No limit
None.
Iowa
18 days
No limit
Cash payment to maximum of
$2,000.
Kansas
12 days
No limit
Cash payment as follows: 8
years of service and 100 days
accumulated, 30 days pay; 15
years and 125 days, 45 days pay;
25 years and 150 days, 60 days
pay.
Kentucky
12 days/
No limit
Service credit used to determine
22 days/
retirement benefits.
32 days
Louisiana
No limit
Partial payment based on
actuarial calculation.
Maine
12 days
120 days
None.
Maryland
15 days
No limit
Service credit used to determine
retirement benefits.
Massachusetts
15 days
No limit
Cash payment for 20% of sick
leave.
Michigan
13 days
No limit
Cash payment for 50% of sick
leave, but only if hired before
10/1/80.
CRS-21
State Annual
Maximum
Payment for Unused Sick
Accrual
Accumulation
Leave at Retirement
Rate
Minnesota
13 days
No limit
Cash payment for 40%of sick
leave, but only for mandatory
retirement or employees with 10
years of service or age 65 or
older.
Mississippi
12 days/
No limit
Service credit used to determine
10.5 days/
retirement benefits.
7.5 days
Missouri
15 days
No limit
Service credit used to determine
retirement benefits (with every
168 hours credited as one
additional month of service).
Montana
12 days
No limit
Cash payment for 25%of sick
leave.
Nebraska
12days/
No limit
Cash payment for 25%of sick
14 days/
leave.
18 days
Nevada
15 days
No limit*
Cash payment for excess over
30 days to a maximum of
$8,000. Also, any leave in
special leave account may be
taken as cash payment,
insurance payment, or to
purchase service credit.
New Hampshire
15 days
90 days/ 105
Cash payment for 33% of sick
days/ 120 days
leave, up to 40 days.
New Jersey
15 days
No limit
Cash payment for 50%of sick
leave, up to $15,000.
New Mexico
12 days
No limit
Cash payment for up to 400
hours of sick leave if hours
previously cashed in on annual
basis exceeds 600 hours.
New York
8 days/
200 days/ 1,500
Up to 165 days may be used as
10 days/
days
service credit to determine
13 days
retirement benefits, and up to
200 days may be used to pay for
health insurance during
retirement.
North Carolina
12 days
No limit
Service credit used to determine
retirement benefits.
CRS-22
State Annual
Maximum
Payment for Unused Sick
Accrual
Accumulation
Leave at Retirement
Rate
North Dakota
12 days
No limit
Cash payment for 10% of sick
leave after 10 continuous years
of service.
Ohio
10 days
No limit
Cash payment for 50% of sick
leave.
Oklahoma
15 days
No limit
Service credit used to determine
retirement benefits. A
maximum of one year credit is
allowed, with six months or
more rounded up to one year.
Oregon
12 days
No limit
None.
Pennsylvania
13 days
300 days
Cash payment for up to 163
days of sick leave, paid under
certain full retirement situations.
Rhode Island
104 hours
125 days
Cash payment for 40-hour
employees as follows: 50% of
total from 468 hours to 720
hours; 75% of total from 721
hours to 1,000 hours. For 35-
hour or non-standard employees,
50% of total from 390 hours to
630 hours; 75% of total for 631
hours to 875 hours
South Carolina
15 days
195 days
Service credit used to determine
retirement benefits. A
maximum of 90 days (4.5
months service time) credit is
allowed.
South Dakota
14 days
No limit
Cash payment for 25% of sick
leave (for those with 7 years of
service) to a maximum of 480
hours.
Tennessee
12 days
No limit
Service credit used to determine
retirement benefits, with one
month of service credit for every
20 days of sick leave.
Texas
12 days
No limit
Service credit used to determine
retirement benefits, with one
month of service credit for every
160 hours (or fraction thereof)
of sick leave.
CRS-23
State Annual
Maximum
Payment for Unused Sick
Accrual
Accumulation
Leave at Retirement
Rate
Utah
13 days
No limit
Retiree may use 25% of sick
leave to purchase health
insurance (eight hours sick leave
buys one month of individual
coverage)
Vermont
6 days/
No limit
Generally none, although a
12 days/
limited number of employees
18 days/
are covered by a contributory
21 days
retirement plan in which 50% of
unused sick leave is added to
their average final
compensation.
Virginia
8 days/
No limit
Cash payment for 25% of sick
10 days/
leave (for those with 5 years of
15 days
service) to a maximum of
$5,000.
Washington
12 days
No limit
Cash payment for sick leave
hours over 480 hours at 25% of
current salary.
West Virginia
18 days
No limit
Service credit used to determine
retirement benefits or converted
to credit for health insurance.
Wisconsin
16.25
No limit
Sick leave converted to credits
days
to pay group health insurance.
Wyoming
12 days
No limit
Cash payment for 50% of sick
leave, to a maximum of 480
hours.