Now I'm not going to condemn someone for saving some vacation days. I've been paid for unused vacation time from every job I've left. What is concerning is the degree to which some individuals are doing to save their vacation time.
Just some high level facts from the article.
The state owes $3.5 billion for unused vacation time. Annual payouts have increased from $167 million in 2008 to $299 million in 2018. The article seems to hint at two possible reasons why there is this dramatic payout increase. First, Baby Boomers are retiring. Second, the state is starting to offer payouts of up to 80 hours per year.
Per the article, here are the rules in place and the fact that they aren't being followed:
California mandates that vacation balances for most employees be capped at 640 hours. Sporadic enforcement of the rule, coupled with an increasing number of state workers retiring, has led to a 60% rise in the number of six-figure payouts since 2012, when 280 employees each cashed in unused paid leave totaling $100,000 or more, The Times’ analysis found.
The article mentions that the majority of payouts are less than $5,000. That's not a big deal, I'd say, for someone who has spent their entire life working for the state. Let's say someone makes $80,000 a year by the time they retire. Walking away with $5,000 in payouts is around 3 weeks of vacation. That doesn't seem outrageous to me.
What sounds like abuse; however, is that the article mentions that of the 20,400 workers that got paid for unused vacation in 2018, 450 walked away with 6 figure payouts. This figure is around 2%.
This 20,400 excludes workers who just take the vacation days until they run out and then retire:
The total unfunded liability also does not account for employees who used stockpiled days off at the end of their careers to remain employed while not actually working, boosting the value of their pensions.
One of the egregious payouts was given to a transportation engineer. His payout was $405,119 or 4,400 hours for. This 4,400 compares to the 640 hours that California employees technically can't exceed. It mentions that he retired after 36 years.
I decided to do a little math.
Per California's website, employees have the option to accrual time either as vacation or annual leave (annual leave sounds similar to PTO where you can use it as either vacation or sick leave). Like Corporate America, the longer you work, the more vacation days you can accrual. Also, managers get more vacation days than others.
If he took the vacation rate, here's what I'm thinking his total hours of vacation added up to:
First 3 years at 7 hours of vacation a month: 252 hours
Up to 10 years at 10 hours of vacation a month: 840 hours.
Up to 15 years at12 hours: 720 hours.
Assume he made manager after this:
Up to 20 years at 14 hours: 840 hours
Up to 25 years at 15 hours: 900 hours
Up to 36 years at 16 hours: 2,112
Add that all together you get to 5,664 hours of accrued vacation. Of which, he only would have taken 1,264 hours of vacation or an average of less than 5 days a year for 36 years.
If he took an annual leave (and assuming you can get paid out for the full amount), the hours accrued per month are higher. Those hours start at 11 for up to 3 years, 14 for 10 years, 16 for 15 years. Once again assuming he made manager after that we go to 18 hours at 20 years, 19 hours at 25 years and then 20 hours there after.
All that would add up to 7,392 hours over 36 years. That would mean he took only 2,992 days of vacation and sick leave over 36 years or an average of just over 2 weeks a year.
Perhaps the 2 weeks of vacation a year sounds reasonable (annual leave option), but taking less than 5 days a year (vacation option) doesn't.
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