The California Human Resources Department removed caps on state employees’ leave balances Tuesday, a change that ensures workers can store up the days off they’re accruing under state pay cut agreements.
Workers normally can bank up to 640 hours, or 80 days, of vacation and other types of leave. The cap helps limit the payouts state departments sometimes have to make when state workers retire.
Gov. Gavin Newsom and the state Legislature implemented a furlough-like personal leave program in July that generally gives workers two leave days per month while cutting their pay. The program is expected to save the state $2.4 billion per year as it faces a $54 billion deficit due to the coronavirus.
The agreements allow workers to store the days and use them at their discretion, but workers accumulated vacation time at the cap wouldn’t have been able to do that. The leave agreements will give most employees 48 days worth of leave over two years.
The personal leave program, combined with other emergency leave programs in place during the pandemic, “made it difficult for some departments and employees to comply with leave-reduction plans and meet critical work demands during this ongoing state of emergency,” CalHR director Eraina Ortega said in a Tuesday email to departments.
The leave expansion will remain in place until the personal leave program ends or until July 1, 2022, whichever is sooner, Ortega said in the email.
Some California state unions negotiated higher leave caps in their pay-cut agreements. The engineers’ and scientists’ unions negotiated leave expansions that will last through June of 2025.
Ortega’s announcement follows the news last week that state worker pay cuts likely are here to stay, after an Oct. 15 deadline passed for Congress to send aid money to states that could have been used to undo state workers’ pay reductions.
The email doesn’t say how departments will address leave balances above the cap in two years. In the past, the state has loosely enforced the caps.
The value of the leave grows over time, adding to the state’s long-term liabilities.
In 2013, following five years of furloughs and personal leave programs during the Great Recession, more than 23,700 state workers’ leave balances exceeded the cap, according to a Legislative Analyst’s Office report from that year. Workers’ leave balances at the time represented about $3.9 billion in liabilities, the report said.
At the end of 2019, the average state employee had 325 hours, or about 40 days, of accrued compensable leave, according to CalHR. The figure does not include sick leave, which can’t be cashed out. The state’s most senior workers likely have many more days than that, while newer workers likely have far fewer, or none.
The Legislative Analyst’s Office cited the long-term costs when it recommended against using any additional furlough or leave programs after the current agreements expire. The state should instead consider layoffs or other ways to save, the office recommended.