On Wednesday, May 23 the Assembly State and Local Government Committee unanimously approved a measure intended to reign in the cost of paying public employees for unused sick leave upon retirement.

A-1851, co-sponsored by Assemblywoman Pamela Lampitt and Assembly Speaker Craig Coughlin, prohibits the payment by a public employer, including a board of education, of any supplemental compensation for unused sick leave that is earned, by any current or future employee, after the bill’s effective date.  Any time earned prior to that date would still be eligible for a payout as provided under current law.  If an employee has accumulated $7,500 or more in unused sick leave prior to the effective date, any additional sick leave accrued after that date would have no monetary value.

If an employee has accrued less than $7,500 worth of unused sick leave prior to the bill’s effective date, then such employee would still be eligible for cash payout upon retirement, but only up to the amount earned as of that date.  The employee would also be able to accumulate additional unused sick leave, the dollar value of which would be used to offset an employee’s post-retirement medical expenses, rather than being paid out as cash.  However, the bill limits the aggregate value of any unused sick leave earned both prior to and after the effective date to $7,500. The amount that is eligible to offset an employee’s post-retirement medical expenses, such as the individual’s share of premium costs, would be disbursed over a five-year period. If a retiree is not eligible for employer-provided health care benefits, then the dollar value of unused sick leave accrued after the bill goes into effect would be applied toward a Health Reimbursement Arrangement, which would go towards the retiree’s medical expenses.

The provisions above apply to all public employees who are represented by a union.  For employees who are not represented by a union, cash payouts for unused sick leave will not be permitted upon retirement in any amount for any time earned after the bill’s effective date.  Any time earned prior to that date will be eligible for a payout pursuant to current law.

In addition to capping sick leave payouts, A-1851 also limits the carry-forward of unused vacation leave to one successive year only for all current public employees.

In 2010, the Legislature passed and Gov. Chris Christie signed a bill (P.L.2010, c.3) that capped sick leave payouts for municipal, county and school employees at $15,000.  However, that law only applied prospectively to individuals hired after May 21, 2010 and did not impact existing employees.  Anyone hired prior to that date could continue to accrue additional unused sick leave that would be eligible for a cash payout upon retirement.

Later that same year, the Legislature sent another bill to Gov. Christie that would have capped payments at $15,000 for both current and new employees of local governments and school districts.  However, the governor conditionally vetoed that proposal and recommended the outright elimination of any payout for unused sick leave accumulated after that bill’s effective date.  The Legislature did not adopt the governor’s recommendations and the bill died.

The NJSBA supported the legislation as a potential cost-saving measure that could help districts struggling to maintain adequate educational programming and services while living within the constraints of the 2 percent property tax cap and a lack of sufficient state aid. Other representatives of public employers, including the N.J. League of Municipalities and the N.J. Association of Counties, also supported the bill.   It was opposed by representatives of various public sector unions.  The bill may now be posted for a vote by the full Assembly.

Assembly Voting Session The General Assembly convened for a voting session on Thursday, May 24.  The following education-related measures were approved:

Nepotism Policies RequiredA-557 requires the adoption of nepotism policies by school districts and charter schools. This bill would put into statute the current nepotism regulations to which school districts and charter schools must comply.  The bill also makes the positions of in-house school attorney and director of personnel subject to the nepotism policy. This bill will require boards to update their nepotism policies to conform to the language in the bill. NJSBA secured an amendment giving boards 60 days from the date of enactment to adopt their updated policies.

IEP Awareness MonthAJR-32 designates May of each year as “Individualized Education Plan (IEP) Awareness Month” in New Jersey. The purpose is to increase public understanding of the development and implementation of a special education student’s individualized education plan under the federal Individuals with Disabilities Education Act. NJSBA supports the resolution.