Sick Leave Banks

These allow employees to “give” unused sick leave to co-workers who need it. Here’s what you should know about sick leave banks.

At some point, all workers get sick, and need to take a day or two of paid leave. School employees have a number of significant entitlements to sick leave that are provided by statute and that, in some cases, have also been supplemented by the parties’ locally negotiated agreement.

But there is a relatively new law that could provide even greater employee benefits in this area. It is designed for employees who have longer-term illnesses that deplete their own sick leave allotment.

Sick Leave Statutes

Longstanding state sick leave statutes provide that all regularly employed school employees must be granted a minimum of 10 sick days per year (although the parties may negotiate a greater number). These days can only be used for an employee’s own personal illness or disability.  The law also provides that an employee’s unused sick days may be accumulated for future use.  While there is no limit on the number of accumulated days that may be accrued in an employee’s “pot” of days, there is a legal restriction that no more than 15 days can be added to the accumulation in a single year.

Given these legal requirements, school employees can build up a substantial number of sick days over the course of their employment.  However, should an employee exhaust all of his or her accumulated days and need additional sick time, that individual may request that the board provide an extension of sick leave. The board has the discretion to approve or disapprove such requests on a case-by-case basis; if it approves the request, the cost of a substitute must be deducted from the extended paid leave.

New Sick Leave Bank Statute

Last year, a law was passed that authorized negotiations over the establishment of a “sick leave bank” and specified the composition of a committee to administer them.  A sick leave bank is an arrangement that allows participating employees, who have exhausted all of their sick leave, to draw paid leave from a bank of days that have been donated by other school employees.  The pool of days in the sick bank may be comprised of sick leave days or any other leave time donated by employees, as agreed upon by the parties.  Approximately eighteen percent (18%) of New Jersey collective bargaining agreements covering teachers and other school employees now include a sick leave bank provision. (Some had existing sick leave banks at the time the legislation was passed.)

It is important to emphasize that the new law did not mandate that districts adopt a sick leave bank; it clarified that school boards and employee unions were authorized to negotiate over whether to establish such a bank.  The law also specifies that no employee shall be required to participate in a sick bank.

Assuming that a board and union mutually agree to establish a sick leave bank, the law specifies that the sick bank shall be administered by a committee of six individuals:  three appointed by the board and three selected by the union.  This committee is also responsible for establishing standards and procedures for the operation of the bank. The Act gives some examples of procedures that the labor/management committee may institute: “a requirement that employees donate leave time to be eligible to draw leave time” and “limitations on the amount of sick leave time which may be drawn or the conditions under which the sick leave must be drawn.” The law specifies that, in order to draw from the sick bank, an employee must have exhausted his/her own sick leave and otherwise meet the bank’s criteria.  The law further indicates that no day of leave which is donated to the bank by an employee may be drawn by an employee unless authorized by the committee.

Unanswered Questions

 But the new law left some questions unanswered.  If a district already had a sick bank up and running prior to enactment of the new law, must the requirements of this law be incorporated into the previously established bank?  For example, is a six-person labor/management committee required to administer the pre-existing bank?  Further, is it necessary to set up different sick leave banks for separate bargaining units and for non-represented employees?  These and other questions will need to be clarified through case law.

Considerations for Boards

There are a number of factors that a board will need to consider if it is presented with a union proposal for a sick bank.

One factor will be the board’s philosophy on providing additional leaves of absence for an employee illness.  Some boards may be receptive to establishing this type of accommodation for employees who experience extended, serious or debilitating illness.  Other boards may feel that the current statutory and contractual leave entitlements are already sufficient, maybe even generous.

Boards that are willing to establish a sick bank will want to ensure that the conditions governing the bank are acceptable.  For example, the eligibility requirements; the nature of the qualifying illness; the types of days that may be donated (sick days, personal days, vacation days); the number of days that can be drawn by any given employee; the frequency by which those days can be drawn by an employee; whether there will be an appeal mechanism for employees who are denied sick bank days; exclusion of sick bank issues from binding arbitration; and so on.  Whether these conditions can be negotiated as prerequisites to the establishment of a sick bank, or whether these aspects are only subject to the mutual decision-making by the labor/management committee after the parties have agreed to the concept of a sick bank, is not clear.

Boards will also want to consider any related economic implications.  For example, if there is no sick bank, an employee may request that the board grant an extension of sick leave when he/she has exhausted all accumulated leave.  The board has the unilateral right to approve or disapprove such request; but if it grants the employee’s request, then the cost of a substitute must be deducted. The deduction of the substitute cost is intended to offset the cost of extended leave.

Conversely, under a sick bank, the cost of the substitute is not deducted from sick bank days.  By law, those days must be treated as if they were accrued sick leave time.  However, employees who donate days to the bank will experience a reduction in their own leave entitlements.  That reduction will help offset the cost of leave days granted through the sick bank.  In some circumstances, depending on the contract language, a reduction in employees’ leave days may also serve to reduce future payments for unused leave days upon retirement.

Proceed with Caution

If your board is considering a sick leave bank, it will want to maintain a healthy skepticism.  It should weigh the pros and cons, ensuring that administration of the plan is not overly burdensome or cumbersome, that appropriate controls and criteria are put into place, and taking into account the requirements of the law.  As always, boards would be well-advised to consult their labor relations and legal resources before making any commitments in this new and evolving area.