Wow… from MacIver.
As previously reported by MacIver News, Wisconsin allows state workers to convert their unused sick leave into health insurance payments at retirement. State workers earn 16.25 sick days a year. The typical public employee in the system uses just over eight days based on 2016 averages. The unused days carry over year-to-year and accumulate throughout the employee’s career.
Sick leave is calculated using the employee’s highest rate of pay. Similar to higher pension benefits, employees with higher value sick leave account balances tend to have a higher rate of pay, work longer and are older than the average retiree.
Every state worker is enrolled in ASLCC (Accumulated Sick Leave Conversion Credit Program). That program takes the number of unused sick hours an employee has and multiplies it by their highest basic hourly pay rate.
Upon a retiree’s death, surviving spouses and dependents are eligible to use credits from both programs. Sick leave credit conversion accounts have no cash value and do not accrue interest over time.
Employees who have worked for the state for over 15 years are also enrolled in SHICC (Supplemental Health Insurance Conversion Credit Program). This program takes the employee’s ASLCC amount and matches a certain portion of it.
But they sure do add up – to the tune of $3 billion in obligations, as MacIver News Service reported last year.
This is yet another sweetheart benefit that government employees receive at the expense of taxpayers that is virtually unheard of in the private sector. Sick leave is a benefit that allows employees to be able to take a sick day without losing pay. In virtually every other employer, sick leave is use it or lose it. If an employee doesn’t get sick, they should count their blessings and move on.
Here are two other ways to handle time off that some employers are doing – and I really like:
- Don’t have any limit on Paid Time Off (PTO) and base it on performance. This only works for job roles where performance is relatively easy to measure, but the normal experience is that employees take fewer days off when they have unlimited days. When an employer sets a number of days and it’s use it or lose it, employees feel obligated to take all of their days off even if they don’t need or want to.
- Don’t differentiate between “sick” and other forms of PTO. In this method, an employee just gets a fixed number of PTO days per year (still use it or lose it) and they can use it for whatever they want. It’s really none of the employer’s business whether the employee or sick or not. The only relevant fact is that the employee is not at work. With this method, employees can actually use more “sick” days, if they need it, but they do so at the expense of “vacation” days.
It is long past time for the State of Wisconsin to update their HR policies for the modern world.
Good morning,
I would think we should discuss an employee policy based on its merits. The question should be is it in the best interests of an institution to allow accumulated sick leave?
You point out that you believe that employee’s (in this case the government) could save money by ending the policy. I do not know if that it is true, because changing the policy changes people’s actions. If would seem that if people cannot accumulate sick days, then they are apt to use them.
It is hard to quantify effect of using sick days on an institution. If people cannot bank sick days, will they start calling in sick every Friday until they are used up? Will services then shut down on Fridays because there are not enough workers? Suppose a supervisor accuses a worker of not really being sick, how will this effect morale and productivity?
I am going to come out and say I do not know whether the net effect of the accumulated sick leave policy is worth the cost. It is something that is worth looking into. However, that is not what you have done here. You believe that accumulated sick leave is bad and you are coming up with reasons to justify your belief post hoc; it is expensive, private sector does not do it, etc.
Owen, I do not have accumulated sick leave do you? If you do not have accumulated sick leave is it possible that perhaps you are jealous of those who do? Is this influencing your opinion? Also I have heard of private sector employees having accumulated sick leave. Owen, did you research which companies have accumulated sick leave or did you just assume that only government workers would have it?
I am willing to accept or reject the idea of the accumulated sick leave policy being a good policy, but I would like my opinion to be based on fact and not emotion. Is that fair?
Hi Owen,
HR and labor relations is my professional realm now, so thought I’d chime in here with a few details. Also, hello, hope life is treating you well, etc.!
Generally speaking, I agree with you. And truth be told, I think a lot of state employees would agree with you too, regardless of their personal ideological bent. Sick leave conversion is only truly a benefit to the lifers out there in state employment. Contrary to public opinion, that’s actually a small handful of folks. (It’s a big financial impact, like Maciver outlines, but the benefit accrues narrowly.)
The one argument I would potentially make in defense of it is that, to the extent that helping employees bridge the health insurance gap until Medicare gets people who want to retire to actually retire, there can be improvements to morale, productivity, and cost. Older employees are usually more highly paid, their benefits are more expensive, and the last thing you want is someone hanging around at a high wage for an extra three or five years, or more, simply because they can’t afford to leave. It’s a benefit to everyone – taxpayers included! – when employees who want to retire can actually do so.
But for most of us who’ve been employed by the State of Wisconsin, it’s transitory employment. It’s one stop on a longer career path. I knew I wasn’t in it for the haul, and so I made sure to use my sick days – whether for physical well-being, mental health days because legislators are insane, etc. And that’s what they should be there for – to reduce presenteeism, ensure that people aren’t showing up needlessly and polluting their co-workers with germs, etc.
I’m a big fan of PTO with some hard cap on rollover. The reality, especially for employees with families, is that between kiddo illnesses, their own health, etc. rollover is the only way some employees could ever cobble together enough time for a two-week vacation. It’s also helpful in the event an employee has a longer-term health issue – especially if the employer isn’t funding a short-term disability policy.
I also like the unlimited time off, pay-for-performance approach. It’s probably my preferred approach if I had to pick one. Sadly, for pragmatic reasons, it doesn’t work well in the public sector. Unions still mostly want people to get paid to punch the time clock. And many states prohibit public employees from receiving retroactive pay, so performance bonuses are usually out of the question. It’d also be a giant problem in the legislature, because you know those goobers would be closing down their Capitol offices and sending their staff out to work campaigns. So ironically, such a policy would probably have to exclude non-represented employees, political appointees, etc.
If it were my world, I’d shift them all to PTO, allow some rollover, do a one-time cash-out or PTO conversion for accrued sick leave at some reduced percentage for employees under a certain age, and for older employees, I’d let them stick with the current policy, but I’d also make it clear that we’d pull the plug on their ability to use conversion after they (and their spouse) are both eligible for Medicare, or maybe we’d allow them to use it to purchase a Medicare supplemental policy or something. But no hanging out on the state health plan. Nope nope nope.
A huge welcome back to our Recess Supervisor
Yes indeed! What a welcome surprise to see Recess Supervisor back here. Forgot my screen name from the original iteration of Boots & Sabers, but those were the glory years for this blog. Mostly intelligent commenters who had no book for trolls and those with nothing to say. Seemed like the back and forth was going on 24/7. Kind of like the Althouse blog is today.
I spent many years covered by an identical plan for federal workers. Some guys used the sick time as vacation just as fast as they earned it, most used it responsibly as a true illness benefit, and a very few exceptionally healthy individuals accrued a career’s worth of banked sick time and were able to retire a bit early. But those were the days when a simple hernia repair could put you out of work for eight weeks, whereas now you’re back in about a week.
Vacations had to be scheduled, but sick days did not. The reliable, healthy lifers worked as scheduled, while the asshats who burned the sick time as fast as it was earned always managed to be sick on Fridays and Mondays, especially around the holidays and during hunting seasons. I never viewed the lifer who accrued a career’s worth of sick time as being the one who abused the benefit, but that’s back when personal responsibility was a thing to be admired. Now you’re viewed as a chump if you’re not gaming the system for all it’s worth. Times have changed. Maybe compensation schemes need to change too.
Indeed, it’s nice to see such thoughtful commentary!
I agree that any PTO methodology needs to geared to the benefit of the employer – and that includes it being attractive enough to help recruit and retain great employees.
Merlin may be onto something with a shift in the culture. Unlimited accrual of sick days could be argued to have the benefit of encouraging people to work rather than burn a sick day and also encouraging loyalty. But I completely agree with RS (welcome back) that the business is better served if people just take a sick day when they are sick rather than pollute the workplace will illness.
While my favorite methodology is also unlimited PTO with the job performance being the sole measure of compliance, RS and Merlin are probably right that the bureaucratic culture of most governments probably wouldn’t manage that well. The only way that works is if management is willing and able to measure and enforce performance.
Probably the best is a generic PTO plan with a capped, rolling carryover. For example, they could accrue a maximum of 150% of their allotted PTO on a rolling pay schedule basis. There would have to be some cash out for people under the old scheme, as RS says, but it’s workable.
Governor Walker would serve the taxpayers well to take a hard look at these policies. There are certainly ways to allow employees ample PTO while still being good stewards of the taxpayers’ resources.
I am also a State employee (not WI), but our sick leave works on a wholly different basis.
I can accrue unlimited hours of sick leave (the accrual rate depends on time served, but tops out at 6.46 hours/biweekly pay period). However, when I leave State service for any reason I get nothing for accrued and unused sick time. Those hours just evaporate.
Here’s the rub. Management-level employees have access to both short- and long-term disability plans. Non-management employees have no disability plans other than their accrued sick hours (I haven’t taken a single one in 22 years of service and currently have about 2800 hours accrued). The State wants dearly to get the non-management union group (VT is unionized, but we’ll see how long that lasts post-Janus) into the disability plans so that it can wipe the accrued leave liabilities off its balance sheet. The State’s price for admission into the plan is a limitation on sick hour accruals to whatever would be the gap time before a disability plan starts paying benefits combined with the elimination of existing accruals beyond whatever that level might end up being. Eminently reasonable, at least to me. For a good 10 years (and likely longer) the union has refused to bargain on this issue unless the State pays out whatever sick hours would be forfeited in return for the disability plan access. Sick hours that CANNOT be converted to cash at retirement or separation. Sick hours than can only be converted to cash by actually being sick. Bloody idiots.
In certain circumstances, specifically hourly workers in positions that tend to be chronically short-staffed (prisons, health care), there is a benefit to workers forgoing taking sick days off and being incentivized for that. For example, say that a prison guard making $10.00 an hour (for purposes of discussion, maybe this was 10 years ago) who is on first shift, decides to call in sick. So, a 3rd shift worker agrees to stay on an additional 4 hours and with time-and-a-half will make $15.00 and a 2nd shift worker will come in 4 hours early and also make $15.00 an hour. So, in that instance the staffing cost that day will be $80 for the person staying home sick, and $120 for the staff working time-and-a-half replacing him. We have seen articles about particular hourly employees racking up overtime income in excess of their regular income.
Like everything else, sometimes a solution to a problem (short-staffing) is too broadly applied (to everyone, whether or not it makes fiscal sense) and it gets expensive.
A hearty hello to those who chimed in after my post. I lurk mostly – I’m nearly 15 years removed from my last stint as a Wisconsin resident, so my ability to chime in meaningfully on your local issues is less robust than it used to be!
There have been lots of great points made, I’d like to throw in one other. I’m about to decamp for a few days next week for labor relations conference, where we talk about exactly these types of issues. For those who often lament the status quo, old-school unionism in the public sector, I will offer you one glimmer of hope from the inside that most of us recognize.
Younger employees are way more on the pay-for-performance side of things than not. And it’s because those sorts of approaches afford them better work-life balance, which for most is more desirable than their 3-4% step increase and their annual COLA. They want to be more productive, but they’re also not dumb. If you can do your week’s work in 30 hours but you have to punch the clock for 40, you just work slower. This is true be it public or private sector – it’s human nature.
People bemoan millennials for one reason or another, but when it comes to recognizing that a life lived at work isn’t much of a life at all, they’re way ahead of the Boomers – who alas, are still mostly running workplaces (and unions) with their outdated and old-school perceptions of personal identity. Very few people live for their jobs anymore. Nobody wants a years-of-service plaque or a watch. They want a workplace where they can come in, bust their hump for 7 hours, and then duck out early on a Thursday to catch their kid’s t-ball game without anyone giving them side-eye about it.
Of course, some service industry-type jobs are always going to be hourly by nature. I can’t pay the dude at Chipotle based on the number of burritos he makes. But for jobs where duties are mostly fixed and in places that aren’t customer-facing, I think we’re going to start seeing a change. Technology affords workplaces – and workers – all kinds of flexibility these days. The public sector is just way behind on embracing it. But as this last wave of Boomers retires and younger workers come into the public sector to pick up the slack, what they want out of their workplace is different than the generations before them, in ways that I think are mostly good.