According to the , a retiring “prison supervising dentist” became a millionaire overnight when the state paid him $1.2 million for unused vacation benefits that he had been accruing for decades. This mammoth payout represents just a drop in the bucket considering the more than $5.6 billion in unfunded liability the state has amassed for vacation and other leave benefits owed to current employees.
According to the article, state employees receive up to six weeks per year of paid vacation benefits, 11 paid state holidays, a paid “personal holiday” and paid professional development days. Apparently, there are policies in place that cap vacation balances at 640 hours for most state employees, but there is an inexplicable “failure to enforce” such policies. Any changes, notes the article, “would have to be negotiated with the state’s powerful and deep-pocketed public sector unions,” which are among the top donors to the unions’ many friends and admirers who control Sacramento.
Vital takeaway: Employers in the private sector should confirm that their vacation policies include a reasonable cap on the amount of vacation time employees may accrue and should otherwise verify with legal counsel their current compliance with California’s unique vacation accrual and payment rules to avoid potential liability pitfalls.