Unused Vacation Time a Growing Problem for State

When attorney Janice Rogers Brown left her job as Gov. Pete Wilson’s legal adviser last year to become a justice on the state’s 3rd District Court of Appeal, she cashed out the vacation, personal leave and holiday time accumulated in her years in state service.

Her unused 138 days off were converted into a lump sum payment of $52,359 when she moved to the judiciary, according to payroll records obtained from the state controller’s office.

“When I was in the governor’s office, I didn’t get much time off,” said Brown, who had earlier worked for the state attorney general.

The jurist was one of thousands of state employees who accumulate their vacations--and eventually cash them out--rather than use them.

While there is no question that they are entitled to the money--courts have ruled that the time is a vested right--the vast accumulation of vacation and leave time represents a sizable liability for state government.

As of June 30, California taxpayers owed their government employees more than $1.1 billion in accumulated vacation time, according to a controller’s office estimate.

And the amount is growing.

“We have given leave time as a benefit when we didn’t have cash,” said Patricia Pavone, chief of benefits and training for the state Department of Personnel Administration. “Now it’s coming back to haunt us. It’s borrowing in the future. Instead of a liability in 1991, we have it in 2001 in higher dollars when people retire.”

State policies that put a cap on the amount of leave time that can be accrued and eventually cashed out are not observed uniformly. A department computer survey of 72,000 state employee records found that 6,665 had accumulated vacation and leave time in excess of their limits.

More than 100 employees have accrued the equivalent of half a year’s pay or more, according to the study, and one unidentified individual has saved up more than 2,000 hours--the equivalent of a year’s pay.

As Pavone and others point out, unused leave time is cashed out at a worker’s final salary, which in most cases has risen with cost of living adjustments and promotions.

“The system is far too generous,” said one former high-level executive branch appointee, who cashed out a sizable amount of accumulated time when he left government. He asked not to be identified. “If you added the state holidays, the floating holidays, the annual leave hours, you can accumulate enormous amounts of time. You can take a reasonable or small amount of vacation and leave state service and have an enormous accumulation.”

Official state policy and negotiated employee contracts set the maximum at 50 days of vacation time, or 80 days for employees who decide to forgo sick days in exchange for a more generous “annual leave” system.

In contrast, federal government policy allows workers to carry only 30 days of accrued leave time into the next year. And several states also have a 30-day limit, including Florida, Arizona, Nevada and Washington, according to a survey conducted by Workplace Economics Inc. of Washington, D.C.

Many private businesses along with the federal government take a “use it or lose it” approach to vacation time, limiting their future liability by putting a cap on the amount that an employee can carry over into the next year.

However, California is legally unable to enforce its relatively generous limits, officials say. To take away excess time that has not been used at the end of the year would require a change in state law and would be subject to labor negotiations, said Pavone’s boss, personnel administration director David J. Tirapelle.

Instead, supervisors are supposed to sit down with their employees and set up vacation schedules that will ensure that vacation time is used.

“We want employees to take their vacations,” said Department of Personnel Administration spokeswoman Shirley McCall. “It’s there to use, not to accumulate for financial purposes.”

Generally, the higher the employees’ rank in the bureaucracy, the more likely that they will exceed the cap, department statistics show.

The highest ranking employees, people such as the governor’s former legal adviser, Justice Brown, say they find it almost impossible to get away for more than a few days at a time because of the demands of their jobs.

And career employees in certain departments--Emergency Services, Caltrans and the California Highway Patrol--find it difficult to use up their time as fast as they accumulate it.

When four ranking Highway Patrol officers left their jobs last year--to retire or because of disability--they took with them lump sum payments totaling $245,800 in vacation and compensatory time.

For example, former chief deputy Harry T. Adair cashed out 46 weeks of accumulated time worth $82,894.

Lynn Newquist, commander of personnel services for the CHP, said her agency tries to comply with state policy. “The commanders review vacation and annual leave balance usually around June 1 of each year and usually encourage employees to plan on time off,” she said.

But a broad exception to the state leave policy is made to allow for natural emergencies and public calamities, she said. And the unused time can accumulate quickly.

New state employees start earning as much as 16.5 days off a year--10.5 days of vacation plus six additional days if they decide to trade sick days, which cannot be cashed out, for added “annual leave” days.

After the third year, they begin to earn 22.5 days of leave time annually. The amount of annual leave time continues to climb in increments to a maximum of 30 days after 25 years.

Few private employers have been quite so magnanimous with benefits, according to a 1993 survey conducted by the U.S. Chamber of Commerce. Only one in 10 companies surveyed offered their workers more than 20 vacation days off each year--even after 20 years of service.

And in an effort to balance the state budget during California’s lean recession years, state workers in 1991 were given one additional day off a month in exchange for a 5% pay cut. For most workers, the additional days were given for a year and a half, until the pay cut was restored. For many of the governor’s appointees, however, the pay cut remains in place, and they continue to accumulate the added time. (This added leave time does not count toward the state’s 80-day limit.)

“The theory is since we couldn’t give them a pay raise, we should give them a day off instead,” said Wilson press secretary Paul Kranhold.

But large numbers of state workers simply banked the time, waiting for the day when they would leave government service and cash it out.

There are a number of reasons why state workers find it easy to accumulate leave time rather than use it.

For one, the state is generous with paid holidays--13 per year. Only six other states observe that many, according to the Workplace Economics survey.

And many have been able to accumulate large amounts of compensated time off--or “comp time”--for working extra hours or on weekends. This is time that they can use in place of leave time for their vacations.

The top salaried state employees, including the governor’s top appointees and attorneys, are generally not eligible for comp time, although exceptions can be made in recognition of several days of unusually arduous work, said Edmund Brehl, labor relations counsel for the Department of Personnel Administration.

But this year the state auditor reported that a number of supervisors, managers and attorneys working for the Department of Fish and Game and the legal division at the Department of Transportation had been banking sizable amounts of comp time, in violation of state policy. The employees were using the time instead of vacation leave. One unnamed Caltrans attorney had banked almost a half a year’s worth of comp time--the equivalent of $43,891, the auditor’s report said.

Other Caltrans employees have been allowed to accumulate vacation time far in excess of state limits.

When former Caltrans district director Jerry B. Baxter left his $85,900-a-year post in Los Angeles last year for a top-paying job at the Metropolitan Transportation Authority, he cashed out his vacation time.

The 161 days of leave time that he had accumulated in his 35 years with the department entitled him to a lump sum payment of $56,730.

Caltrans spokesman Jim Drago said part of the problem has been downsizing the agency. “As we’ve been reducing the size of the department, the opportunity for other people to take vacation time gets reduced,” he said.

Top employees at other departments say they find they cannot break away for prolonged vacations. Charles S. Poochigian, the governor’s former appointments secretary, said he rarely was able to get away for a vacation for more than a few days at a time while working for Wilson or for Gov. George Deukmejian.

“I’m not claiming I was overworked and underpaid,” said Poochigian, who last year ran successfully for the Assembly from Fresno. “I think the compensation was quite good given the job opportunity and satisfaction. But there are few opportunities for time off when you work for the governor or the Speaker of the Assembly, people at that level.”

Last year, Poochigian said he used up leave time in his successful campaign for the Legislature. But he still had enough left over after seven years of government service to receive a lump sum of $26,770 for his unused time.

When James W. Robinson left his job as Atty. Gen. Dan Lungren’s communications director last year, he cashed out his remaining vacation time--118 days and six hours--for $45,384. He had accumulated the time over more than a decade in government, starting under Gov. Deukmejian.

In a recent interview, Robinson told a reporter: “If you’re suggesting that a person in a relatively high-level, high-pressure job can quickly accumulate a lot of time that can then be cashed out in what sounds like big amounts, that’s absolutely right. That’s the way the system is set up.”