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California makes huge payouts for some workers' unused time off

Contracts cap unused vacation balances at 80 days but allow exemptions for those who are needed in emergencies or who perform 'critical' work. Some have retired with six-figure compensation checks.

May 15, 2011|By Jack Dolan, Los Angeles Times
  • Firefighters, prison employees and highway patrol officers dominate the ranks of those with giant vacation accounts.
Firefighters, prison employees and highway patrol officers dominate… (Lori Shepler, Reuters )

Reporting from Sacramento — Managers in California's government routinely ignore official limits on the number of vacation days their employees can save, compelling the state to cut huge checks — many worth six figures — for unused time off when workers retire.

Prison doctor Fong Lai received $594,976 when he retired in 2010. Like most state employees, Lai was supposed to bank no more than 80 days of vacation, but his payment represented more than 2 1/2 years of unused time off.

Jay Wickizer, an administrator for the Department of Forestry and Fire Protection, saved about the same number of days, resulting in a $294,440 check upon his retirement last year. Former parole agent Thomas Berns accrued nearly three years' worth of time off, allowing him a $268,990 cash-out, state records show.

Such payouts are almost unheard of in the private sector. Most companies allow employees to accrue a few weeks of vacation, but after that it's "use it or lose it," said Steven Frates, research director of Pepperdine University's Davenport Institute on public policy. "The theory behind vacations, of course, is rest and recuperation and recharge."

But in state government, lax oversight, understaffing and a spate of furloughs in recent years have resulted in widespread stockpiling.

"This is a problem throughout state service because the vacation caps have not been enforced," said Gil Duran, spokesman for Gov. Jerry Brown. The governor plans to chip away at the vacation stockpiles with a "budget that is honest and doesn't rely on gimmicks like the furlough program," Duran said.

Of slightly more than 14,000 full-time employees who took a lump-sum payout for unused time when they left state jobs last year, 29% received checks for more than 80 days' pay, according to a Times analysis of data from the state controller's office. Such departure payments in 2010 were compared with each employee's regular pay in 2009 to estimate the number of days off those payments represented.

Nearly 400 employees left state jobs last year with checks equaling or exceeding their previous year's salary, the data show. In most cases, that meant the workers had saved more than a year's worth of time off — more than 260 work days. Lump-sum payments can include money from legal settlements, but the state cannot say which employees received such compensation without violating the confidentiality of personnel records, according to Jacob Roper, spokesman for Controller John Chiang.

The state calculates the payouts using employees' final pay rate, which is generally higher than what they earned earlier in their careers. So the saved vacation days cost the state more than they would have if the employee had taken them as they were earned.

And the number of employees who benefit from large stashes of vacation is actually larger than payroll records show, state officials acknowledge, because some workers choose to "run out" long stretches of unused time at the end of their careers. They stop working but continue to be paid until their banked time is used up.

The controller's office cannot tell how many employees do this, because payroll records offer no way of tracking it, Roper said.

While managers are directed to help an employee reduce accumulated leave when he or she nears the 80-day cap, most public worker contracts allow exceptions for those denied vacation because they are needed in an emergency — to fight a fire or battle a flood, for example — or are assigned work of a "critical nature over an extended period of time."

That final exception, officials say, accounts for much of the banked vacation taxpayers are on the hook for. The state distributed $294 million in departure payments last year.

"A lot of it has to do with hiring freezes," said Lynelle Jolley, spokeswoman for the state Department of Personnel Administration, the agency that negotiates contracts with state employees. "You have people working in core positions where they can't take time off."

Many employees also have large numbers of personal days that were granted in lieu of raises dating to the administration of Gov. George Deukmejian, Jolley said, and those days are not subject to the contractual cap.

Wickizer said he battled fires and floods during his 37 years with Cal Fire, rarely taking vacation. Many of the thousands of hours of time off he accumulated came from his days as a manager with the agency when, instead of being paid overtime, he was given "compensated time off" when he worked more than 40 hours a week. He often worked 80-hour weeks, he said.

"I did not abuse the system," Wickizer said.

Thomas Berns said managers at the California Department of Corrections and Rehabilitation never questioned his stockpile of unused vacation as it built up over 28 years. Although he knew he'd get paid for those days eventually, he said he was "quite astonished" when he learned what the time was worth.

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