Employee annual and sick leave : requested information on state agency and USG employee leave policies

Special Examination 11-19

December 2011

Georgia Department of Audits and Accounts
Performance Audit Operations
Russell Hinton, State Auditor Leslie McGuire, Director

Why we did this review
Our review of the annual and sick leave policies covering state and University System of Georgia employees was conducted in response to a request by the Senate Appropriations Committee. The Committee asked that the report include: the circumstances allowing the
payout of leave and who receives the payouts; the amount of annual payouts and the funding source; any observed correlation between accumulated leave and salary levels; and the common business practices in other state governments and the private sector.
Who we are
The Performance Audit Operations Division was established in 1971 to conduct in-depth reviews of state programs. The purpose of our reviews is to determine if programs are meeting their goals and objectives; provide measurements of program results and effectiveness; identify other means of meeting goals; evaluate the efficiency of resource allocation; assess compliance with laws and regulations; and provide credible management information to decisionmakers.
Website: www.audits.ga.gov Phone: 404-657-5220 Fax: 404-656-7535

Employee Annual and Sick Leave
Requested Information on State Agency and USG Employee Leave Policies
What we found Employees who separate from service with the State of Georgia and University System of Georgia (USG) are paid for unused annual leave. In fiscal year 2011, state agencies and USG institutions made payments of approximately $60 million for unused annual leave. About $43 million was paid to terminating employees, while the remainder was paid in the form of payroll taxes and payments to the State Health Benefit Plan. State agencies paid an additional $5.6 million to the Employees Retirement System for forfeited and unused sick leave held by retiring employees.
The majority of leave payments made in fiscal years 2008 through 2011 were less than $2,500. Of 35,000 employees terminating from state agencies, more than 21,000 received less than $2,500. By contrast, 1,700 received payments of more than $10,000. Of the 6,700 terminating USG employees, over 3,800 received less than $2,500 and 700 received more than $10,000.
We found a positive correlation between state employees' and USG employees' total leave balances (annual, sick, forfeited) and salary level; however, the correlation was more significant when salary is combined with years of service. It is likely that leave balances may also be correlated with other factors, such as gender, marital status, presence of children, and exempt vs. nonexempt positions.
When compared to six southeastern states, the annual and sick leave policies applicable to Georgia state agencies are not uncommon. Regarding annual leave, several states provide fewer hours to new employees but more hours for employees with many years of service. All states in our review allow carryover of leave at the end of the year and pay terminating employees for

unused annual leave, but three states have a maximum balance lower than Georgia's 360 hours, which limits the payout. Most states provide fewer sick leave hours per pay period, but all have maximum balances higher than Georgia's 720 hours. Five states provide a retirement benefit for unused sick leave, and the one that does not provides a payment for a portion of unused sick leave. No other state provides a termination payment for unused sick leave.
Georgia's annual and sick leave policies exhibit fewer similarities with the private sector. A significant portion of private companies have a single, Paid Time-Off (PTO) leave bank, making direct comparisons more difficult. Companies with traditional, separate plans for annual and sick leave generally provide fewer days of leave, are less likely to allow leave to be carried over from one year to the next, and are less likely to provide a retirement benefit for unused leave. Like Georgia, companies frequently provide a payment for unused annual or PTO leave.
Depending on the type of employee (e.g., regular, faculty, administrative officer), USG's sick and annual leave policies are more or less generous than those of 11 comparable institutions we reviewed. USG's annual leave policies for regular staff and administrative officers are more generous to new employees than most other institutions, but grant fewer days to staff with more years of service than most. USG's policies show similarities to comparable institutions in other aspects reviewed, including allowing unused annual leave to be carried forward at the end of the year and paying employees for unused leave upon termination. Sick leave policies of USG and other institutions are also similar in certain aspects, such as a single accrual rate regardless of years of service, allowing employees to carry over unused leave at the end of the year, and providing very high or unlimited accrual provisions. Compared to USG, most institutions provide as many, or more, sick leave hours to employees each year. However, while USG employees benefit from unused sick leave at retirement, a majority of the comparable schools do not provide a similar benefit for employees.
It should be noted that when comparing leave policies, employee leave should be considered in the context of the larger compensation package. Employers can distribute employee compensation differently across numerous categories, including salary, retirement, health insurance, leave, flexible work schedules, life insurance, and various other forms of compensation. A better comparison would consider total compensation and the pros and cons of the current distribution.

Employee Annual and Sick Leave

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Table of Contents

Purpose of Special Examination

1

Background

1

Overview of Leave

1

State Employees

2

University System of Georgia Employees

3

Requested Information

5

Under what circumstances does the state pay out accrued sick or annual leave?

Who receives these payments?

5

Other than the time taken for illness or vacation, how much does the state pay

out yearly in annual and sick leave?

8

For employees that are primarily funded with federal or agency funds, do the

payouts use the appropriate fund source?

13

Is there a correlation between accumulated leave and salary level? Are

employees with higher salaries more likely to have greater amounts of

accumulated leave?

16

What is the common business practice in other state governments and in the

private sector in terms of the amount of leave that can be accrued? What are

the common practices in terms of applying accrued leave to retirement?

19

Appendices

Appendix A: Objectives, Scope, and Methodology

29

Appendix B: Annual Leave Payments per Agency, FY08-11

33

Appendix C: Annual Leave Payments per USG Institution, FY10-11

35

Appendix D: Annual and Sick Leave Policies of Southeastern States & the

Federal Government

36

Appendix E: Companies' Vacation and Sick Leave Policies

37

Appendix F: Sick & Annual Leave Policies of Comparable Institutions

39

Employee Annual and Sick Leave

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Employee Annual and Sick Leave

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Purpose of Special Examination
The purpose of this special examination was to answer the following questions posed by the Senate Appropriations Committee regarding the annual and sick leave policies that cover state employees and University System of Georgia (USG) employees:
Under what circumstances does the state pay out accrued sick or annual leave? Who receives these payments?
Other than the time taken for illness or vacation, how much does the state pay out yearly in annual and sick leave? For employees primarily funded with federal or agency funds, do payouts use the appropriate fund source?
Is there a correlation between accumulated leave and salary level? Are employees with higher salaries more likely to have greater amounts of accumulated leave?
What is the common business practice in other state governments and in the private sector in terms of the amount of leave that can be accrued? What are the common practices in terms of applying accrued leave to retirement?
Unless otherwise stated, state employees or employees of state agencies refers to individuals employed by executive, legislative, and judicial branch agencies, excluding USG. References to USG employees include those in the 35 public colleges and universities, USG offices, and the Skidaway Institute of Oceanography. Other details regarding the objectives, scope and methodology are located in Appendix A.
Findings in the report have been communicated to appropriate personnel with the State Personnel Administration and the University System of Georgia and a draft copy of this report was provided for their review and comment. In their written responses, the agencies indicated that they have no disagreements with the report.

Background
Overview of Leave
Annual and sick leave policies allow employees to receive full pay when absent from work. The specific policies that govern the accrual and use of leave depend on the employer. The State Personnel Board (SPB) sets many of the leave rules affecting a majority of state agency employees, while the Board of Regents for the University System of Georgia (USG) sets rules governing its employees.
Both entities allow annual leave to be used for any purpose chosen by the employee, but employees must obtain permission from their agency prior to the absence. Sick leave is to be used for personal illness, medical care, preventing the spread of contagious diseases, or illness/death of an immediate family member. Neither sick nor annual leave can be taken before it is earned and credited. Leave is earned when the employee is paid, which is semi-monthly or monthly, depending on the employer.
While this report only covers annual and sick leave, employees may also benefit from other types of leave. Examples included in SPB policies include leave to attend jury duty, perform military service, donate blood, and serve as a disaster volunteer.

Employee Annual and Sick Leave

2

Leave as a Component of Total Compensation

Sick and annual leave policies are one of several components that may exist in employee compensation packages. Salary is generally the largest component, but human resources managers consider many other paid and unpaid benefits when assessing an employee's total compensation. The Society of Human Resources Management included more than 250 types of benefits in its 2011 Employee Benefits Survey. Categories and examples of components of compensation include:
Healthcare benefits insurance, healthcare spending accounts, disability insurance
Retirement benefits pension, 401k
Non-salary financial compensation bonuses, life insurance, credit union, education expenses
Paid time off holidays, vacation/annual leave, sick leave, military leave
Family-friendly benefits dependent care spending accounts, domestic partner benefits
Flexible working benefits flexible working schedules, telecommuting, casual dress days
For the employees covered in this report, the State Personnel Board and the Board of Regents of the University System of Georgia manage employee compensation packages. These packages change each year as the entities alter components to meet market demands and budgetary constraints. Some components of compensation, such as salaries or health benefits, may change annually. Others, like annual and sick leave accrual and use policies, may remain largely unchanged for many years.

State Employees O.C.G.A. 45-20-16 requires that SPB establish sick and annual leave rules that apply to all executive branch agencies, except the USG. Many judicial and legislative branch entities have chosen to follow these rules as well. As a result, SPB sick and annual leave rules are applied to the majority of the state's 80,000 employees.
As shown in Exhibit 1, employees earn annual leave based on their years of service, but sick leave is a set amount regardless of tenure. Annual leave totals three weeks in each of an employee's first five years and reaches 4.2 weeks after 10 years. Sick leave totals three weeks per year. Employees who work part-time can earn leave on a pro rata basis. According to SPA staff, the rates at which employees accrue sick and annual leave have not changed since the 1950s.

Exhibit 1 Leave Hours Earned by State Employees per Month

Months of Service

Annual Leave

Sick Leave

0 60

10 hours

10 hours

61 120

12 hours

10 hours

121 or more

14 hours

10 hours

Maximum Accumulation

360 hours (45 days)

720 hours (90 days)

Source: State Personnel Board Policy Note: If an agency pays employees semi-monthly, the employees earn 1/2 of the monthly leave in each pay period. For example, a 0-60 month employee would earn 5 hours of annual leave during each pay period.

Exhibit 1 also shows that employees may accumulate leave above the amount earned in a single year. For example, although an employee with five years of service can only earn 120 hours per year, he or she can accumulate up to the 360-hour maximum. Any sick or annual leave earned over the maximum amount allowable is not available for use by the employee as time off but is placed in a separate forfeited leave account.

Employee Annual and Sick Leave

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The Georgia Employees Retirement System (ERS) allows forfeited leave to be used as credit towards retirement if a member accumulates a minimum of 960 hours (120 days) in combination of forfeited leave and unused sick leave. Employees nearing retirement who accrue this 960-hour threshold can retire six or more months early or apply additional service credit, with every 160 hours (20 days) earned counting as one month.

State agencies that receive an employee transferring from another agency, without a break in service, must recognize that employee's accumulated sick, annual, and forfeited leave.

University System of Georgia Employees
State law specifically exempts the university system from SPB rules. Instead, O.C.G.A. 20-3-31 gives the Board of Regents of the USG the power to "make any reasonable rules and regulations as necessary for the performance of its duties," which includes setting the compensation for faculty and staff. USG policies cover approximately 42,000 faculty and staff at 35 institutions, USG offices, and the Skidaway Institute of Oceanography.
As shown in Exhibit 2, USG policies set different annual leave accrual rates for staff and faculty members. Full-time staff members earn annual leave based on their years of service, while 12-month faculty members' accrual rate does not change over time. Faculty members who have 9 or 10-month contracts receive no annual leave. All faculty and staff earn the same rate of sick leave, regardless of length of service. Staff who work at least 20 hours, but less than 40 hours per week can earn leave on a pro rata basis.

Exhibit 2 Leave Hours Earned by USG Employees per Month

Annual Leave

Faculty

Months of Service

Full-time 12-Month and

Staff

Admin Officers 9-10 Month

0 60

10 hours

61 120 121 or more

12 hours 14 hours

14 Hours

Not Eligible

Maximum Accumulation

360 hours (45 days)

Source: BOR Policy Manual and USG Administrative Practice Manual

Full-time Staff
8 hours

Sick Leave
Faculty 12-Month and Admin Officers 9-10 Month

8 hours

8 hours

No Maximum

Unlike state employees who can forfeit excess leave and apply it towards retirement under ERS, USG employees lose any annual leave held over the maximum at the end of a calendar year. USG employees frequently participate in the Teachers Retirement System, which does not recognize forfeited leave. However, retirees who have accumulated at least 480 hours (60 days) of sick leave can apply the leave as service credit after retirement. Retirees receive one month of service credit for every 20 days accrued.
Although a state employee who transfers to a position in USG may retain their status

Employee Annual and Sick Leave

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as an ERS member, most USG employees are members of the Teachers Retirement System (TRS). Alternately, when hired, USG employees may elect to be part of the USG Optional Retirement Plan in lieu of membership in TRS. The Optional Retirement Plan does not offer a retirement incentive for unused sick leave.

USG policies regarding recognition of leave balances when changing employers or positions consider several factors. If a state agency employee moves to a USG institution, the institution does not recognize the employee's annual leave balance; however, up to 96 hours of sick leave can be transferred to the USG provided the employee has no more than a 30-day break in service. Employees who transfer between USG institutions without a break in service must transfer up to 160 hours of annual leave but may choose to receive payment for any hours over 160. Faculty members who change from a 12-month to a 9- or 10-month position must be compensated for any unused, accrued annual leave up to the 360-hour maximum.

Employee Annual and Sick Leave

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Requested Information
Under what circumstances does the state pay out accrued sick or annual leave? Who receives these payments?
Employees' accrued annual and sick leave is paid out in different manners and to different entities, depending on the employee's status and employer. Current employees, terminating employees, and retiring employees receive different benefits from their accrued leave, as do employees of state agencies and the university system.
State Employees
Current Employees As previously noted, state agencies allow annual leave to be used for any purpose chosen by the employee, but employees must obtain permission from their agency prior to the absence. Sick leave is to be used for personal illness, medical care, preventing the spread of contagious diseases, or illness/death of an immediate family member.
Leave is earned when the employee is paid and cannot be taken before earned. When taken, the appropriate hours are deducted from the employee's leave balance and the employee receives the usual paycheck.
Terminating Employees Employees who separate from state employment are paid for any balance of unused annual leave, which is capped at 360 hours by SPB policy. As illustrated in Exhibit 3, the annual leave payment (ALP) is based on the employee's final hourly pay rate1 and is the responsibility of the employee's agency at the time of separation from state service, regardless of whether the employee previously held positions with other state agencies. The agency withholds income and payroll taxes from the ALP, as with any other paycheck.
In addition to the payment to the terminating employee, agencies make payments to other groups. Agencies pay the employer's contribution for the State Health Benefit Plan (SHBP), 25.586% in fiscal year 2011, to the Department of Community Health. Also, agencies pay the employer's share of the two Federal Insurance Contributions Act (FICA) components, which is 6.2% for Old Age, Survivor's, and Disability Insurance (i.e., Social Security) and 1.45% federal Health Insurance (i.e., Medicare).
Employees do not receive payment for any unused sick or forfeited leave, but the state does recognize the balance if the employee returns to the state after a break in service. Previously unused leave is treated the same as forfeited leave.
Retiring Employees Like other terminating employees, those retiring from state service receive an ALP for any balance of unused annual leave. Additionally, the Employees Retirement System (ERS) will recognize any balance of at least 960 hours of unused sick, forfeited, and previously unused leave as service credit towards retirement. A balance of 960 hours will result in an additional six months of service credit, and each additional 160 hours will count as another month of service. These additional service credits may
1 Since most employees are paid an annual salary, agencies calculate an hourly rate by dividing the annual salary by 2,080, the number of working hours in a year.

Employee Annual and Sick Leave

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make the employee eligible for retirement early or may be used to add additional credits to an already eligible retiree. As illustrated in Exhibit 3, the employee's agency must pay the employer contribution to ERS for the period of service credit granted to the employee. This payment represents the employer contributions that would have been made had the employee worked those months at the current rate of pay.

Exhibit 3 Illustration of Leave Costs for Terminating Employee
(Based on rates in effect as of October 2011)

Salary $41,000

Leave Balances Annual Leave: 260 hours Sick Leave: 720 hours Forfeited Leave: 1,100 hours

ALP

SHBP

FICA

ERS (if retiring)

$5,1251

$1,311

$392

$4,5202

(Annual Salary/2080) x
Annual Leave Hrs.

ALP x
SHBP Rate

Cost if Terminating but not Retiring: $6,828

ALP

((Sick + Forfeited Leave Hrs./160)

x

x Monthly Salary)

FICA Rate

x ERS Rate

Cost if Retiring: $11,348

1ALP = $19.71 x 260; SHBP = $5,125 x 25.59%; FICA = $5,125 x 7.65%; ERS = (((720+1,100)/160) x $3,416) x 11.63% 2Assumes retirement in FY12 under the New Plan with an employer contribution of 11.63%. Source: State Personnel Board, Department of Community Health, Social Security Administration, and Employees Retirement System Policies
University System of Georgia Employees
Current Employees Like state employees, USG employees may use accrued annual leave for any purpose but must obtain supervisory approval prior to the absence. Sick leave is to be used for personal illness, medical care, preventing the spread of contagious diseases, or illness/death of an immediate family member.
USG makes cash payments for accrued annual leave to current employees under two primary circumstances: 1) the employee moves from a benefitseligible position to an ineligible position or 2) the employee transfers from one USG institution to another. For example, an employee who transfers from a full-time faculty position to an academic year (9-10 months) faculty position would receive cash payment for any unused annual leave up to the 45-day (360 hours) maximum payment because 10-month faculty cannot accrue annual leave. In addition, an employee who moves between USG institutions without a break in service may request payment for any accrued annual leave balance over 20 days (160 hours); however, such payments are subject to a 25-day (200 hours) maximum payment. Payment is the responsibility of the institution from which the employee is moving.
It should be noted that one institution, Georgia Health Sciences University, allows certain hospital employees to cash in a portion of their annual leave

Employee Annual and Sick Leave

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balance once per fiscal year.2 However, hours paid in any one year cannot exceed the 45-day (360 hours) maximum payment established in BOR policy. According to an institution representative, this practice is considered part of the hospital's compensation policy.

Terminating Employees Like state employees, individuals who separate from USG employment (or their beneficiaries) are paid for any balance of unused annual leave up to the 45-day (360 hours) maximum payment. The payment is based on the employee's final hourly pay rate3 and is the responsibility of the employing institution at the time of separation from USG service, regardless of whether the employee previously held positions with other institutions. The institution withholds income and payroll taxes from the leave payment, as with any other paycheck.
In addition to the payment to terminating employees, institutions also pay the employer's share of the two FICA components, which is 6.2% for Old Age, Survivor's, and Disability Insurance (i.e., Social Security) and 1.45% federal Health Insurance (i.e., Medicare). (See Exhibit 3 for an illustration of how costs associated with annual leave payments are determined for terminating employees.) No payments are made toward employees' health benefit plans because, unlike state agencies, USG does not make contributions to its health plan based on salaries/payments to employees.
Any unused sick leave at the time an employee terminates service with USG is forfeited. However, if an employee returns to the USG service, forfeited leave can be used to purchase service credits upon retirement.
Retiring Employees Like other terminating employees, those retiring from USG service also receive payment for any balance of unused annual leave up the 45-day (360 hours) maximum. USG employees who are members of ERS and have at least 960 hours of unused and forfeited sick leave (from USG service) and forfeited and previously unused leave (from state employee service) may also use the hours to obtain additional service credits upon retirement. USG institutions must pay the employer contribution to ERS for the period of service credit granted to the employee.

USG employees who are members of the Teachers Retirement System (TRS) may also apply unused and forfeited sick leave balances of 60 days (480 hours) or more toward additional service credits. However, according to TRS policy, compensation paid as terminal annual or personal leave, and compensation paid for unused or forfeited sick leave is not subject to TRS contributions.

2 This benefit pertains to those individuals employed by the Georgia Health Sciences Medical Center who are vested in the Teacher's Retirement System and remain a university employee (versus a hospital employee).
3 Since most employees are paid an annual salary, institutions calculate an hourly rate by dividing the annual salary by 2,080, the number of working hours in a year.

Employee Annual and Sick Leave

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Other than the time taken for illness or vacation, how much does the state pay out yearly in annual and sick leave?
In fiscal year 2011, state agencies and USG institutions paid out approximately $60 million for unused annual and sick leave. This amount includes the amount paid to state agency and USG employees, SHBP, ERS, and FICA payroll taxes. Most costs are associated with unused annual leave, since unused sick leave costs are only incurred if a retiring state employee has enough combined sick and forfeited leave to gain ERS service credit. Details for the state agency and USG populations are included below.

State Employees
State agencies paid $152.9 million associated with unused annual and sick leave during the four-year period ending in fiscal year 2011. As shown in Exhibit 4, annual state costs were $36 to $37 million in fiscal years 2008 to 2010 and more than $42 million in 2011. (By comparison, state agencies paid an estimated $3.8 billion in salaries and benefits during 2011.) The fiscal year 2011 increase in annual leave payment costs is associated with a number of factors, including higher average annual leave payouts, additional terminating employees, and a higher SHBP contribution rate.

Exhibit 4 Total Amount Paid for Unused Leave
(Fiscal Years 2008-2011)

$45,000,000 $40,000,000 $35,000,000 $30,000,000 $25,000,000 $20,000,000 $15,000,000 $10,000,000
$5,000,000 $0
Average ALP Terminating Employees
Retiring Employees

ALP SHBP FICA ERS

$36.3
$4.8 $1.8 $5.5

$36.7
$5.6 $1.9 $3.1

$37.2
$6.1 $1.8 $5.1

$24.2

$26.0

$24.2

2008 $2,505 9,676
888

2009 $3,025 8,606 1,000

2010 $3,084 7,859 1,033

$42.7 $5.6 $2.1 $7.1
$27.9
2011 $3,144 8,872
965

Source: State Accounting Office, Department of Family and Children Services and Employee's Retirement System records, Department of Community Health and Social Security Administration policies

Employee Annual and Sick Leave

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Approximately 65-70% of state costs each year were for direct payments to terminating employees for unused annual leave,4 with remaining costs associated with SHBP, ERS and FICA. While FICA amounts are directly related to the annual leave payments, SHBP and ERS amounts are dependent on other factors. SHBP costs are also driven by employer contribution rates, which were unusually low for much of 2009 but reached more than 25% in 2011. ERS costs depend on the number of retirees with enough sick and forfeited leave to qualify for service credit and each retiree's ending pay. It should be noted that, unlike the annual leave and FICA payments, those made to the SHBP and ERS are transfers to other state entities.
As shown in Appendix B, the Departments of Human Services and Corrections had the highest costs associated with unused leave, at $27.3 and $25.7 million respectively. The Department of Transportation (DOT) was next at $9.8 million. As expected, agencies with the highest unused leave payouts had a very high number of terminations. However, some agencies' costs were especially impacted by ERS payments. For example, 33% of DOT's costs were associated with ERS payments, compared to less than 13% of DHS and GDC costs.
The majority of terminating employees received an annual leave payment of less than $2,500, and the majority of the payment costs are associated with payments under $10,000. As shown in Exhibit 4, the average annual leave payment each year was between $2,505 and $3,144. For the four-year period, Exhibit 5 shows that 21,626 of the approximately 35,000 terminating employees received an annual leave payment of less than $2,500. More than 33,000 received less than $10,000, constituting $78.9 million of the $102.4 million in annual leave payments made during the 2008-2011 period. The 1,692 employees receiving payments over $10,000 received $23.5 million.

Total Leave Payments

25,000 20,000 15,000

Exhibit 5 Employees by Range of Annual Leave Payment

21,626 $17.7

$22.6

(Fiscal Years 2008-2011)
$23.3

$25,000,000 $20,000,000

$15.3 $14.5

$15,000,000

Number of Employees

10,000

5,000
0 $0-$2,500

6,061

$5.9

3,851

$3.1

1,779

1,222

345

125

$2,500-$5,000

$5,000-$7,500 $7,500-$10,000$10,000-$15,000$15,000-$20,000

Over $20,000

Payment Range

Source: State Accounting Office Records

$10,000,000 $5,000,000 0.00

4 The total cost of annual leave payments for the four-year period was $102.4 million.

Employee Annual and Sick Leave

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As shown in Exhibit 6, a large number of employees who received an annual leave payment were at the low or high end of the annual leave balance range. Employees with less than 60 hours of annual leave constituted the largest group, at more than one third of the total. Those with 300-360 hours were the next largest group. Expectedly, this final group received a large portion of the annual leave payouts at more than $59 million of the $102 million paid out.

Number of Employees

Total Leave Payments

Exhibit 6 Employees by Range of Annual Leave Payment Hours

14,000 12,000

12,864

(Fiscal Years 2008-2011)

$59.2

$70,000,000 $60,000,000

10,000 8,000 6,000

6,301

4,000

2,000 0

$4.9 0-60

$9.1 60-120

Source: State Accounting Office Records

3,610

2,386

$9.3

$9.1

120-180

180-240

Hours of Paid Leave

1,992 $10.4 240-300

7,813

$50,000,000 $40,000,000

$30,000,000

$20,000,000

$10,000,000

$0 300-360

University System of Georgia Employees
In fiscal years 2010 and 2011, USG institutions paid a total of $28.9 million in annual leave payments and associated taxes and retirement system contributions. As shown in Exhibit 7, USG costs were $12.4 and $16.5 million for the two years. (By comparison, USG institutions paid an estimated $3.6 billion in salaries and benefits in 2011). The change in annual leave costs is largely explained by an 18% increase in employees who received annual leave payments, from 3,052 in 2010 to 3,603 in 2011. The average payment to an employee was roughly $3,900 in both years.
Approximately 93% ($26.8 million) of USG costs each year were for direct payments to transferring, terminating, or retiring employees for unused annual leave, with remaining costs associated with FICA and ERS. Unlike state employees, ERS payments had very minimal impact on USG costs. During the two-year period under review, two institutions made payments to ERS on behalf of two retiring employees totaling $17,453.
As shown in Appendix C, the four research institutions accounted for the highest costs associated with unused leave with total costs ranging from $2.1 to $6.0 million over the two-year period. One other institution, Kennesaw State University, was also among the five institutions with the highest payments.

Employee Annual and Sick Leave

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$18,000,000 $16,000,000 $14,000,000 $12,000,000 $10,000,000 $8,000,000 $6,000,000 $4,000,000 $2,000,000
$0

Exhibit 7 USG Employee Leave Costs
(Fiscal Years 2010-2011)
$16.5 $1.2
$12.41 $882,316

$11.5

$15.3

2010

ALP

FICA

2011

1Figure includes $17,453 in payments to the Employees Retirement System for retirees at two USG institutions. Source: University System of Georgia and Employees Retirement System records, and Social Security Administration policies

As shown in Exhibit 8, the majority of employees received an annual leave payment of less than $2,500 and the majority of payment costs are associated with payments under $10,000. Approximately 3,800 (57%) of the 6,700 total employees who received an annual leave payment received less than $2,500. Nearly 6,000 employees (90%) received payments of less than $10,000, which constituted $14.6 million of the $26.8 million in annual leave payments made during the 2010-2011 period. The approximately 700 employees receiving payments over $10,000 received $12.3 million.

Number of Employees

Total Leave Payments

Exhibit 8

Leave Payments to USG Employees by Payment Range

4,500

(Fiscal Years 2010-2011)

$6,000,000

4,000 3,500

3,821

$5.0 $5,000,000

3,000

$4.0

$4.1

$4.4

2,500

$3.4 2,000

$3.1 $2.9

1,500

1,109

1,000 500

664

364

363

168

166

0 $0-$2,500

$2,500-$5,000

$5,000-$7,500

$7,500-$10,000 $10,000-$15,000 $15,000-$20,000 Payment Range

Over $20,000

$4,000,000 $3,000,000 $2,000,000 $1,000,000 $0

Source: University System of Georgia records

Employee Annual and Sick Leave

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As shown in Exhibit 9, a large number of employees were at the low end of the annual leave balance range. Employees with 60 or fewer hours of annual leave accounted for approximately 41% of employees receiving leave payments while those with 180 or fewer hours represented nearly 60% of the total. Employees with 300 to 360 hours accounted for about 16% of the total. Expectedly, this group received a large portion of the annual leave payments at more than $12 million (47%) of the $26.8 million paid out.

Number of Employees

Amount of Leave Payments

Exhibit 9

USG Employees by Range of Leave Payment Hours

3,000

(Fiscal Years 2010-2011)

$14,000,000

2,744

$12.5

2,500

$12,000,000

2,000 1,500 1,000
500 0

$3.2 0-60

1,190
$2.3 60-120

Source: University System of Georgia records

779 473
$2.8 $2.7

120-180

180-240

Hours of Paid Leave

373 $2.8
240-300

$10,000,000

$8,000,000

1,035

$6,000,000 $4,000,000

$2,000,000

$0 300-360

State Liability for Compensated Absences
At the end of fiscal year 2010, Georgia had a compensated absences liability of $556.6 million. The liability, which is disclosed in the state's Comprehensive Annual Financial Report, represents the value of paid time off owed to state and USG employees and includes associated payments for FICA and health insurance. The liability increases as employees accrue leave and is reduced by employees' use of leave and/or receipt of termination payments. During fiscal year 2010, employees earned $259 million in compensated absences and used approximately $266 million.
The compensated absences liability primarily consists of accrued annual leave.5 Since Georgia does not pay employees for unused sick leave and absences are outside the control of the employer and employee, sick leave is not included in the liability.

5 The liability also includes any Fair Labor Standards Act (FLSA) comp time and Deferred Holiday Leave outstanding at the end of the fiscal year. FLSA comp time is granted to non-exempt employees who work more than 40 hours in a week, while Deferred Holiday Leave is granted to employees who work on a state holiday (e.g., correctional officers).

Employee Annual and Sick Leave

13

For employees that are primarily funded with federal or agency funds, do the payouts use the appropriate fund source?
Our review of a sample of state agencies and USG institutions revealed that annual leave payouts are largely consistent with the funding distribution for an employee's regular paycheck. However, we found a limited number of cases in which the agency or institution funded the annual leave payments with different funding sources and the changes in the distribution collectively resulted in a slightly higher use of state funds.

State Employees
The vast majority of records reviewed showed that state agencies are funding annual leave payments to terminating employees at a funding breakdown consistent with the employee's regular salary. When the funding sources of the payments did not match, there was generally a greater use of state funds for the annual leave payment, as shown in Exhibit 10. However, the basis for the funding breakdown differences was usually reasonable.

Exhibit 10 Comparison of Funding Sources of Employee Leave Payments
(Fiscal Year 2011)

Payment Type

State

Regular Salary

80%

Annual Leave

84%

Source: SAO PeopleSoft records

Federal 18% 13%

Other 2% 3%

We reviewed 4,823 employee labor records at five state agencies for consistent funding distribution between regular paychecks and annual leave payments. The agencies reviewed the Departments of Corrections, Juvenile Justice, Education, Natural Resources, and Behavioral Health and Developmental Disabilities each received several million dollars in federal funding and had a large number of annual leave payments during fiscal year 2011. Our review did not test agencies' compliance with U.S. OMB Circular A-87, which includes guidance for allocating costs associated with leave payments to federal grants and contracts. In addition, employer contributions to ERS were not reviewed as those payments are not tracked by fund source.
We found that the fund source distributions for paychecks and annual leave payments were consistent for 3,745 of 4,823 (78%) of employees reviewed. This consistency appeared to be the result of SAO's automated payroll system that contains each employee's compensation fund source distribution. This funding distribution is the basis of all paychecks for the employee, including the annual leave payments. While human resources staff have the option to override the payment automation, most payments occurred at the rate and funding distribution already set within the payroll system.
Most of the 1,078 employees who had instances in which the funding sources did not match can be placed into two categories:

Employee Annual and Sick Leave

14

Employee funding distribution changed during year The vast majority of inconsistent cases are the result of changes made to an employee's funding sources during the year. Our review compared the funding of an employee's total fiscal year 2011 regular salary payments to the funding of the employee's annual leave payment. Because annual leave payments frequently rely on the funding distribution in the payroll system, any changes made to the distribution earlier in the year would result in a mismatch in our analysis. For example, during the first three months of the fiscal year, the Department of Corrections used federal American Recovery and Reinvestment Act (ARRA) funds to pay salaries and make annual leave payments for many employees. When the funds expired on October 1, 2010, the fund sources for those positions reverted to original fund sources usually state. GDC accounted for 1,022 of the 1,078 inconsistent records and a significant portion of the fund source differences seen in Exhibit 10.

Cautious interpretation of federal requirements In 26 instances, the Department of Natural Resources (DNR) used only state funds for annual leave payments, while the employees' regular salary had been partially paid with federal grant funds. Most of these employees are listed as 100% state-funded in the payroll system; however, for regular salary payments, the agency adjusts the fund source for each employee (overriding this allocation) based on weekly timesheets.6 This method works well for making bi-weekly or monthly payments, but it not does facilitate the tracking of leave by fund source. When a federal inspector general review identified incorrect charges of comp time for employees working on multiple federal grants, the agency decided to discontinue charging the grants for comp time and annual leave payments for those employees.
University System of Georgia Employees
For the most part, annual leave payments are made using the same fund sources as those used to make regular salary payments. As shown in Exhibit 11, the payments are nearly proportional across fund sources, although there is a slight shift toward state fund sources for annual leave payments.

Exhibit 11 Comparison of Funding Sources of USG Employee Leave Payments
(Fiscal Year 2011)

Payment Type

State Funds

Regular Salary

74%

Annual Leave

78%

Source: University System of Georgia records

Sponsored Funds 16% 13%

Other Funds 10% 9%

We reviewed a sample of 12 USG institutions, including two research institutions, one regional university, three state universities, three state colleges, and three twoyear colleges. The selection was based on factors such as number of individuals employed by the institutions, number of employees who received an annual leave payment, and percentage of grant/contract funding the institution receives. For employees who received leave payments in fiscal year 2011, we compared fund

6 This is in contrast to the typical method of designating a position with a certain percentage from each fund source in the payroll system (e.g., 40% state funds, 40% federal grant A, 20% federal grant B).

Employee Annual and Sick Leave

15

sources used to make regular salary payments and annual leave payments to identify inconsistences in fund sources or proportions. In addition, our review did not test institutions' compliance with U.S. OMB Circular A-21, which includes guidance for allocating costs associated with leave payments to federal grants and contracts provided to educational institutions.

Of 1,331 employees with a leave payment record at 11 institutions, 83% (1,103) were paid using the same fund sources that were used to make the last regular salary payment. Only 7% (91) of employees had leave payments that were either 1) funded using the same fund sources as regular salary payments, but distributed differently or 2) made using different fund sources than those used for regular salary payments. We were unable to conduct the comparison of fund sources for the remaining 10% (137) of employees because they had no regular salary payment (or, in a few instances, no leave payment7) included in the data.

Officials representing several of the institutions where differences in fund sources were identified cited two primary reasons for the differences: 1) grant restrictions limit institutions' ability to make annual leave payments from grants normally used to pay an employee's salary, or 2) grant or other funds used to make regular salary payments were not of sufficient quantity to fund the annual leave payment. While institutions generally do not have written policies instructing departments on how annual leave payments should be made, there is an expectation that leave payments will be distributed similarly to regular salary payments. However, when circumstances require payments to be made differently, as described above, departments are still expected to cover annual leave payments within their normal operating budgets. In some cases, for grant-funded positions, departments may be able to fund leave payments with indirect cost recovery funds generated through grant activities. It should be noted that one other institution included in our sample, the Georgia Institute of Technology, indicated that leave payments are generally funded as part of the institutions' approved fringe benefit rate and, therefore, are not paid using the same fund sources used to make regular salary payments.

7 Some employees included in the data ultimately received no annual leave payment because they had both a positive and negative payment of equivalent amounts.

Employee Annual and Sick Leave

16

Is there a correlation between accumulated leave and salary level? Are employees with higher salaries more likely to have greater amounts of accumulated leave?
We found a correlation between leave balances and salaries of state agency and USG employees, as well as a stronger correlation between leave and another factor years of service. It is also likely that there are other factors that may be equally, or more, relevant to leave balances, such as age, gender, race, marital status, presence of dependents, varying positions/pay scales across agencies, or exempt vs. non-exempt positions.

For both the state agency and USG employee populations, we analyzed total leave balances (i.e., annual, sick, and forfeited) by salary quintile and years of service quintile. We also conducted a linear regression analysis to predict an employee's total leave balance based on salary level and years of service.

State Employees A correlation between salary and leave balances is present but is not particularly significant. As salary increased, the percentage of individuals with fewer than 500 hours steadily dropped and the percentage with more than 2,500 hours steadily increased (see Exhibit 12). The correlation is impacted by the fact that leave is not directly associated with salary but is instead earned over time. For example, a highly paid, newly hired director of accounting begins with no leave balance while a much lower paid accounting clerk employed by the state for many years could have a leave balance in excess of 1,000 hours. As shown in the exhibit, nearly 30% of those in the highest salary quartile have fewer than 500 hours of leave.

Years of service, which is more directly related to the opportunity to earn leave, has a more significant correlation to leave balances. Also shown in Exhibit 12, the percentage of each quintile with fewer than 500 hours drops significantly as years of service increase. Conversely, the percentage with at least 2,500 hours begins at zero

Exhibit 12 State Employee Leave Balances
By Quintile
(as of May 2011)

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

Lowest

Salary Quintile

Second 0-500

Middle

Fourth

2500 or More

Highest

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

Years of Service Quintile

Lowest

Second 0-500

Middle

Fourth

2500 or More

Highest

Note: The salary quintiles were below $26,310; $26,310-$31,250; $31,260-$39,030; $39,040-$52,510; and $52,520 and above. The years of service quintiles were below 3.49; 3.5-6.92; 6.94-12.75; 12.77-20.25; and above 20.27.
Source: SAO Human Capital Management System

Employee Annual and Sick Leave

17

for the lowest group and increases significantly for those with the most years of service. When compared to the salary, there are greater differences between the quintiles in the years of service analysis, illustrating a stronger correlation between the factors.

It should also be noted that salary and years of service are related, meaning that some of those individuals in the highest salary quintile have decades of state employment (which helps explain their leave balances). For example, those in the lowest salary group have a median of 4.0 years of service. This compares with 13.1 years of service for those in the middle salary quintile. Those in the highest salary quintile have slightly more years of service, at 13.4.

Finally, we determined each factor's expected impact on an employee's leave balance. Controlling for years of service, for every $1,000 increase in salary, an employee was expected to have an additional 6.1 hours of leave. When controlling for salary, an employee was expected to have an additional 78.8 hours of leave for each additional year of service.

University System of Georgia Employees Similar to state employees, our review found a correlation between USG employees' total leave balance and salary level. As salary increased, the percentage of individuals with fewer than 500 hours dropped and the percentage with more than 1,500 hours increased (see Exhibit 13). Very few employees in the first four quintiles have more than 1500 hours, but the percentage increased significantly for the highest quintile. However, even in the highest quintile, nearly half of the employees have fewer than 500 hours of leave. It should be noted that, when compared to state agency employees, USG employees generally have lower leave balances because some do not earn annual leave and those that do will lose, not forfeit, any over the maximum.

Exhibit 13 USG Employee Leave Balances
By Quintile
(as of June 2011)

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

Lowest

Salary Quintile

Second 0-500

Middle

Fourth

1500 or More

Highest

100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

Years of Service Quintile

Lowest

Second 0-500

Middle

Fourth

1500 or More

Highest

Note: The salary quintiles were below $27,782; $27,782-$36,712; $36,713-$49,160; $49,161-$76,173; and above $76,173. The years of service quintiles were 2.26 and below; 2.27-4.92; 4.93-9.33; 9.34-15.98; and 15.99 and above.

Source: University System of Georgia records

Employee Annual and Sick Leave

18

Years of service, which is more directly related to the opportunity to earn leave, has a slightly more significant correlation to leave balances. Also shown in Exhibit 13 and like salary, the percentage of each quintile with fewer than 500 hours drops as years of service increase and the percentage with at least 1,500 hours increases with years of service. The exhibit shows that no employee in the lowest three quintiles has 1,500 hours of leave, compared with a small percentage in the fourth quintile and nearly 30% of the highest quintile.

It should also be noted that salary and years of service are positively related, meaning that those in the higher salary quintiles often have more years of service. However, compared to state agency employees, the relationship is less obvious. Those in the lowest salary quintile have a median 4.6 years of service, compared to 6.7 years for those in the middle quintile, and 10.8 years for those in the highest salary group.

Finally, we determined each factor's expected impact on an employee's leave balance. Controlling for years of service, we found that for every $1,000 increase in salary, an employee was expected to have an additional 3.4 hours of leave. When controlling for salary, an employee was expected to have an additional 36.3 hours of leave for each additional year of service.

Employee Annual and Sick Leave

19

What is the common business practice in other state governments and in the private sector in terms of the amount of leave that can be accrued? What are the common practices in terms of applying accrued leave to retirement?

Comparing Leave
Leave is one of many components of employee compensation. Different employers may choose to allocate compensation differently across the categories. For example, an employer may provide higher wages and less generous health insurance or may provide lower wages and greater leave or health insurance benefits. For this reason, a comparison of leave policies without a consideration of other forms of compensation tells only a portion of the story. An adjustment in leave policies should consider the effect on the total compensation package and the effect on employee recruitment and retention.

State Employees
While Georgia's annual and sick leave practices are relatively similar to those of surrounding state governments, as expected, there are fewer similarities when comparing Georgia's practices to those in the private sector. Most notably, a substantial portion of private sector companies have a single Paid Time Off (PTO) leave category, instead of separate annual and sick leave accruals, making direct comparison more difficult. When separate accruals are granted, private sector companies' policies were frequently less generous to employees.
Our analysis compared Georgia's leave policies to those of the other employers in the following areas:
Annual Accrual Rate number of days of leave granted to employees each year. We also noted changes in the accrual rate based on years of service.
Carry-over of Unused Hours at End of Year whether the employer allows leave earned/granted in one year to be used in the next year.
Maximum Accrual the maximum number of hours that an employee may accrue. If carryover of leave is allowed, the maximum accrual may be higher than the annual accrual amount. We also noted the treatment of leave earned beyond the maximum, such as "use it or lose it," payment for unused leave, or conversion into another type of leave.
Termination Payments cash payments made to terminating employees for a balance of unused leave.

Application to Retirement whether the employer will apply unused leave toward employee retirement in the form of additional service credits or payments to a retirement plan.

Comparison to Other Southeastern States As shown in Exhibit 14, our review found that Georgia's state employees receive annual and sick leave benefits that are not uncommon when compared to those granted by six other southeastern states (Alabama, Florida, Mississippi, North Carolina, South Carolina, and Tennessee). In each aspect reviewed, there were states with policies that were more generous to employees and states with policies that were less generous. See Appendix D for a detailed listing of each state's policies.

Employee Annual and Sick Leave

20

Exhibit 14 Comparison of Georgia and Other Southeastern States' Leave Policies(1)

Annual Accrual Rate
Carryover at Year End

Georgia
< 5 Years: 15 days 5-9 Years: 18 days 10 Years: 21 days
Yes Subject to max accrual

Annual
Other States
Initial Annual Accrual -Range from 12 to 18 days -4 states below 15 days, 1 at 15, and 1
above
Maximum Annual Accrual -5 states range from 19.5 to 29.25 days
-1 state grants additional 1.25 days annually beginning year 11
-1 state below and 5 states above 21 days (generally require 15 to 20 years
to reach highest level)
Yes Subject to max accrual

Georgia
15 days per Year

Sick
Other States
Initial Annual Accrual -Range from 12 to 15 days -5 states below 15 days and 1 at
15
Future Annual Accrual -1 state reduces annual accrual over time, dropping to 7.5 days
by year 16

Yes Subject to max accrual

Yes Subject to max accrual

Maximum Accrual

45 days

-Range from 30 days to unlimited -3 states below, 1 equals, and 2 above
45 days

90 days

-4 states with no max -2 states above 90 days

Leave Accrued over
Maximum

Days above 45 convert to Forfeited Leave

Termination Payment

Yes Limited to maximum
accrual

-4 states convert to sick or emergency -1 state has "use it or lose it" policy -1 state has unlimited accrual
Yes -5 states subject to max accrual (1 state annually allows payout up to 3 days during employment but deducts the hours from max termination
payment calculation) -1 state without max accrual limits
payout to 30 days

Days above 90 convert to Forfeited Leave

-1 state has "use it or lose it" above the max
-1 state deposits excess leave in an emergency sick leave bank

5 states No

1 state Yes;

No

up to 25% of balance or 60 days

(whichever is less) for staff with

10+ years

Applied to Retirement

Yes Forfeited Leave can be
applied

3 states - Yes (2 because excess converts to sick)
3 states - No

Yes Forfeited Leave can be
applied

(1)Other states reviewed include Alabama, Florida, Mississippi, North Carolina, South Carolina, and Tennessee

Sources: Georgia State Personnel Board policies; policies from other states' personnel agencies.

5 states Yes 1 state No (state has termination payout)

Regarding annual leave, Georgia provides slightly more leave to new employees than four other states, but Georgia provides fewer leave days than five states for the more experienced employees. All states allow leave unused at the end of the year to be carried over, and all pay employees for unused annual leave upon termination. However, only two states have a maximum accrual of more than 360 hours, and one of those two limits the termination payout to 240 hours. Regarding retirement, Georgia and three other states allow unused annual leave to be applied to retirement, while three states do not.

As noted in the exhibit, Georgia's sick leave policies are similar to other states' in many respects. Most states have a single accrual rate regardless of years of service, and all allow carryover of unused leave at the end of the year. Four states have no maximum accrual, and the other two have maximums higher than Georgia's. However, those states provide no retirement benefit for leave over the maximum, while Georgia converts that leave to forfeited for potential use at retirement. Like Georgia, five states allow sick leave to be used toward retirement, and the one that does not pays out a portion of unused sick leave upon termination.

Employee Annual and Sick Leave

21

Comparing Public and Private Sectors
Differences in the types of jobs and sizes of organizations make comparisons of public sector and private sector compensation difficult.
According to the U.S. Bureau of Labor Statistics, manufacturing and sales make up a large part of private sector work activities, while professional and administrative support occupations are disproportionately represented in the state and local government. In addition, the public sector also has a significant number of employees in public safety positions, for which there is no comparable private sector employer.
Georgia also has a one-size-fits-all leave policy that covers virtually all non-USG employees. The State Personnel Administration policy applies to occupations ranging from administrative assistants to engineers, and from accountants to social workers. While companies employ individuals in various professional and support positions, an engineering firm is likely to design a leave policy to compete with other engineering firms. An accounting firm is likely to do the same. In some cases, private companies may have separate leave policies for different groups of employees, such as management and non-management.

Comparison to the Private Sector Georgia's annual and sick leave policies exhibit fewer similarities with the private sector. Some private companies have a single leave bank for Paid Time-Off (PTO), making direct comparisons more difficult. Companies with traditional, separate plans for annual and sick leave generally provide fewer days of leave, are less likely to allow leave to be carried over from one year to the next, and are less likely to provide a retirement benefit for unused leave. Like Georgia, companies frequently provide a payment for unused annual or PTO leave.
Our comparison of Georgia's leave policies to those in the private sector is based on information from the Society of Human Resources Management, the WorldatWork human resources association, and survey results from a sample of 13 Georgia companies who employ a significant number of personnel with duties similar to certain state employees.8
Society of Human Resources Management SHRM's 2011 Employee Benefits report documents the prevalence of certain leave policies in U.S. organizations. SHRM found that nearly half of the organizations (48%) provide a single, PTO leave balance, compared to 44% with vacation leave and 37% with sick leave policies. SHRM also found that about one-sixth of the organizations with a PTO or vacation leave have a cash out policy, essentially purchasing at least a portion of unused leave from employees at the end of the year. About 6% of companies with a sick leave policy had the same practice.
The SHRM study included 600 organizations, with 66% private forprofit, 25% non-profit, and 9% government. Of the responding organizations, 66% had fewer than 500 employees, and 17% had more than 2,500 employees.

WorldatWork
WorldatWork's Paid Time Off Programs and Practices report from May 2010 includes more detailed information on organizations' leave plans. Again, a single PTO balance was not uncommon (40%) among the respondents. Traditional plans with separate vacation and sick balances were the norm at 54% of organizations, but the percentage has dropped from 71% in 2002. Traditional plans were most popular with those organizations with more than 20,000 employees.

Compared to Georgia policy, organizations with traditional plans grant fewer days to employees and provide less opportunity to carry leave into the next year. The median responses for vacation leave were 10 days for a new employee, 15 days at year 10, and 20 days at year 20. Sick leave accruals were 6, 10, and 10 days at the same intervals. About two-thirds of companies allow vacation leave to be carried over to

8 The State Personnel Administration identified several occupations with both a large number of state employees and comparable positions in the private sector, including accounting, engineering, information technology, law, and nursing. We also included facility maintenance. We then asked pertinent state agencies to identify companies that were either a competitor for employees or a contractor conducting similar work in Georgia. Finally, we contacted 22 companies and received responses from 13.

Employee Annual and Sick Leave

22

the next year, and just over half allow sick leave to be carried over. However, like Georgia, an employee is paid for unused vacation leave by 91% of companies upon separation.

It should also be noted that Georgia provides 12 paid holidays each year, while responding organizations with traditional leave plans provide an average of 9 holidays. However, these organizations also provide an additional 2 to 3 personal days (median), depending on the employee's length of service.

The WorldatWork study included 1,036 responses from U.S. organizations. The report methodology does not describe the extent to which respondents represented public vs. private sector entities, but the report notes that respondents are "similar to the WorldatWork membership as a whole" and that the typical member works at "the managerial level or higher in a headquarters of a large company in North America." Of the total respondents, 23% worked in an organization with more than 10,000 employees, while 30% worked in organizations with fewer than 1,000.

DOAA Survey As shown in Exhibit 15 on the following page, our survey of 13 private companies found that Georgia leave policies frequently provide greater benefits to employees than companies' policies. The survey also showed variation between the companies, which may be attributable to the different industries in which they operate or simply the result of a company's decision to distribute personnel costs between leave and other forms of compensation differently than its competitors. For example, seven of the companies have a single PTO leave bank while six grant separate vacation and leave balances. See Appendix E for a detailed list of company policies.

For the six companies with traditional annual/vacation leave policies, these policies are often less generous than those for state employees. Only one company provides new employees with more than 15 days of leave, while two companies provide experienced staff with more than Georgia's 21 vacation days per year (staff must work 20 years to exceed the state employee rate). However, only three companies allow leave to be carried over at the end of the year, while the other three employ a "use it or lose it" policy. Two of the six companies that allow hours to be carried over have a maximum accrual limit significantly lower than Georgia's 45 days. Five companies pay employees for unused leave upon termination. Finally, given companies' policies regarding leave balances and termination payments, there is no retirement benefit associated with annual leave accrual.

The six companies with traditional vacation policies also grant their employees sick leave. Three companies do not grant a set number of hours for sick leave; instead, these companies allow employees to take sick leave as needed, with disproportionate absences considered like other aspects of job performance. The other three companies had varying accrual rates but generally provided less carryover of leave. While one company grants 20 days per year and a second company grants 14 days for experienced staff, neither allows unused leave to carry over to the following year. The third company grants 8.8 days per year but does allow carry-over and a maximum accrual of 108 days. For the three companies, there is no retirement benefit associated with sick leave, payment for unused leave at termination, or a value for leave earned over the maximum accrual.

Employee Annual and Sick Leave

23

Exhibit 15 Comparison of Georgia and 13 Private Sector Companies' Leave Policies

Annual Accrual Rate

Annual/Vacation

Georgia

Six Private Sector Companies

< 5 Years: 15 days

Initial Annual Accrual -Range from 0 to 21 days -2 companies below and 3
at 15 days -1 company at 21 days

5-9 Years: 18 days 10 Years: 21

Maximum Annual Accrual
-Range from 14 to 27 days
-4 companies below and 2 above 21 days (requires 20 years to reach more
than 21 days)

Georgia
15 days

Sick
Six Private Sector Companies

Single Paid Time Off Bank
Seven Private Sector Companies

-3 allow sick leave as needed
-3 grant set number of days
-Range from 0 to 20 days, with one above 15
days

Initial Annual Accrual -Range from 15 to 22
days
Maximum Annual Accrual
-Range from 25 to 32 days

Carryover at Year End

Yes Subject to max
accrual

Maximum Carryover

45 Days

3 companies Yes 3 companies No
1 company 20 days 1 company 21 days 1 company 45 days
3 companies no carryover

Yes Subject to max
accrual
90 Days

1 company Yes 5 companies No
1 company 108 days 5 companies no carryover

6 companies Yes 1 companies No
(but converts to emergency leave)
4 companies Range of 5 to 70 days
(2 between 5 & 15 days; 2 between 50 and 70 days)
2 companies Based on annual accrual rate (2 or 4 times rate)

Leave Accrued over
Maximum

Days above 45 convert to Forfeited
Leave

6 companies - No

Days above 90 convert to Forfeited Leave

6 companies No

1 company no carryover
6 No 1 Yes, paid for days over 4x annual accrual

Termination Payment

Yes Limited to maximum
accrual

5 companies Yes 1 company No

No

6 companies No

6 Yes, all accrued days 1 Yes, up to 10 days

Applied to Retirement

Yes Forfeited Leave can
be applied

6 companies No

Yes Forfeited Leave can be applied

6 companies No

5 No 1 Termination payment will have a 401(k) match
1 Paid for up to 30 days carried over leave

Sources: Georgia State Personnel Board policies; interviews with human resources officials in private sector companies
(1) We received responses from 13 private sector companies. Seven provide employees with Paid Time Office leave instead of separate annual (or vacation) and sick leave.
As noted earlier, it is difficult to draw a direct comparison between Georgia's sick and annual leave policies and the single PTO policy of the seven companies contacted. The companies initially grant three to just over four weeks of leave, with the rate increasing over time. Six companies allow PTO to carry over to the next year, though the maximum amount that can be carried over varies significantly between companies. The other company allows unused PTO to be converted to emergency leave that can be cashed in upon retirement. All seven companies pay employees for any unused PTO upon termination. Additionally, one company will pay employees for up to five accrued days per year and another pays employees for any accrual over the maximum. Retirement benefits related to PTO are not common and are limited to the one company paying for up to 30 days of PTO converted to

Employee Annual and Sick Leave

24

emergency leave and another providing an employer 401(k) match against a payment for unused PTO.

University System of Georgia Employees
Similar to our analysis of state employees, we compared USG's annual and sick leave policies to those offered at 11 institutions (including one private institution) previously identified by the university system's central office as comparable. As noted earlier, leave benefits to USG employees vary depending on the type of employee (e.g., regular, faculty, and administrative officers). Comparable institutions make similar distinctions between employees. As a result, our analysis focused on policies relating to annual and sick leave accrual rates and maximums, carry-over of unused hours, termination payments, and unused leave at retirement for the various employee types within USG and comparable institutions.

It should be noted that some comparable institutions offer different leave benefits for certain other groups of employees, such as communications workers, electricians, engineers, and campus law enforcement officers. These benefits result from negotiations between the institutions and specific labor unions through collective bargaining processes. Because leave benefits for all USG employees are determined by a single policy of the Board of Regents, benefits to employees of comparable institutions provided through collective agreements are not included in our analysis except in cases where regular employees, faculty, and administrative officers are included in a bargaining unit.

Regular Employees USG defines regular employees as exempt professional and administrative employees (who are not faculty or graduate assistants) and all non-exempt employees. Our review found that annual and sick leave benefits granted to USG regular employees are in line with those granted to similar types of employees at comparable institutions, as shown in Exhibit 16. In each aspect reviewed, some institutions have policies that are more generous to employees, while others have policies that are less generous. See Appendix F for a detailed listing of policies governing each institution.

Similar to USG, most institutions grant annual leave according to employees' years of service. We found that USG provides more days of leave in the first few years of employment than eight of 11 comparable institutions, but USG provides fewer leave days than seven institutions for employees with greater years of service. All institutions allow leave unused at the end of the year to be carried over, and all pay employees for unused annual leave upon termination. Two institutions allow all employees to accrue more than 45 days (360 hours) while another two allow only employees with more years of service to accrue more than 45 days. Regarding retirement, three institutions allow unused annual leave to be applied to retirement, while eight institutions do not.

Employee Annual and Sick Leave

25

Annual Accrual Rate
Carryover at Year End

Exhibit 16 Comparison of USG and Other Comparable Institutions'
Leave Policies for Regular Employees

Annual

Sick

USG Institutions
< 6 Years: 15 days 6-10 Years: 18 days 11 Years: 21 days

Comparable Institutions
Initial Annual Accrual -Range from 10 to 24 days -8 schools below 15 days, 1 at 15, 2
above 15
Maximum Annual Accrual -Range from 19 to 27 days -1 schools below 21 days, 3 at 21, 7
above 21

USG Institutions
12 days

Comparable Institutions
Initial Accrual -Range from 10 to 15 days -1 school below 12 days, 7 at 12, 3
above 12
Maximum Annual Accrual -Range from 10 to 24 days -1 school below 12 days, 6 at 12, 4
above 12

Yes Subject to max accrual

11 schools - Yes

Yes

11 schools Yes

Maximum Carryover

45 days

-Range from 15 days to unlimited -7 schools below 45 days, 4 above 45

Unlimited

-Range from 45 days to unlimited -6 schools unlimited, 5 schools from 45 to 132 days

Leave Accrued over
Maximum

"Use it or lose it"

-8 schools have "use it or lose it" policy -2 schools convert to sick
-1 school has unlimited accrual

N/A

-4 schools have "use it or lose it policy"
-1 school converts to annual -6 schools have unlimited accrual

Termination Payment

Yes Subject to maximum
accrual

11 schools Yes (with max ranging from 10 to 64 days)

No

4 schools Yes 7 schools - No

Applied to

Retirement

No

3 schools Yes 8 schools - No

Yes With 60 days minimum

5 schools Yes 6 schools No

Sources: Board of Regents and Teacher's Retirement System policies and other post-secondary institutions' leave and related retirement systems' policies.

As shown in the exhibit above, Georgia's sick leave policies are very similar to the policies of other institutions we reviewed in most respects. Like USG, nine institutions have a single accrual rate regardless of years of service, and all 11 institutions allow carryover of unused leave at the end of the year. In addition, six institutions have no maximum accrual, similar to USG. Of the five institutions with maximum accruals, four have a use it or lose it policy above the maximum. Four institutions pay a portion of unused sick leave upon retirement or death. USG and five other institutions allow sick leave to be used toward retirement.

Faculty Most instructional personnel within USG are classified as faculty. This includes employees in such positions as professor, instructor, lecturer, and other teaching personnel (excluding persons holding adjunct positions and honorary titles). Based on our comparison of leave policies, academic year personnel generally do not accrue annual leave at USG and comparable institutions, but do accrue sick leave and, in some instances, are granted paid personal days or faculty leave days (e.g., days when campus is closed). When comparing leave benefits granted to 12-month faculty and similar types of employees at comparable institutions, we found that USG is more generous in aspects related to annual leave and equally or more generous with sick

Employee Annual and Sick Leave

26

leave than most other institutions, as shown in Exhibit 17. See Appendix F for a detailed description of the benefits available to both 12-month and academic year faculty.

Annual Accrual Rate
Carryover at Year End

Exhibit 17

Comparison of USG and Other Comparable Institutions'

Leave Policies for Faculty

Annual

Sick

(12-Month Faculty Only)

(12-Month and Academic Year Faculty)

USG Institutions
21 days
Yes, subject to max accrual

Comparable Institutions
Initial Annual Accrual -8 schools grant no annual leave days
-3 grant set number of days -Range from 21 to 24 days
(1 at 21, 2 above 21)
2 schools Yes 1 school No 8 schools N/A

USG Institutions
12 days Yes

Comparable Institutions
Initial Annual Accrual -1 school allows sick leave as needed
-1 school grants no sick leave days -9 schools grant set number of days
-Range from 8 to 66 days (2 schools below 12 days, 4 at 12, 3
above 12)
Maximum Annual Accrual --Range from 10 to 66 days -3 schools below 12 days, 3 at 12, 3
above 12
7 schools Yes 2 schools No 2 schools N/A

Maximum Carryover

45 days

-Range from 40 to 60 days -1 school below 45 days, 1 above 45
-1 school with no carryover - 8 schools with no leave accrual

Unlimited

-Range from 66 days to unlimited -4 schools unlimited
-3 schools from 66 to 132 days -4 have no carryover allowance or no
accrual of sick leave

Leave Accrued over
Maximum

"Use it or lose it"

-1 school converts to sick -1 school with "use it or lose it" policy
-1 school with no carryover -8 schools with no leave accrual

-4 schools unlimited

-1 school deposits into an emergency

N/A

sick leave bank -2 schools have "use it or lose it"

-4 schools have no carryover or no

accrual of sick leave

Termination

Yes,

3 schools Yes

Payment

subject to maximum accrual

(with max ranging from 21 to 55 days) 8 schools N/A

No

3 schools Yes 6 schools No 2 schools N/A

Applied to

Retirement

No

1 school Yes 2 schools No 8 schools N/A

Yes, with 60 days minimum

2 schools Yes 7 schools No 2 school N/A

Sources: Board of Regents and Teacher's Retirement System policies and other post-secondary institutions' leave and related retirement systems' policies.

While USG and three other institutions allow full-time faculty to accrue annual leave, eight institutions do not. However, these institutions make other forms of leave available to provide faculty paid or unpaid time off, such as holidays and personal days. Of the institutions that grant annual leave, USG and two others allow faculty members to carryover unused leave at the end of the year. Like USG, one institution has a "use it or lose it policy" for any hours accrued over the maximum; the other institution allows unused annual leave to be converted to sick leave. All three comparable institutions pay employees for unused annual leave upon termination. In addition, USG and two other institutions do not allow faculty members to apply unused annual leave to retirement, while one does.

Employee Annual and Sick Leave

27

Of the nine institutions that allow faculty members to accrue sick leave, seven grant as many as or more days than USG. Of the nine institutions, seven allow faculty members to carryover unused hours at the end of the year, including four with unlimited accrual like USG. Three of the institutions have a maximum carryover, but one allows accruals above the maximum to be deposited into a sick leave bank for emergency use or use upon rehire. Of the nine institutions, three pay a portion of unused sick leave upon retirement or death, while six others do not.

Administrative Officers Faculty members holding certain administrative positions within USG (e.g., president, administrative and academic deans, registrar, librarian, and chief fiscal officer) are also entitled to paid time off benefits. Referred to as administrative officers, these individuals enjoy the same leave benefits as full-time faculty. However, many other institutions in our review assign a different benefit level to these employees. As shown in Exhibit 18, our comparison of leave benefits granted USG administrative officers and similar employees at comparable institutions found that USG leave benefits are generally consistent with comparable institutions in most

Exhibit 18 Comparison of USG and Other Comparable Institutions'
Leave Policies for Administrative Officers

Annual Accrual Rate

USG Institutions

Annual Comparable Institutions

USG Institutions

21 days

Initial Annual Accrual: -Range from 12 to 24 days -5 schools below 21 days, 1 at 21 days, 5
above 21 days
Maximum Annual Accrual: -Range from 20 to 31 days -2 schools under 21, 2 at 21, 7 above 21

12 days

Carryover at

Yes

Year End

Subject to max accrual

9 schools Yes 2 schools No

Yes

Sick
Comparable Institutions
Initial Annual Accrual -Range from 8 to 66 days -1 school below 12, 4 at 12 days, 4
above 12
Maximum Annual Accrual -Range from 10 to 66 days -1 school below 12, 4 at 12, 5 above
12
-2 schools provide leave on an as needed basis up to a maximum amount
7 schools Yes 2 schools No 2 schools N/A

Maximum Carryover

45 days

-Range from 15 days to unlimited -5 schools under 45 days, 4 above 45, 2
schools have no carryover

Unlimited

-Range from 66 days to unlimited -4 schools with unlimited accrual -3 schools range from 66 to 132
days -4 schools with no carryover allowance or no accrual of sick leave

Leave Accrued over
Maximum

"Use it or lose it"

-5 schools have "use it or lose it" policy -3 schools convert to sick
-1 school has unlimited accrual -2 schools have no carryover

2 schools have "use it or lose it"

policy

N/A

1 school Deposited into emergency

sick leave

8 schools N/A

Termination

Payment

Yes

10 schools Yes 1 school No

3 schools Yes

No

6 schools No

2 schools N/A

Applied to

Retirement

No

3 schools Yes 8 schools No

Yes With 60 days minimum

2 schools Yes 7 schools No 2 schools N/A

Sources: Board of Regents and Teacher's Retirement System policies and other post-secondary institutions' leave and related retirement systems' policies.

Employee Annual and Sick Leave

28

aspects reviewed, although more or less generous in certain aspects. See Appendix F for a detailed description of the benefits available to administrative officers.

Compared to USG, five other institutions grant newer administrative officers fewer annual leave days than USG, while five grant employees more days. However, for more employees with more years of service, USG grants fewer days than seven other institutions. Like USG, nine of the comparable institutions allow employees to carryover unused annual leave at the end of the year. However, most limit the number of carryover days to less than 45. Five institutions have instituted a "use it or lose it" policy for leave accrued above the maximum, similar to USG. Regarding payments, USG and 10 other institutions pay employees for unused annual leave at termination. Three institutions allow employees to apply the payments toward retirement.

Regarding sick leave, all 11 comparable institutions grant sick leave days to administrative officers, including four institutions that initially grant employees more days than USG and five institutions that grant as many or fewer days than USG. Two other institutions grant employees sick leave on an as-needed basis. Of the nine institutions where employees accrue sick leave, seven allow employees to carryover unused sick leave hours at the end of the year, while two do not. Of the seven that allow carryovers, four have unlimited accruals and one allows leave accrued above the maximum to be deposited into a sick leave bank for emergency use. Unlike USG, three institutions pay employees for a portion of unused sick leave. In addition, employees at two institutions may apply unused leave toward retirement.

Employee Annual and Sick Leave

29

Appendix A Objectives, Scope, and Methodology

This special examination was requested by the Senate Appropriations Committee. The purpose of the examination was to answer the following questions regarding the annual and sick leave policies that cover state employees and University System of Georgia (USG) employees:
Under what circumstances does the state pay out accrued sick or annual leave? Who receives these payments?
Other than the time taken for illness or vacation, how much does the state pay out yearly in annual and sick leave? For employees primarily funded with federal or agency funds, do payouts use the appropriate fund source?
Is there a correlation between accumulated leave and salary level? Are employees with higher salaries more likely to have greater amounts of accumulated leave?
What is the common business practice in other state governments and in the private sector in terms of the amount of leave that can be accrued? What are the common practices in terms of applying accrued leave to retirement?
An analysis of sick and annual leave policies related to K-12 teachers was not included in our review due to the variation in leave policies among the state's 181 school districts.
Generally our evaluation methodology included researching and reviewing applicable state laws and policies; interviewing key staff with the State Personnel Administration, University System of Georgia, Employees Retirement System and Teachers Retirement System; obtaining and analyzing employee leave balance and payment data from the State Accounting Office, USG Shared Services Center and research institutions; reviewing literature from human resource management associations; and researching leave policies of other states, private sector entities, and comparable colleges and universities.
This project was not conducted in accordance with generally accepted government auditing standards (GAGAS); however, it was conducted in accordance with Performance Audit Division policies and procedures for non-GAGAS engagements. These policies and procedures require that we plan and perform the project to obtain sufficient, appropriated evidence to provide a reasonable basis for our conclusions based on our objectives.
Yearly Payments for Sick and Annual Leave
State Employees To determine the amount paid out each year in annual and sick leave for state employees, we obtained a data extract of all state employees who received a termination payment between fiscal years 2008 and 2011 from SAO's PeopleSoft Payroll system.9 All judicial, legislative, and executive branch agencies were represented in the data, with the exception of the Department of Family & Child Services (DFCS) and several small state authorities (e.g., Jekyll Island Authority). Payments made for FLSA compensatory and deferred holiday leave were excluded from the data because payments for these leave types were not necessarily made to terminating employees.
We obtained a separate extract of 2,598 DFCS employees who received termination payments over the same four-year period. Due to inconsistencies in reporting, we were unable to determine the type of leave the employee was paid for (e.g., unused annual, FLSA comp-time). We used a sample of terminated

9 Termination payments include payments for unused annual leave, FLSA compensatory leave, and deferred holiday leave at the time an employee terminates employment.

Employee Annual and Sick Leave

30

employees to estimate payments associated with unused annual leave. Using a web-based random sample calculator to determine our sample size of 360 employees, we used another web-based tool generate a statistically valid random sample of terminated employees (covering all 17 DFCS regions). We then supplied a list of employees in our sample to each respective region to verify the type of leave and number of hours associated with payments made to the employees. Based on our sample, we determined that approximately 2% of payments made to terminated employees were for leave types other than annual leave. As a result, we reduced payments for all 2,598 terminated DFCS employees by 2% to estimate payments for unused annual leave.

We then calculated or obtained additional payments made by state agencies in association with the annual leave payment. These payments included the following:
FICA payments: We calculated state agencies' share of FICA payments based on each employee's annual leave payment amount and the 1) health insurance (HI) portion of FICA at 1.45% and 2) Old Age Survivor's & Disability Insurance (OASDI) portion at 6.2%. Because employers are not required to pay more than $6,621 total annually for the OASDI portion of FICA, we calculated the amount of OASDI paid by state agencies up to each employee's termination date and excluded any OASDI payments on annual leave payments if the maximum had already been reached.
State Health Benefit Plan payments: We calculated state agencies' share of State Health Benefit Plan premiums based on each employee's annual leave payment amount and the employer rate in effect at the time the employee terminated state employment, which ranged from 0.0% 25.586% in fiscal years 2008 to 2011.
Employees Retirement System payments: From ERS, we obtained a data extract of payments made by state agencies on behalf of employees who retired from fiscal years 2008 to 2011.

USG Employees We obtained data extracts from USG's Shared Services Center (for 32 of 35 USG institutions) and three research institutions of employees who received an annual leave payment in fiscal years 2010 and 2011. (For earlier years, information was only available from each of the 35 institutions.) We calculated each employee's annual leave payment based on the number of unused annual leave hours and hourly rate of pay.
FICA payments: We calculated USG institutions' share of FICA payments based on each employee's annual leave payment amount and the 1.45% HI and 6.2% OASDI.
Employees Retirement System payments: From ERS, we obtained a data extract of payments made to the ERS by USG on behalf of employees who retired from fiscal years 2008 to 2011.

Fund Sources for Annual Leave Payments
State Employees To determine if state agencies used the appropriate fund sources for annual leave payments, we extracted data from PeopleSoft's Labor Distribution Module. We reviewed 4,823 employee labor records at five state agencies for consistent funding distribution between regular salary and annual leave payments in fiscal year 2011. Our analysis was based on five agencies the Departments of Corrections, Juvenile Justice, Education, Natural Resources, and Behavioral Health and Developmental Disabilities that received several million dollars in federal funding and had a large number of annual leave payments during fiscal year 2011. Employer contributions to ERS were not included in our analysis because those payments are not tracked by fund source. For the 4,823 employees, we reviewed 53,436 regular salary and annual leave payments records. We compared the fund source codes of each annual leave payment made in fiscal year 2011 to fund source codes for the sum of all regular salary payments made during the same

Employee Annual and Sick Leave

31

period. Where funding inconsistencies were identified, we analyzed the inconsistencies on a case-bycase basis and contacted state agency payroll staff to determine the causes for the inconsistencies. We also reviewed business process rules established by the State Accounting Office for the PeopleSoft payroll system.

USG Employees We identified a sample of 12 USG institutions to assess fund sources used to make regular salary and annual leave payments.10 Institutions were selected based on such factors as number of annual leave payments made in fiscal year 2011 and amount of grant and contract funding. For 11 institutions in our sample, we obtained a data extract containing annual leave payments and regular salary payments by fund source for approximately 2,200 employees who received an annual leave payment in fiscal year 2011. One other institution was unable to provide annual leave payments by fund source because leave payments are generally made from a single vacation pay pool, which is funded as part of the institution's fringe benefit rate.

We based our analysis on the final salary payment made to terminating employees. For both salary and annual leave, we calculated the percentage of the payment attributed to each fund source, compared their funding distributions, and noted discrepancies in the way payments were funded. We contacted USG institutions to identify the causes for any discrepancies.

Correlation between Accumulated Leave and Salary Level
State Employees To determine whether there is a correlation between accumulated leave and salary level, we obtained leave balance, hire date, and salary information for approximately 53,000 employees in SAO's PeopleSoft Payroll system as of May 2011. We combined each employee's annual, sick and forfeited leave balances to calculate the total amount of unused leave for each employee. Of the 53,000 employees, we identified approximately 12,000 employees who did not have reliable hire dates due to hire dates and service dates that did not match in the PeopleSoft system. Of the approximately 41,000 employees with reliable hire dates, we used the hire date to calculate the years of service with the state. DFCS was excluded from the analysis because we were unable to identify forfeited leave balances for the approximately 5,800 employees.

To identify a correlation, we categorized each employee into salary and years of service quintiles. Using Excel, we grouped employees in each quintile by their total leave balance and determined the percentage of employees in each category. We also conducted a multivariate regression analysis using total leave, salary, and years of service. The R Square (the proportion of variance in one variable that can be explained by another variable) was .4206, while the regression coefficients (representing the rate of change in leave hours as a function of changes in salary) were 6.1033 for salary and 78.7985 for years of service.

USG Employees From USG's Shared Services Center and three research institutions, we obtained leave balance data, annual salary, and years of service for all current employees as of June 2011. We combined each employee's annual and sick leave balances to calculate the total amount of unused leave for each employee.11 Of the 42,000 employees, we excluded approximately 7,500 employees for whom we could

10 Institutions reviewed include Georgia Institute of Technology, University of Georgia, Georgia Southern University, Kennesaw State University, University of West Georgia, Fort Valley State University, Macon State College, Dalton State College, Georgia Perimeter College, Darton College, and Atlanta Metropolitan College.
11 We did not obtain forfeited leave balances for USG employees. Any accrued annual leave above the 45-day maximum lapses on December 31st each year and the lapsed leave has no future value. Unused sick leave is forfeited upon termination. If the employee returns to USG service, the forfeited leave can be used to obtain additional service credits at retirement.

Employee Annual and Sick Leave

32

not obtain a hire date. For the remaining 34,500 employees, we used the same steps noted above for state employees to categorize the employees into salary and years of service quintiles. We also conducted a multivariate regression analysis (based on total leave, salary, and years of service) that resulted in an R Square of .4423 with regression coefficients of 3.3563 for salary and 36.3396 for years of service.

Common Business Practices in State Governments and Private Sector
State Employees To identify common business practices in state governments, we reviewed policies and contacted representatives of state personnel agencies in Alabama, Florida, Mississippi, North Carolina, South Carolina, and Tennessee).
To identify common business practices in the private sector, the State Personnel Administration identified several occupations with both a large number of state employees and comparable positions in the private sector, including accounting, engineering, information technology, law, and nursing. We also included facility maintenance. We then asked pertinent state agencies to identify companies that were either a competitor for employees or a contractor conducting similar work in Georgia. Finally, we contacted 22 companies about factors related to leave and received responses from 13.
USG Employees Using 11 institutions included in the analysis of fund sources, we obtained a listing of institutions that USG had previously identified as comparable.12 We focused our analysis on employee types defined in Board of Regents policy classified, faculty, and administrative officers. We researched each institution's policies related to leave and retirement for the selected employee types. In instances where classified employees, faculty, or administrative officers were included in a collective bargaining unit, we reviewed the associated agreements for provisions related to leave.
Comparable institutions included in the analysis were California Institute of Technology (Georgia Institute of Technology), University of Florida (Georgia Institute of Technology, University of Georgia), James Madison University (Georgia Southern University), California State University Fullerton (Kennesaw State University), Bridgewater State College (University of West Georgia), Nicholls State University (Fort Valley State University), Colorado Mesa University (Macon State College), Pennsylvania State University Altoona (Dalton State College), Collin County Community College District (Georgia Perimeter College), Ivy Tech Community College (Darton College), and Inver Hills Community College (Atlanta Metropolitan College).

12 One institution included in the sample was excluded from the analysis because USG has not identified a set of comparable peer institutions.

Employee Annual and Sick Leave

33

Agency
1 Dept. of Human Services1 2
2 Dept. of Corrections 3 Dept. of Transportation 4 Dept. of Juvenile Justice 5 Dept. of Behavioral Hlth & Dev Disb1 6 Dept. of Labor 7 Dept. of Natural Resources 8 Dept. of Public Safety 9 Georgia Technology Authority 10 Dept. of Education 11 Dept. of Community Health 12 Dept. of Revenue 13 Georgia Bureau of Investigation 14 Public Defender Standards 15 Prosecuting Attorneys 16 Dept. of Driver Services 17 State Board Pardons & Paroles 18 Dept. of Agriculture 19 Georgia Forestry Commission 20 Office of Planning and Budget 21 Secretary of State 22 George L. Smith II - GWCCA 23 Dept. of Audits & Accounts 24 Georgia Public Broadcasting 25 Dept. of Defense 26 Dept. of Admin. Services 27 Superior Courts of Georgia 28 Dept. of Economic Development 29 Dept. of Community Affairs 30 Office of Comm. of Insurance 31 West Georgia Tech College1 32 Tech College System of GA 33 Chattahoochee Tech College1 34 Savannah Tech College 35 General Assembly of Georgia 36 State Personnel Administration 37 Dept. of Banking & Finance 38 Admin. Office of the Courts 39 Columbus Tech College 40 Georgia Correctional Industries 41 Court of Appeals 42 DeKalb Tech College 43 Georgia Building Authority 44 Teachers Retirement Sys. 45 Middle Georgia Tech College 46 Atlanta Tech College 47 Southern Crescent Tech College1 48 Gw innett Tech College 49 North Tech College 50 Athens Tech College 51 State Board of Workers' Comp

Appendix B Annual Leave Payments Per Agency
Fiscal Years 2008-2011

ALP $18,760,704

SHBP $3,599,325

FICA $1,416,461

ERS

Total ALP Terminations ERS Retirees

$3,515,860 $27,292,351

6,903

836

$17,554,924 $3,681,308 $1,340,730 $3,112,476 $25,689,438

8,315

665

$5,137,370 $1,055,340

$388,125 $3,214,951 $9,795,786

1,778

466

$6,301,994 $1,334,322

$480,463

$714,838 $8,831,617

3,194

158

$5,825,300 $1,369,416

$436,508

$832,650 $8,463,874

2,875

204

$4,928,187 $1,026,298

$374,549 $1,343,408 $7,672,442

1,537

290

$3,391,958

$690,954

$257,082 $1,479,440 $5,819,434

841

160

$2,342,890

$489,944

$178,277 $1,391,827 $4,402,939

465

138

$3,001,180

$359,830

$227,636

$518,982 $4,107,628

396

78

$2,469,020

$509,800

$183,139

$159,317 $3,321,277

508

36

$2,147,578

$474,405

$155,882

$304,756 $3,082,621

449

54

$2,038,269

$347,787

$154,605

$338,423 $2,879,084

468

64

$1,480,949

$277,196

$109,196

$720,970 $2,588,311

259

63

$1,513,454

$316,110

$112,801

$25,271 $1,967,636

400

6

$1,320,731

$250,790

$99,450

$263,457 $1,934,428

211

25

$1,176,401

$245,037

$89,763

$274,761 $1,785,961

363

55

$1,002,015 $968,224

$220,758 $204,147

$76,654 $74,069

$319,746 $346,534

$1,619,173 $1,592,974

207

49

309

72

$894,972

$189,014

$68,465

$437,917 $1,590,368

228

77

$1,105,196

$238,662

$82,386

$59,323 $1,485,567

249

10

$959,938

$203,482

$72,332

$121,202 $1,356,954

248

25

$783,063

$153,711

$57,998

$229,844 $1,224,617

362

19

$713,698

$144,606

$53,077

$128,579 $1,039,960

148

14

$657,733

$108,070

$50,317

$182,886

$999,006

121

23

$628,828

$135,537

$48,105

$91,854

$904,325

339

15

$586,093

$120,637

$44,384

$101,322

$852,435

144

15

$606,313

$136,008

$45,825

$43,047

$831,193

164

11

$566,083

$123,248

$42,552

$77,702

$809,585

108

13

$532,139

$117,518

$40,709

$84,120

$774,485

121

11

$497,991

$112,287

$38,096

$88,193

$736,567

104

18

$518,199

$111,959

$38,747

$13,476

$682,381

171

2

$495,792

$101,278

$35,778

$48,073

$680,921

93

8

$499,503

$110,166

$37,914

$3,004

$650,587

134

1

$491,421

$109,725

$34,857

$1,768

$637,770

146

1

$456,753

$91,649

$33,332

$28,141

$609,874

100

6

$415,806

$90,836

$29,437

$60,047

$596,126

80

10

$343,105

$71,925

$24,967

$115,314

$555,311

47

12

$323,559

$47,702

$24,631

$110,271

$506,162

61

8

$341,764

$77,667

$25,577

$12,546

$457,553

94

2

$265,400

$52,668

$20,303

$117,904

$456,275

63

23

$278,270

$60,627

$18,730

$91,030

$448,657

34

8

$335,384

$72,189

$24,622

$15,979

$448,174

69

3

$279,577

$64,722

$21,388

$79,270

$444,957

68

15

$298,873

$60,190

$19,457

$51,107

$429,626

46

4

$330,513

$73,774

$25,284

--

$429,571

108

--

$314,406

$64,524

$23,083

--

$402,012

85

--

$306,584

$69,239

$22,697

$1,477

$399,997

74

1

$304,286

$67,613

$23,278

--

$395,177

101

--

$272,593

$53,082

$20,853

$42,999

$389,528

61

8

$287,555

$65,148

$20,929

--

$373,632

104

--

$207,819

$43,778

$15,898

$92,238

$359,733

40

15

Employee Annual and Sick Leave

34

Appendix B (Continued)

Agency

ALP

SHBP

FICA

ERS

Total

Terminations

Retirees

52 State Road & Tollw ay Authority

$248,969

$57,694

$19,046

$15,006

$340,714

30

2

53 Dept. of Early Care & Learning

$243,928

$55,230

$18,660

$16,805

$334,623

69

6

54 State Fin. & Invest. Comm.

$231,473

$49,920

$17,068

$29,252

$327,712

53

5

55 Central Georgia Tech College

$242,391

$53,980

$18,543

$2,046

$316,961

88

1

56 Dept. of Law

$217,854

$43,502

$16,568

$36,202

$314,125

52

6

57 State Accounting Office

$216,186

$48,796

$15,123

$30,694

$310,799

41

3

58 Supreme Court 59 Wiregrass Tech College1

$194,307 $229,985

$40,791 $48,972

$14,865 $13,698

$59,082 --

$309,045 $292,656

20

8

54

--

60 Public Service Commission

$183,052

$39,154

$14,004

$54,396

$290,606

23

10

61 Augusta Tech College

$212,551

$40,591

$16,260

$5,620

$275,022

85

1

62 Employees Retirement System

$180,373

$35,733

$13,794

$26,843

$256,744

32

3

63 Student Finance Commission

$146,068

$31,561

$11,174

$67,462

$256,266

15

10

64 Northw estern Tech College 65 Heart of Tech College1

$195,685 $176,260

$41,410 $40,115

$14,970 $13,484

-$15,682

$252,065 $245,542

49

--

52

2

66 Dept. of Veterans Service

$157,071

$31,257

$12,016

$42,338

$242,682

56

11

67 Southw est Georgia Tech College

$186,578

$38,059

$14,273

--

$238,910

52

--

68 Albany Tech College

$152,842

$33,490

$11,692

--

$198,025

56

--

69 Lanier Tech College

$151,175

$33,497

$11,565

$1,461

$197,697

52

1

70 Moultrie Tech College

$148,500

$32,174

$11,360

$4,073

$196,107

58

1

71 Ogeechee Tech College

$146,972

$32,720

$11,243

--

$190,935

68

--

72 South Tech College 73 Southeastern Tech College1 74 East Central Tech College1 75 Sw ainsboro Tech College1

$109,811 $123,905 $126,557 $125,721

$20,072 $27,116 $23,662 $23,596

$8,401 $9,479 $9,682 $9,618

$44,127 $1,279 ---

$182,410 $161,779 $159,901 $158,935

25

6

45

1

52

--

32

--

76 Soil & Water Conservation

$76,344

$17,279

$5,840

$37,856

$137,318

18

5

77 Altamaha Tech College

$103,120

$23,739

$7,889

--

$134,748

40

--

78 Okefenokee Tech College

$101,220

$22,936

$7,743

--

$131,900

51

--

79 Subsequent Injury Trust Fund 80 North Metro Tech College1

$73,509 $90,522

$17,001 $16,964

$5,623 $6,925

$30,639 --

$126,772 $114,411

7

4

26

--

81 Northw estern Tech College 82 Appalachian Tech College1 83 Sandersville Tech College1

$79,577 $75,965 $66,907

$18,031 $16,431 $12,162

$6,088 $5,811 $5,118

$3,270 ---

$106,965 $98,208 $84,187

23

1

34

--

21

--

84 Regional Transportation Authority

$64,839

$14,291

$4,738

--

$83,868

14

--

85 State Properties Commission 86 Flint River Tech College1

$25,433 $28,151

$4,518 $5,309

$1,461 $2,154

$16,443 --

$47,855 $35,613

4

2

20

--

87 Aviation & Tech College

$5,747

$1,313

$440

--

$7,500

3

--

Grand Total

$102,399,904 $20,889,072

1 Agencies and institutions that combined or split during the four-year period.

2 Includes Division of Family and Children Services

$7,727,816 $21,948,875 $152,965,667

35,013

3,886

Note: FICA estimates may be slightly higher than actual costs because the Technical College System of Georgia and its institutions do not pay the OASDI portion of FICA

for employees w ho are members of TRS.

Source: State Accounting Office; Division of Family and Children Services; Employees' Retirement System

Employee Annual and Sick Leave

35

Appendix C

Annual Leave Payments Per USG Institution

Fiscal Years 2010-2011

Institution

ALP

FICA

ERS

Total

1 Georgia Institute of Technology

$5,599,848.77 $428,388.43

-- $6,028,237.20

2 University of Georgia

$5,459,459.12 $417,648.62

-- $5,877,107.74

3 Georgia Health Sciences University

$4,728,913.35 $361,761.87

-- $5,090,675.22

4 Georgia State University

$1,952,283.43 $149,349.68

-- $2,101,633.11

5 Kennesaw State University

$1,132,429.18

$86,630.83

-- $1,219,060.01

6 Georgia Southern University

$829,711.51

$63,472.93 $6,151.84

$893,184.44

7 University of West Georgia

$574,925.01

$43,981.76

--

$618,906.77

8 Board of Regents (USG)

$537,932.91

$41,151.87

--

$579,084.78

9 Georgia College & State University

$521,671.98

$39,907.91

--

$561,579.89

10 Georgia Perimeter College

$473,127.50

$36,194.25

--

$509,321.75

11 Armstrong Atlantic State University

$421,882.81

$32,274.03

--

$454,156.84

12 Albany State University

$341,364.24

$26,114.36

--

$367,478.60

13 Valdosta State University

$337,308.74

$25,804.12

--

$363,112.86

14 Columbus State University

$329,665.13

$25,219.38

--

$354,884.51

15 Savannah State University

$323,753.35

$24,767.13

--

$348,520.48

16 Fort Valley State University

$323,567.79

$24,752.94

--

$348,320.73

17 Clayton State University

$293,856.12

$22,479.99

--

$316,336.11

18 Augusta State University

$257,982.45

$19,735.66

--

$277,718.11

19 Middle Georgia College

$201,999.34

$15,452.95

--

$217,452.29

20 Southern Polytechnic State University

$195,784.06

$14,977.48

--

$210,761.54

21 Abraham Baldwin Agricultural College

$195,269.92

$14,938.15

--

$210,208.07

22 Macon State College

$191,788.65

$14,671.83 $11,301.43

$206,460.48

23 North Georgia College & State University

$168,291.04

$12,874.26

--

$181,165.30

24 Atlanta Metropolitan College

$161,351.57

$12,343.40

--

$173,694.97

25 College of Coastal Georgia

$155,802.00

$11,918.85

--

$167,720.85

26 Georgia Southwestern State University

$152,705.04

$11,681.94

--

$164,386.98

27 Georgia Highlands College

$148,541.28

$11,363.41

--

$159,904.69

28 Bainbridge College

$122,396.15

$9,363.31

--

$131,759.46

29 Darton College

$113,240.61

$8,662.91

--

$121,903.52

30 Gainesville State College

$111,550.07

$8,533.58

--

$120,083.65

31 Georgia Gwinnett College

$108,222.16

$8,279.00

--

$116,501.16

32 Dalton State College

$106,225.66

$8,126.26

--

$114,351.92

33 Gordon College

$61,824.17

$4,729.55

--

$66,553.72

34 South Georgia College

$60,680.49

$4,642.06

--

$65,322.55

35 Waycross College

$54,104.10

$4,138.96

--

$58,243.06

36 Skidaway Institute

$37,297.80

$2,853.28

--

$40,151.08

37 East Georgia College

$36,857.94

$2,819.63

--

$39,677.57

Grand Total

$26,823,615.44 $2,052,006.58 $17,453.27 $28,875,622.02

Source: University System of Georgia records.

Terminations 994
1,291 1,350
483 273 300 147
66 121 137 102
98 131 116
83 99 91 87 78 52 48 50 41 27 56 31 34 31 34 38 34 45 22 28 13 12 12 6,655

Employee Annual and Sick Leave

Accrual Rate

Appendix D

Sick & Annual Leave Policies of Southeastern States & Federal Government

Alabama

Florida

Mississippi

North Carolina

Vacation

South Carolina

Tennessee

Federal Govt

Year 0-5: 13 days Year 5-10: 16.25 days Year 10-15: 19.5 days Year 15-20: 22.75 days Year 20-25: 26 days Year 25+: 29.25 days

Year 0-5: 13 days Year 5-10: 16.25 days Year 10+: 19.5 days

Year 0-3: 18 days Year 3-8: 21 days Year 8-15: 24 days Year 15+: 27 days

Year 0-5: 14 days Year 5-10: 17 days Year 10-15: 20 days Year 15-20: 23 days Year 20+: 26 days

Year 0-10: 15 days Earn 1.25 extra days for
each year over 10

Year 0-5: 12 days Year 5-10: 18 days Year 10-20: 21 days Year 20+: 24 days

Year 0-3: 12 days Year 3-15: 18 days Year 15+: 24 days

Carry-Over Plan

60 days

30 days

Unlimited

30 days

45 days

Year 0-5: 30 days Year 5-10: 36 days Year 10-20: 39 days Year 20+: 42 days

30 days

Accrual over Maximum Converts to emergency sick leave

Converts to sick

Termination Payment

Yes, up to 60 days

Yes, up to a lifetime maximum of 30 days paid out either at termination or at a rate of up to 3 days per
year

N/A

Converts to sick

Yes, up to 30 days

Yes, up to 30 days

Sick

Use it or lose it

Converts to sick

Use it or lose it

Yes, up to 45 days

Yes, up to maximum carryover

Yes, up to 30 days

Accrual Rate

13 days

13 days

Year 0-3: 12 days Year 3-8: 10.5 days Year 8-15: 7.5 days
Year 15+: 9 days

12 days

15 days

12 days

12 days

Carry-Over Plan Accrual over Maximum
Termination Payment

150 days Converted to emergency
sick leave
No

Unlimited
N/A Yes of balance paid out
(up to 60 days) w ith 10 years of service

Unlimited N/A

Unlimited N/A

No

No

Leave and Retirement

180 days Use it or lose it
No

Unlimited N/A
No

Unlimited N/A
No

1) May apply up to 150 days

Applied to Retirement

of sick as service credit, OR 2) Payment for up to 75

No

All sick and any unpaid All sick is applied as service Up to 90 days of sick can

annual is applied as service

credit

be applied as service credit

credit

All sick is applied as retirement service credit

All sick can be applied as retirement service credit

days of sick at hourly

rate

Other Paid Time Off

Paid Holidays

13

10

10

11-12

12

11

10

Source: Federal Office of Personnel Management, Alabama Department of Personnel, Florida Office of Management Service, Mississippi Personnel Board, North Carolina Office of State Personnel, South Carolina Budget and Control Office of Human Resource, & the Tennessee Department of Human Resources.

36

Employee Annual and Sick Leave

37

Appendix E Companies with Traditional Vacation and Sick Leave Policies

Company 1 Company 2

Accrual Rate

Year 0-5: 21 days
Year 5-10: 23.1 days
Year 10+: 27 days

Year 0-1: 0 days
Year 1-2.5: 4.5 days
Year 2.5-5: 9 days
Year 5+: 14 days

Carry-Over Plan

May carry-over up to 45 days

May carry-over up to 1.5 times
annual accrual rate

Accrual Over Maximum
Termination Payment

Use it or lose it
Paid for all unused vacation

Use it or lose it
Paid for all unused vacation

Accrual Rate

8.8 days

Year 0-1: 0 days
Year 1-2.5: 4.5 days
Year 2.5-5: 9 days
Year 5+: 14 days

Company 3 Vacation
Year 0-15: 15 days Year 15+: 20 days
Use it or lose it
N/A Paid for all unused vacation
Sick
20 days

Company 4 Company 5

Year 0-10: 15 days
Year 10+: 20 days
May carry-over up to the annual accrual; carry-
over will offset the accrual earned in
the next year

Year 0.5-1: 5 days
Year 1-3: 10 days
Year 4-11: 15 days
Year 12-19: 20 days
Year 20+: 25 days
Use it or lose it

Use it or lose it

N/A

Paid for all unused Vacation

Paid for all unused vacation

Taken as needed Taken as Needed

Company 6
15 days
Use it or lose it N/A
No payment Taken as needed

Carry-Over Plan

May carry-over up to maximum of 108 days

Use it or lose it

Use it or lose it

N/A

N/A

N/A

Accrual Over Maximum

Use it or lose it

N/A

N/A

N/A

N/A

N/A

Termination Payment

No Payment

No Payment

No Payment

N/A

N/A

N/A

Leave and Retirement

Unused Leave

Applied to

No

No

No

No

No

No

Retirement

Other Paid Time Off

Paid Holidays

8

10

9

11

6

8.5

Personal Days

0

4

0

1

8

0

Source: DOAA Survey

Employee Annual and Sick Leave

38

Appendix E (Continued) Companies with a Single Paid Time Off Bank
Company 1 Company 2 Company 3 Company 4 Company 5 Company 6
PTO Leave

Company 7

Accrual Rate

Year 0-3: 16 days
Year 4-5: 18 days
Year 6-10: 21 days
Year 10-20: 26 days
Year 20-30: 28 days
Year 30+: 30 days

Entry level: 20 days
Mgmt. level: 25 days
Max. level: 30 days

Entry level: 15 days
Max. level: N/A

Year 0-4: 22 days
Year 5-14: 27 days
Year 15+: 32 days

Year 0-4: 22 days
Year 5-9: 27 days
Year 10+: 32 days

Year 0-1: 15 days
Year 1-4: 20 days
Year 5-9: 25 days
Year 10+: 30 days

Year 0-4: 15 days
Year 5-14: 20 days
Year 15+: 25 days

Carry-Over Plan
Accrual Over Maximum

Up to 5 days can be:
a) carried-over and used within the next year, b) carried-over
into an emergency leave bank, c) paid out, or
d) some combination of
the three
All leave earned over the
maximum is lost

Up to 50% of prior year
accrual can be carried-over and used within the
next year
All leave earned over the
maximum is lost

May carry-over up to 2 times the annual accrual
rate
All leave earned over the
maximum is lost

May carry-over 22 days per year
up to a maximum of 50
days
All leave earned over the
maximum is lost

May carry-over up to 70 days
All leave earned over the
maximum is lost

Termination Payment

Up to 10 days

Paid for all unused PTO

Applied to Retirement

Lump-sum payment for up to 30 days of
banked emergency leave and a payroll extension for any balance beyond 30 days

Employer will match 5% of termination payment as a
401(k) contribution

Paid for all unused PTO

Paid for all unused PTO

Leave and Retirement

No

No

Other Paid Time Off

Paid for all unused PTO
No

May convert an unlimited
amount of PTO to emergency
sick
N/A
Paid for all unused PTO
No

May carry-over up to 4 times the annual accrual
rate
Paid for any leave over maximum carry-
over Paid for all unused PTO
No

Paid Holidays

10

8

8

0

0

7

6

Source: DOAA survey

Employee Annual and Sick Leave

Appendix F Sick & Annual Leave Policies of Comparable Institutions: Regular Staff

California Institute

Institution Name

of Technology

University of Florida

James Madison

California State Bridgewater State

University

University, Fullerton

University

Nicholls State University

Colorado Mesa

Penn State

Ivy Tech

Inver Hills

University

University, Altoona Collin College Community College Community College

Comparable USG Insti tuti on

Georgia Institute of Technology

Accrual Rate

Year 0-4: 15 days Year 5-9: 18 days Year 10+: 21 days

Carry-Over Plan

40 days

Accrual Over Maxim um
Termination Payment

Use it or lose it Up to 40 days

Accrual Rate

12 days

Carry-Over Plan
Accrual Over Maxim um

120 days Use it or lose it

Georgia Institute of Technology and
University of Georgia
Year 0-5: 13 days Year 5-10: 16 days Over 10: 19 days
or 22 days for TEAMS
30-44 days

Georgia Southern University

Kennesaw State University

University of West Georgia

Fort Valley State University

Macon State College Dalton State College

Georgia Perimeter College

Year 0 - 5: 12 days Year 5-10: 15 days Year 10-15: 18 days Year 15-20: 21 days Year 20-25: 24 days Year 25+: 27 days

Year 0-3: 10 days Year 3-6: 15 days Year 6-10: 17 days Year 10-15: 19 days Year 15-20: 21 days Year 20-25: 23 days Year 25+: 24 days

Annual

Year 0-4.5: 10 days

Year 0-2: 12 days

Year 4.5 - 9.5: 15 days Year 3-4: 15 days

Year 9.5 - 19.5: 20 days Year 5-9: 18 days

Year 19.5+: 25 days Year 10-14: 21 days

Year 15+: 24 days

24-54 days (depends 34-48 days (depending on years of service) on years of service)

64 days

Unlim ited

Year 1-5: 12 days

Non-Exem pt

Year 0-3: 12 days

Year 6-10: 15 days Year 0-10: 18 days Year 4-5: 15 days

Year 11-15: 18 days Year 11-25: 24 days Year 6-10: 20 days

Year 16+: 21 days Year 26+: 27 days Year 11+: 21 days

Exem pt

Year 1-25: 24 days

Year 25+: 27 days

24-42 days (depends on years
of service)

24-33 days (depending on years of service and exempt or
non-exempt status)

15 days

Converts to sick

Use it or Lose it

Use it or Lose it

Converts to sick

N/A

Use it or Lose it

Use it or Lose it

Use it or Lose it

Up to 25 days (TEAMS members may cash out
up to 16 hours each December)

Up to 24-42 days (depends on years of
s ervice)

13 days
Unlim ited N/A

VSDP Yea r 1-5: 8 da ys Yea r 5-10: 9 da ys Yea r 10+: 10 da ys
Non-VSDP 15 da ys
VSDP: Use it or lose it Non-VSDP: Unlimited
VSDP: N/A Non-VSDP: N/A

Up to maximum accrual
12 days
Unlim ited N/A

Up to 64 days

Up to 37.5 days

Sick

15 days

Year 0-2: 12 days Year 3-4: 15 days Year 5-9: 18 days Year 10-14: 21 days Year 15+: 24 days

Up to maximum accrual
10 days

Up to maximum accrual
12 days

Unlim ited N/A

Unlim ited N/A

45 days
Converts to annual leave (up to 16 hours )

Unlim ited N/A

Up to 10 days
12 days 66 days Use it or lose it

Termination

Payment

No

VSDP: No Non-VSDP: Yes, 25%

Eligible retirees may be paid 20% of sick

Options vary based on

Eligible retirees (or those eligible to

No

of unused sick (max

No

leave balance at

years of service and type of retirement plan

retire) paid 1/4 of

No

No

$5k)

retirem ent

sick leave

Unused Leave Applied to Retirement
Paid Holidays Personal Days

Leave and Retirement

Sick leave credit will

be paid in cash or

directed to the

employee's tax

deferred account, or to Termination payments

beneficiaries at the time of death. Sick

> $2k are invested in a

leave credit is

401(a) plan

calculated based on

age (55) with at least

10 years of

consecutive service.

VSDP: No Non-VSDP: Sick may be applied as service
credit

Sick can be applied as

service credit at

Annual may be applied as service credit

retirem ent

Sick & annual may be applied as service credit

Other Paid Time Off

11

10

12

13

13

14

1

1-4

VSDP: 4-5 Non-VSDP: 1

1

3

0

Depending on

No

accumulated sick leave balance, up to

No

100 or 136 hours of

unused sick leave paid

at retirement

10

11

16

0

1

1

Darton College Year 0-2: 16 days Year 2+: 19 days
25 or 29.5 days Use it or Lose it Up to maximum
accrual
12 days
132 days Use it or lose it Eligible employees (incl retirees) paid for 50% of the first 100 days of accrued leave
balance
No
8 0

Atlanta Metropolitan College
Year 0-5: 12 days Year 5-8: 15 days Year 8-12: 21 days Year 12-18: 22.5 days Year 18-25: 24 days Year 25-30: 25.5 days Year 30+: 27 days
34.4 days Use it or Lose it Up to 32.5 days
12 days
112.5 days Use it or lose it
No
No
12 2

39

Source: Websites of the respective institutions' human resources offices

Employee Annual and Sick Leave

Appendix F (contd) Sick & Annual Leave Policies of Comparable Institutions: Faculty

Institution Name

California Institute of Technology

University of Florida

James Madison University

California State Bridgewater State

University, Fullerton

University

Nicholls State University

Colorado Mesa University

Penn State University, Altoona

Collin College

Ivy Tech

Inver Hills

Community College Community College

Comparable USG Insti tuti on

Georgia Institute of Technology

Georgia Institute of Technology and
University of Georgia

Georgia Southern University

Kennesaw State University

University of West Georgia

Fort Valley State University

Annual

Macon State College

Dalton State College

Georgia Perimeter College

Darton College

Atlanta Metropolitan College

Accrual Rate

21 days

Carry-Over Plan
Accrual Over Maxim um
Termination Payment

Use it or lose it N/A
Up to 21 days

Accrual Rate

As needed (up to 6 m os /yr)

Full-Tim e 22 days Academic Year 0 days
60 Days Converted to Sick
Up to 44 days
13 days

Full-Tim e Peer Coverage Academic Year
None
N/A
N/A NA

Full-Tim e 24 days
Academic Year 0 days
40 & 55 days depending on years of
s ervice
Use it or Lose it
Up to maximum accrual

VSDP Year 1-4: 8 days Year 5-9: 9 days Year 10+: 10 days
Non-VSDP Peer Coverage

Full-Tim e 12 days
Academic Year Accrue leave pro-rata

0 days
N/A N/A NA
10 days

0 days (emergency leave available upon
reques t)
N/A
N/A
N/A
Sick
Year 0-2: 12 days Year 5-9: 18 days Year 10-14: 21 days Year 15+: 24 days

0 days
N/A N/A NA

0 days (no formal leave 0 days (no formal leave

policy, but other leave policy, but other leave

types avail whereby types avail whereby

faculty members may faculty members may

receive paid or unpaid receive paid or unpaid

time off)

time off)

N/A

N/A

N/A

N/A

NA

NA

Full-Tim e 66 days
Academic Year 0 days

0 days (no formal leave policy, but other leave
types avail whereby faculty members may receive paid or unpaid
time off)

12 days

0 days
N/A N/A N/A
12 days

0 days
N/A
N/A NA
Full-Tim e 20 days initially, then
10 days each additional year
Part-Tim e Accrue leave pro-rata

Carry-Over Plan

N/A

Accrual Over

Maxim um

N/A

Termination Payment

N/A

Unlim ited

Use it or lose it

Unlim ited

Unlim ited

Unlim ited

Use it or lose it

N/A

66 days

132 days

112 days

Deposited into SL

bank for future use (in

emergencies or if

N/A

N/A

N/A

N/A

N/A

N/A

N/A

Use it or lose it

Use it or lose it

leave service and

return) or partial cash

payment (if age and

YOS eligible)

Sick Leave Liquidation

No

No

No

Eligible retirees may be paid 20% of sick
leave balance at

Options vary based on years of sevice and

No

N/A

Eligible employees Payment of 40% of

(incl retirees) paid for unused SL balance

No

50% of the first 100 (up to 112 days) and

retirem ent

type of retirement plan

days of accrued leave 12.5% of SL bank

balance

depending on age and

YOS

Leave and Retirement

Unused Leave

Termination payments

Applied to

No

> $2k are invested in a

No

Sick may be applied as service credit

No

Sick may be applied as service credit

No

N/A

No

No

No

Retirement

401(a) plan

Other Paid Time Off

Paid Holidays

11

10

12

13

0

14

0

0

0

0

12

Personal Days

0

4

VSDP: 4-5 Non-VSDP: 0

1

1 per semester

0

2

0

1

Up to 3

2

Source: Websites of the respective institutions' human resources offices

40

Employee Annual and Sick Leave

Appendix F (contd) Sick & Annual Leave Policies of Comparable Institutions: Administrative Officers

Institution California Institute

Name

of Technology

University of Florida

Compa r a bl e USG Institution

Georgia Institute of Technology

Georgia Institute of Technology and
University of Georgia

Accrual Rate

21 days

22 days

James Madison University
Georgia Southern University
20 days

California State University, Fullerton
Kennesaw State University
24 days

Bridgewater State University

Nicholls State University

Colorado Mesa

Penn State

University

University, Altoona Collin College

University of West Georgia

Fort Valley State University

Annual

Year 0-8: 22 days Year 8-16: 23 days Year 16-25: 25 days Year 25+: 30 days

Year 0-2: 12 days Year 3-4: 15 days Year 5-9: 18 days Year 10-14: 21 days Year 15+: 24 days

Macon State College 20 days

Dalton State College
Year 1-25: 24 days Year 25+: 27 days

Georgia Perimeter College
Year 0-10: 20 days Year 11+: 21 days

Ivy Tech Community
College
Darton College

Inver Hills Community
College
Atlanta Metropolitan College

Year 0-2: 19 days Year 2+: 26 days

Year 0-5: 23 days Year 6-12: 25 days Year 13-20: 28 days Year 21+: 31 days

Carry-Over Plan Use it or lose it

Accrual Over

N/A

Maxim um

Termination Payment

Up to 21 days

60 Days

Use it or lose it

<10 Years: 48 days 10+ Years: 55 days

Converts to Sick

N/A

Use it or lose it

Up to 44 days (TEAMS members may cash out No, employees receive
up to 16 hrs each separate severance pay December)

Up to 24 days

Accrual Rate

As needed (up to 6 m os /yr)

13 days

Carry-Over Plan

N/A

Unlim ited

VSDP Year 1-4: 8 days Year 5-9: 9 days Year 10+: 10 days
Non-VSDP Peer Coverage Use it or lose it

12 days Unlim ited

64 days Converts to Sick

Unlim ited N/A

40 days Use it or lose it

30-33 days (depending on years
of service)
Use it or lose it

Up to 64 days

Up to 37.5 days

Up to 40 days

Up to 33 days

15 days Unlim ited

Sick
Year 0-2: 12 days Year 3-4: 15 days Year 5-9: 18 days Year 10-14: 21 days Year 15+: 24 days
Unlim ited

66 days Use it or lose it

Days Per Absence Year 0-2: 20 days Year 2-5: 40 days Year 5-10: 60 days Year 10-15: 120 days Year 15+: Mgmt.
Dis cretion
N/A

Accrual Over

Maxim um

N/A

N/A

N/A

N/A

N/A

N/A

N/A

N/A

Termination

N/A

No

No

Eligible retirees may be Options vary based on

No

paid 20% of sick leave years of service and

No

N/A

Payment

balance at retirement type of retirement plan

Leave and Retirement

Unused Leave

Termination payments

Sick may be applied Annual may be applied as Sick and annual may

Applied to Retirement

No

> $2k are invested in a

No

401(a) plan

as service credit

service credit

be applied as service credit

No

No

Paid Holidays

11

10

12

13

Personal Days

0

4

VSDP: 4-5

1

Non-VSDP: 1

Source: Websites of the respective institutions' human resources offices

Other Paid Time Off

13

14

10

11

3

0

2

1

15 days Use it or lose it Up to 10 days

29.5 or 40 days

34 days

Use it or lose it

Converts to sick

Up to 40 days

Up to 5% of the value with 5 years of service & 9 months advance notice of termination

12 days

12 days

15 days

66 days Use it or lose it
No

132 days

125 days

Deposited into SL bank for future use (in

emergencies or if

Use it or lose it

leave service and return) or partial cash

payment (if age and

YOS eligible) Sick Leave Liquidation

Eligible employees Payment of 40% of

(incl retirees) paid for unused SL balance 50% of the first 100 (up to 112 days) and

days of accrued leave 12.5% of SL bank

balance

depending on age

and YOS

No

No

No

16

8

12

1

0

2

41

For additional information or for copies of this report call 404-657-5220 or see our website: http://www.audits.ga.gov/rsaAudits