After furloughs: State workers' leave balances
Transcript of After furloughs: State workers' leave balances
-
7/29/2019 After furloughs: State workers' leave balances
1/28
Ae Flohs:
Sae Woes Leae Balaes
M AC TAy lo r l e g i s l A T i v e A n A l y s T M A r C h 14 , 2 01 3
-
7/29/2019 After furloughs: State workers' leave balances
2/28
A n L A O R e p O R t
2 LegislativeAnalystsOfcewww.a.ca.
-
7/29/2019 After furloughs: State workers' leave balances
3/28
A n L A O R e p O R t
www.a.ca.LegislativeAnalystsOfce 3
ExEcutivE SummAryOver the last ve years, the state has reduced state workers pay in exchange or giving them
additional time o. Tis report examines whether state employees took this additional time oor
whether, aer accounting or changes in use o vacation and other time, they worked about as many
days as they did beore.
LAO Fs
Furloughs Increased Allowed ime O by 50Percent. Te time o policies (urloughs)
greatly increased the average state workers allowed time o andover the course o the ve years
reduced his or her pay by about $21,000. Te average employee received 79 urlough days, increasing
his or her available time o by 50 percent during this period.
Vacation Balances Increased, Cap Did Not Contain Growth. State workers used most o their
urlough days, but signicantly decreased their use o vacation and annual leave days. As a result,
the average employees vacation/annual leave balance increased by 16 days between 2008 and 2012.Te states primary tool or limiting its leave balance liabilitiesa cap on the amount o vacation
and annual leave hours an employee may havewas not eective at containing leave balances. In
January 2013, more than 23,700 employees leave balances exceeded the cap.
Separation Payments at Historic Levels. Employees with leave balances may cash out or
burn o their leave as they separate rom state service. Payments to separating employees are now
at historic levels, nearly $270 million in 2011-12.
Leave Liabilities at Historic Highs. Furloughs reduced state employee compensation costs
by about $5 billion between 2008-09 and 2012-13. Probably nearly $1 billion o these urlough
savings was not long-term savings. Instead, the state must pay employees this money as they retire
or otherwise leave state service. As o June 2012, the states liability to pay employee leave balances
totaled $3.9 billion (about $2.1 billion General Fund) and was growing. Tis leave balance liability
equivalent to about 27 percent o the states salary costsis higher than most other public and
private employers.
Opos o Leslae coseao
Te states large balance o ununded leave liabilities can pose scal stress on departments,
reduce budget transparency, strain management-employee relations, and negatively aect public
trust in state employee management. For these reasons, we recommend the Legislature consider
options to reduce the states leave balance liabilities (or at least take actions containing their uturegrowth), including imposing a use it or lose it policy on uture accruals o leave, requiring
departments to actively implement the states leave cap policy, and instituting a leave buyback
program.
-
7/29/2019 After furloughs: State workers' leave balances
4/28
A n L A O R e p O R t
4 LegislativeAnalystsOfcewww.a.ca.
-
7/29/2019 After furloughs: State workers' leave balances
5/28
A n L A O R e p O R t
www.a.ca.LegislativeAnalystsOfce 5
intrOductiOn
Over the last ve years, in response to severe
state budget diculties, the state has given
most employees time o rom work in exchange
or reduced pay. Te time-o policy began as
administratively imposed urloughs and was
replaced by the collectively bargained Personal
Leave Program (PLP). Because urloughs and PLP
are unctionally the same policy, we reer to them
as urloughs in this report.
Caliornia state workers historically have not
used all o the time o they earn in a year. Tus, at
the time the urlough policies were adopted, there
was concern that state employees might not take o
all the additional time provided under urloughs.
Tis, in turn, would result in state workers carrying
larger balances o unused vacation time and annual
leavetriggering increased state costs when the
employees separate rom state service.
Tis report provides an overview o state
leave and urlough policies and then examines the
eect o the recent urloughs on leave balances.
Te second part o the report discusses whether
large leave balances are a problem or the state and
reviews the states options or reducing them or
containing their growth.
BAckgrOund
State employee leave BenefitS
Paid ime O Is an Important Part o
Employee Compensation. Research indicates that
employees across the public and private sectors
in the United States highly value paid time o
and that employees who take time o are happier
and more productive. As a result, the state o
Caliornia and most other employers provide paid
time o as part o their compensation packages to
recruit and retain employees. Te states employee
compensation package includes salary, pension,
health, and leave benets.
State Oers Relatively Generous Leave
Benets. Based on surveys o other employers in
the United States, the state o Caliornia appears tooer employees more paid days o each year than
the average employer. Te states relatively generous
leave benetsin addition to its pension and health
benetslikely make the states compensation
package more competitive in recruiting and
retaining sta who otherwise could receive higher
salaries working or dierent employers.
Sae Eploees reee a
vae o Pa das O
About 215,000 people work or a Caliornia
state department or agency (excluding the states
public universities). Figure 1 (see next page) shows
the major departments where these executive
branch employees work. State workers receive a
variety o days o in an ordinary year, including
state holidays, proessional development days
(PDD), and personal holidays. Tese days o
are established in memoranda o understanding
(MOUs) or statute. Employees may use PDD and
personal holidays or any purpose and at any time
during the year, subject to management approval.
Vacation or Annual Leave. In addition toholidays and PDD leave, state employees may
choose whether to earn vacation or annual leave.
As Figure 2 (see next page) shows, vacation and
annual leave are earned on a monthly basis at
rates determined by the employees seniority. I an
employee chooses to earn vacation leave, he or she
accrues 12 days o sick leave each year in addition
-
7/29/2019 After furloughs: State workers' leave balances
6/28
A n L A O R e p O R t
6 LegislativeAnalystsOfcewww.a.ca.
to vacation. While vacation may be used or any
purpose, sick leave may only be used or limited
purposes. Employees who earn annual leave,
conversely, do not earn sick leavethey use annual
leave or vacation and sick days.
Leave Can Be Banked, Cashed Out, or
Burned O.Dierent rules apply to the dierent
types o leave. As shown in Figure 3, most paid
days oas well as leave days provided under
the urlough programs or earned by working onholidays or overtimemay be banked and used in
uture years. In addition, most leave may be burned
o, a term that means that the employee collects a
salary and benets while not working in the period
just beore he or she separates rom state service.
Finally, as an alternative to burning o leave,
employees may cash out leave that is considered
compensableprimarily, vacation, annual
leave, and holiday and overtime credit. When an
employee separates rom state service, he or she
receives a separation payment or any unused
compensable leave. Separation payments are
calculated by multiplying the number o unused
compensable leave hours by the separating
employees nal salary at an hourly rate. Other
Corrections and Rehabilitation
Transportation
California Highway Patrol
State Hospitals
Employment DevelopmentMotor Vehicles
Developmental Services
Other
Nearly Three-Fifths of State Employees Work in Seven Departments
Figure 1
Figure 2
Number of Vacation or Annual LeaveDays Earned Each Year IncreasesWith Senioritya
Years of Service
Employee MayChoose to Receive:
VacationbAnnualLeave
Less than 3 10.5 16.5
3 to 10 15.0 21.0
10 to 15 18.0 24.0
15 to 20 19.5 25.5
More than 20 21.0 27.0a Managers, supervisors, frefghters, and highway patrol ofcers
generally accrue more leave each month.b Employees who choose to take vacation leave also receive
12 days o sick leave each year.
-
7/29/2019 After furloughs: State workers' leave balances
7/28
A n L A O R e p O R t
www.a.ca.LegislativeAnalystsOfce 7
dayssuch as urlough days and sick leaveare
considered non-compensable. When an employee
separates rom state service, he or she does not
receive compensation or unused non-compensable
days. (In the case o sick leave, however, an
employee retiring rom state service can applyunused sick leave towards his or her service credit
or purposes o calculating pension benets.)
use Leae ceaes Lables
Direct Costs, Overtime, and Productivity
Losses. Under current law, virtually all unused
leave poses some orm o liability or employers
when an employee separates rom employment.
Specically, employers, including the state, incur:
Costs when the employee cashes out
compensable leave.
Productivity losses when employees burn
o leave.
Additional costs i the employer pays
another employee to cover or workers
burning o leave. Tese costs sometimes
accrue to employees as overtime wagesin
which per-hour costs are higher than or
the typical hour worked.
Certain Costs racked in Financial
Statements. As a result, the statelike most public
employerstracks these liabilities and reports
compensable leave
balances in its annual
nancial statements. Te
state, however, does not
set aside unds to pay
these costs, but requires
departments to pay them
on a pay-as-you-go basis
as state workers separate
rom employment.
Departments Leave Positions Vacant or
Redirect Funds to Cover Costs. o cover these
costs, departments typically leave positions vacant
and/or redirect unds rom other parts o their
budgets. Depending on the amount o unused leave
associated with employees separating rom stateservice in any year, this approach can negatively
aect a departments (1) productivity (by causing
it to leave many positions vacant or lled with
absent sta members) or (2) ability to carry out its
obligations within budgeted resources.
caps o Leae Balaes
Many Employers Limit Accumulation o
Unused Vacation and Annual Leave Days. o
minimize the nancial risks associated with
large leave balances, many public and private
organizations adopt leave policies that limit the
number o unused vacation/annual leave days
employees may carry over rom one year to the
next. It is common or these limits to be between
20 days and 40 days o leave, meaning these caps
typically prevent vacation/annual leave balance
liabilities rom exceeding between 8 percent and
15 percent o an employees annual salary costs.Many large public employers that we reviewed
imposed a cap on the amount o vacation/annual
leave employees may carry over. For example, the
ederal government limits most employee vacation/
annual leave balances to 30 days, New York State
Figure 3
Rules Governing the Major Types of State Employee Leave
Leavea Banked? Burn Off? Cash Out?
Vacation Yes Yes Yes
Annual Leave Yes Yes Yes
Holidays No Yes No
Holiday and Overtime Credit Yes Yes Yes
Proessional Development Days No Yes No
Sick Leave Yes No No
Furlough Yes Yes Noa Some state employees are eligible or additional types o leave.
-
7/29/2019 After furloughs: State workers' leave balances
8/28
A n L A O R e p O R t
8 LegislativeAnalystsOfcewww.a.ca.
limits these balances to 40 days, and exas limits
balances to between 23 days (or employees with
less than two years o service) and 67 days (or
those with more than 35 years o service). Here in
Caliornia, the city o Los Angeles limits balances
to the amount o vacation an employee earnsover two years, the county o Los Angeles limits
balances to 40 days, and San Francisco limits
balances to between 40 days (or those with up to
ve years o service) and 50 days (or those with
more than 15 years o service).
State Policy Caps Vacation and Annual Leave
Balances. Te state o Caliornia caps the amount
o vacation/annual leave that most state workers
may accumulate at 640 hours (80 days). Te two
signicant exceptions to this rule pertain to the
ollowing nonmanagerial groups.
California Highway Patrol (CHP)
Ofcers. Te CHP ocers may accumulate
up to 816 hours (102 days) o leave.
Correctional Ofcers. Tese ocers cap
was 640 hours, but the cap was eliminated
in their most recent MOU.
Te states leave balance capsestablished in
regulations, statute, and MOUsare the states
main tools to manage state employees leave
balances. When an employee approaches or exceeds
the caps, managers are supposed to work with
the employee to develop a plan to ensure that the
employee is able to take time o to keep his or her
leave balances below the applicable cap.
furloughS
Many Employers Use Furloughs. When acing
scal challenges, many employersin state, ederal,
local government, and the private sectorhave
used urloughs as a way o maintaining their
workorce while reducing employee compensation
costs. Furloughs typically reduce workers pay by
reducing the amount o time they work.
State Frequently Uses Tem. Te state o
Caliornia has used urloughs in 8 o the last
30 scal years (1992-93, 1993-94, 2003-04, and
2008-09 through 2012-13), typically reducing state
employee pay by about 5 percent and increasing
employee allowed time o. Te state also realizesother savings rom urloughs because the pay cuts
indirectly reduce its costs or employee benets that
are determined as a percentage o employee pay,
such as contributions to Medicare, Social Security,
and pensions. Caliornia, however, typically has
chosen to apply its urlough policies in a manner
that does not aect employees pension and other
benetsor the amount o vacation and other leave
that employees earn.
Recently, State Has Imposed Five Years o
Furloughs. Te state began its recent series o
urloughs in February 2009. Te current urlough
program is scheduled to end July 2013. Between
February 2009 and July 2013, there have been only
our months during which no state employee was
urloughed (July 2010 and April, May, and June
2012). Troughout this ve-year period, urloughed
state employees received one, two, or three days
o urlough each month, generally correspondingwith 4.62 percent, 9.24 percent, or 13.86 percent
cuts in pay, respectively. Figure 4 shows that as a
result o this policy, the state reduced its employee
compensation costs by about $5 billion between
Figure 4
Savings From Furloughs andPersonal Leave Programs
(In Millions)
FiscalYear
GeneralFund
OtherFunds Totals
2008-09 $322 $268 $590
2009-10 1,185 982 2,167
2010-11 601 519 1,120
2011-12 183 153 335
2012-13 373 445 818
Totals $2,663 $2,367 $5,030
-
7/29/2019 After furloughs: State workers' leave balances
9/28
A n L A O R e p O R t
www.a.ca.LegislativeAnalystsOfce 9
February 2009 and July 2013. O this $5 billion,
about $2.7 billion o savings accrued to the
nancially troubled General Fund. Furloughs,
however, also were applied to employees supported
in whole or part by other unds or administrative
reasons and to prevent employee migration romGeneral Fund departments.
Furlough Policies Varied Considerably. At
various points in time, certain classications,
bargaining units, and departments have been
exempt rom the urlough policy. As a result, there
Figure 5
Major Findings Furloughs greatly increased employees available time o.
State workers used most o their urlough days, but decreased their use ovacation and annual leave days.
The states cap on leave balances was not eective.
Leave liabilities and payments to separating employees are now at historiclevels.
Some urlough savings create long-term liabilities.
is signicant variation in the number o urlough
days employees received. In addition, during
this period, urloughs or some employees were
sel directed, meaning that employees could
choose when to use their urlough day, subject to
management approval. In other cases, urloughswere compulsory on specied days, commonly
called Furlough Fridays. For details on when each
employee group was urloughed and background
on how the urlough policy was administered
during this period, please reer to the appendix.
LAO FindingS
o assess the eect o urloughs on stateemployee leave balances, we reviewed summary data
regarding state compensable leave balances over the
last ew decades, met with selected departments,
and examined department level leave balance data
between September 30, 2008 (the earliest date or
which detailed inormation was available) and
June 30, 2012. Figure 5 summarizes the key ndings
rom our review.
Flohs geal iease Eploees
Allowe te O
Most state employees received a signicant
number o days o in exchange or reduced pay
during the recent urlough period. Figure 6 (see
next page) illustrates how many urlough days an
employee received i the employee had been subject
to the policies or their entire duration. As can be
seen rom the gure, the
number o urlough days
given to employees variessignicantly by employee
group.
For Average Worker, Allowed ime OIncreased by 50Percent During Last Five Years.
o put the number o urlough days in Figure 6 into
perspective, it is helpul to compare them with the
number o paid days o an average state worker
receives in the absence o urloughs. Specically,
the average state employee earns 32 paid days o
each year18 vacation days and 14 days or state
and personal holidays and PDD. Te average worker
received 79 urlough days between 2008-09 and
2012-13, averaging 16 days per year. Te states
urlough policy, thereore, increased the average
employees total amount o available time o by
50 percent. Tis large increase in time o decreased
the amount o time available to complete state work
products. It is important to note that, in many cases,
this signicant increase in available time o and
-
7/29/2019 After furloughs: State workers' leave balances
10/28
A n L A O R e p O R t
10 LegislativeAnalystsOfcewww.a.ca.
decrease in work time occurred without the state
ormally adjusting expectations or state department
productivity.
Sae Woes use mos o
the Floh dasPrison Workers, However, Used Less o
Teirs. As o June 2012 (the latest data we
reviewed), state employees had used about
95 percent o their urlough days and had, on
average, three unused urlough days banked. Te
key exceptions were employees o the Caliornia
Department o Corrections and Rehabilitation
(CDCR) and certain small departments.
Specically, while CDCR employees make up less
than 30 percent o the states workorce, these
employees account or nearly two-thirds o the
states balance o unused urlough days. Tis is not
entirely surprising given that CDCR employees
(1) received the greatest number o urlough days,
(2) work at 24-hour aci lities where giv ing one
employee time o oen requires paying another
overtime, and (3) had greater fexibility to bank
urlough days under sel-directed urloughs rather
than Furlough Fridays.
Workers in Some Small Departments
Used Less. Viewed in terms o balances o
unused urlough days per employee, some o
the states smallest departments reported the
largest balances. In act, employees in two o the
states smallest departmentsthe Santa MonicaMountains Conservancy and Commission on
State Mandatesreported having about 14 and 9
unused urlough days per employee, respectively.
Sta rom the commission and other small
departments with whom we discussed our
ndings indicated that the limited number o
sta in their departments made it dicult or any
employee to take time o or lengthy periods.
Eploees deease use o
vaao a Aal Leae
Leave balances grow when employees do not use
all o the days o that they earn. Larger leave balances
result in higher long-term liabilities or the state.
Prior to 2008-09, the average employees vacation/
annual leave balance grew by about 2 percent
annually. During the rst our years o urloughs, in
contrast, our review indicates that that the average
employees vacation/annual leave balance grew byabout 11 percent annually. Tis higher level o growth
is equivalent to the average
employee banking about
4 days o vacation/annual
leave each year during the
urlough period.
Growth in Balances
Caused by Use o Furlough
Days First. Tis growth
in vacation/annual leave
balancesat the same
time that employees used
most o their urlough
daysstems rom
employee decisions to
use urlough days rst,
Figure 6
Employee Groups Received Different Numbers of Days Off
2008-09 Through 2012-13
Employee GroupaFurlough and Personal
Leave Program (PLP) Days
Correctional ofcers, engineers, attorneys, park
rangers, scientists, and stationary engineers
94
Employees represented by SEIU (Local 1000) 79
Managers and supervisors 79
Heavy equipment mechanics, maintenanceworkers, physicians, psychiatric technicians,and health and social services proessionals
70
Firefghters 20
Highway patrol 12a There is variation within employee groups because some departments and classifcations were excluded
rom urlough or PLP policies.
-
7/29/2019 After furloughs: State workers' leave balances
11/28
A n L A O R e p O R t
www.a.ca.LegislativeAnalystsOfce 11
beore using vacation/annual leave days. Tis action
is consistent with the administrations policy that
management approve the use o urlough days beore
other types o leave. We note that employees also
have a personal nancial incentive to use urlough
days beore vacation/annual leave. Tis is becauseseparating employees have the option o burning o
orcashing out unused vacation/annual leavebut
may only burn o unused urlough days. By using
urlough days instead o vacation/annual leave days,
employees signicantly increased the states leave
balance liabilities.
Also Reects Departmental Workload Issues.
Te decreased use o vacation/annual leave also
may refect the diculties many departments
experienced completing their workload with reduced
stang levels. Tere is signicant evidence, or
example, o departments denying or discouraging
employee requests to take time o due to workload
pressures. In addition, there is evidence o managers
authorizing employees to take time o, but then
rescinding the authorized use o leave, citing
operational needs. Actions by management to deny
the use o time o, in turn, appear to have created
some tension in the workplace. We note, or example,that many o the 2012 MOU addenda that established
the collectively bargained urlough program, the PLP,
provide that an employees authorized use o PLP
days cannot be rescinded more than twice even or
operational needs.
Saes cap o Leae Balaes is no Eee
Ineective Leave Cap Not a New Issue. As
discussed earlier in this report, the states main policy
tool to limit state leave balance liabilities is a cap on
unused vacation/annual leave. For many years, there
has been concern about the eectiveness o the cap
on a statewide basis. We note, or example, that in
2005a year without major budgetary constraints
and workorce reductionsthere were more than
900 nonmanagerial correctional ocers and more
than 10,000 other state employees whose vacation/
annual leave balances exceeded the cap. During
labor negotiations that year, the Schwarzenegger
administration characterized these leave balances
as a huge ununded liability or the State and
proposed actions to strengthen the eectiveness othe cap. Tese changes, however, were not included in
any o the ratied MOUs.
Recently, Cap Seemed otally Ineective.
During the urlough period, we ound no evidence
that the cap had an eect on containing state
employee leave balances. Instead, the number o
nonmanagerial correctional ocers over the cap
quadrupled to more than 3,700 by March 2011, when
the state eliminated the cap or these workers. Te
number o other employees over the cap also grew
quickly rom more than 10,000 in 2005 to nearly
24,000 by January 2013.
Department sta with whom we spoke suggested
that they took ew, i any, steps to counsel employees
reaching the cap or to modiy workload to allow
employees to take more time o. In some cases,
supervisorial sta do not appear to receive regular
reports o their stas leave balances. We also note
that there does not appear to be any concerted orconsistent eort by state control agencies to enorce
the cap.
Leae Lables now a Hso Leels
Vacation/Annual Leave Balances Were High
Beore Furloughs Started. During the 1980s and
early 1990s, the states vacation/annual leave balances
were about 22 days per employee. Leave balances
o this size represent more than 8 percent o the
employers annual salary cost. As discussed earlier in
this report, most other employers limit the maximum
vacation/annual leave balance or any single
employee to be between 8 percent and 15 percent o
salary costs. Tus, it is possible that the states average
leave balance o 8 percent was somewhat similar to
other employers liabilities during this period.
-
7/29/2019 After furloughs: State workers' leave balances
12/28
A n L A O R e p O R t
12 LegislativeAnalystsOfcewww.a.ca.
Later in the 1990s and early 2000s, however,
the average state employee vacation/annual leave
balance grew, partly as a result o personnel policy
changessuch as extending the annual leave
program (which oers a greater number o leave
days) to all state employees (instead o limiting it tomanagers) and the urloughs o the early 1990s and
2003-04.
Shortly beore the most recent series o
urloughs, the average state worker had 35 days o
banked vacation/annual leave. Te states liability
rom this unused vacation/annual leave was about
$1.9 billion, or about 14 percent o state salary costs.
Vacation/Annual Leave Balances Grew
Rapidly Afer Furloughs. Aer urloughs started,
employees began using urlough days instead o
vacation/annual leave days. By June 2012, the
average state employees vacation/annual leave
balance grew rom 35 days to more than 53 days.
Te states liability rom vacation/annual leave
in 2012 was about $3 billion. Tis is equal to
more than 20 percent o state employees salaries,
considerably higher than the maximum range o
vacation/annual leave balances allowable by most
other employers and, as Figure 7 shows, over twice
the level in 1984.
Te states total compensable leave liabilities,
however, actually are higher than those shown inFigure 7. Tis is because, in addition to vacation/
annual leave, the state must reimburse separating
employees or unused holiday credit, overtime,
and certain other types o compensable leave
balances. When all orms o compensable leave
are included, the states leave balance liability in
June 2012 was $3.9 billion (about $2.1 billion o
which is attributable to the states General Fund).
Tis $3.9 billion amount is about $1 billion higher
than the states total compensable leave balance
beore urloughs. (Data limitations prevent us rom
discussing the changes over the decades in the states
total compensable leave balances.)
CDCR Accounts or One-Tird o Leave
Balance Liabilities. Figure 8 shows the distribution
o the states $3.9 billion liability across departments.
State Liabilities for Unused Vacation and Annual Leave Time at 30-Year High
Figure 7
2
4
6
8
10
12
14
16
18
20
1984 1989 1994 1999 2004 2009
State Leave Balance Liabilities as a Percentage of State Salary Costs
22%
-
7/29/2019 After furloughs: State workers' leave balances
13/28
A n L A O R e p O R t
www.a.ca.LegislativeAnalystsOfce 13
As shown in the gure, CDCR employees account
or about one-third o these liabilities, but CHP
ocers have by ar the largest number o banked
compensable leave days compared with the average
employee at other major departments. We provide
additional inormation regarding compensable leavebalance liabilities on our website.
$3.9Billion otal Liability Likely to Grow.Going orward, we expect this $3.9 billion liability
to grow because (1) most state employees will
receive a 3 percent to 5 percent pay increase in
July 2013, increasing the cost to cash out their
leave balances, (2) most state employees have been
urloughed or 12 months ollowing June 2012,
(3) employees have some banked urlough and
other non-compensable days that they are likely to
use in lieu o compensable leave, driving up their
compensable leave balances, and (4) state employees
historically have not used all o their leave time
earned in a year even in the absence o urloughs.
For these reasons, we estimate that the states
compensable leave balance will exceed $4 billion by
the start o 2013-14 and
continue to grow in the
oreseeable uture. Tisgrowth will be moderated
somewhat by a likely
increase in the number o
state employees retiring.
Paes o Sepaa
Eploees now a
Hso Hhs
Aected Departments
ypically Absorb
Costs. Under state
budget practices, when
an employee separates
rom state service, the
department that last
employed the individual
pays the employees ull separation payment
regardless o where the employee accrued the leave
balance. Departments typically are not budgeted to
make these separation payments, but are expected
to absorb them within existing resources.
In some cases, because workers have retiredwith extensive unused leave balances, separation
payments have been largesometimes hundreds
o thousands o dollars. Tese large payments, in
turn, have evoked controversy in news reports
particularly in cases when the employee received
payments equal to many months o leave accrued in
excess o the state leave cap.
Separation Payments at Highest Levels
in 30 Years. Te amount o money that state
departments have paid in separation payments has
increased signicantly in recent years to the highest
levels in 30 years. In 2011-12, state departments paid
$270 million in separation paymentstwo-thirds
more than they did during the year beore
urloughs. Tis sudden increase in separation
payments is due to an increase in retirement rates
Figure 8
Leave Balances by Department as of June 30, 2012
Department
Banked Compensable
Leave Days PerEmployee
Liability From
Compensable Leave(Millions)
Corrections and Rehabilitation 72 $1,237.4
Transportation 60 385.2
Caliornia Highway Patrol 91 314.5
Mental Health 51 154.8
Employment Development 39 89.6
Developmental Services 69 89.0
Justice 52 70.6
State Compensation Insurance Fund 55 69.2
Motor Vehicles 34 60.1Social Services 50 50.5
Board o Equalization 42 49.5
Parks and Recreation 42 46.6
General Services 47 40.9
Industrial Relations 51 38.6
Fish and Game 53 37.7
All other 53 1,142.0
Totals 59 $3,876.2
http://lao.ca.gov/reports/2013/stadm/leave-balances/leave-balance-data-supplement.xlsxhttp://lao.ca.gov/reports/2013/stadm/leave-balances/leave-balance-data-supplement.xlsx -
7/29/2019 After furloughs: State workers' leave balances
14/28
A n L A O R e p O R t
14 LegislativeAnalystsOfcewww.a.ca.
and the rapid growth in employee compensable
leave balances. Some departments have requested
budgetary augmentations to cover these costs. As
in the case with the states overall leave balance, we
expect separation payments to remain at high levels
or at least the next ew years.
Soe Floh Sas She
coss o Fe yeas
Roughly $1Billion o Savings Carried Into
Future as a Liability. While employers implement
urloughs to achieve employee compensation
savings, urloughs generally do not yield real
savings unless workers actually take the time o.
Specically, i an employer reduces a workers
pay but the employee works the same amount o
time, the employers leave balance liability usually
grows. Te employer then must pay the employee
when the worker separates rom service. Furlough
policies that reduce employees paywithout
reducing their hours workedshi compensation
costs to uture years when the employer must
make larger separation payments.
Our analysis indicates that roughly
$1 billionmore than $500 million General
Fundo the states $5 billion in urlough savings
has been carried into uture years as a liability
rom larger leave balances. Te state will pay these
liabilities when the employees separate rom stateservice. We note the state also may have incurred
other costs due to the urlough policy, such as
increased overtime expenses or costs to pay
growth in the states ununded pension liabilities.
Tese costs are not included in our $1 billion
estimate.
About $4,000 Owed to Average Employee.
Viewed rom the perspective o an average state
employee, the ve years o urloughs reduced his
or her $69,000 annual salary by a total o $21,000.
Te worker took o most o the urlough days,
but banked some vacation days. Te va lue o
this increased leave is roughly $4,000 today and
will grow, over time, as the employees salary
increases. I the employee does not use this time
in the course o his or her career, the state will
pay the employee or this leave when the worker
separates rom state service.
rEASOnS FOr tHE StAtE tO
rEducE LEAvE BALAncES
Te states liabilities associated with unused
leave are large. Based on trends over the last
30 years, these liabilities likely will continue to
grow. Tis, in turn, prompts the question: Should
the state take actions to reduce employee leave
balances or contain their uture growth?
No Right Level o Employee Leave
Balances. Our review indicates that there is no
single right level o employee leave balances.
Whether large leave balances pose scal or
operational stress on a department depends
on many actors. We note, or example, that
Caliornia had relatively high employee leave
balances or most o the 1990s and early 2000s.
During this time, departments periodically
requested midyear appropriations to cover
separation payments, but the states leave balances
did not appear to pose a major scal problem.
Tat said, or the reasons discussed below, we
think the Legislature should take steps to reduce
the states leave balancesor at least contain their
uture growth.
-
7/29/2019 After furloughs: State workers' leave balances
15/28
A n L A O R e p O R t
www.a.ca.LegislativeAnalystsOfce 15
rees Be taspae
How Departments Absorb Costs Ofen Not
Known. Trough the annual budget process, the
Legislature appropriates money and authorizes
positions or departments to achieve specied
legislative priorities. Once the Legislature approves
the budget package, however, departments modiy
their nancial and operational plans to refect the
pressures related to separating employees leave
balances, including making separation payments,
holding positions vacant, and allowing sta to be
absent. Tese changes generally are not reported
to the Legislature. Tus, it is not possible or the
Legislature to determine what priorities are not
being ullled due to the pressures associated withseparating employee leave balances.
iposes Fsal a Opeaoal
Sess o Soe depaes
Can Negatively Aect Departmental
Perormance. Te lack o budgetary transparency
also makes it dicult or the Legislature to
determine the extent o scal and operational stress
that these liabilities impose on state departments.
In our discussions with departments, we ound
that some perceive their ability to carry out their
responsibilities has been negatively aected by
large leave balances. For example, the Fair Political
Practices Commission advises us that it kept its
executive director position unoccupied or nearly
eight months because the ormer executive director
separated rom the commission with leave balances
approaching 70 percent o his salary. Te separating
employee burned o about two months o leavebeore separating rom the commission with a
separation payment worth over hal o his salary.
Similarly, CDCR indicates that it made separation
payments totaling $300 million between 2009-10
and 2011-12 and projects it will make more than
$100 million in separation payments in 2012-13.
Te CDCR indicates that these costs contributed
to its need to seek midyear supplemental
appropriations and its delay o special repairs and
other essential activities, actions that can increase
uture CDCR operating costs.
Sas maaeeEploee relaosHard to Allow Employees to ake All
Allowed Leave Days. Trough the recent urlough
programs, the state reduced employees pay with
the promise o giving them commensurate time o.
In some cases, however, workload considerations
caused management to deny state workers requests
or time oor led to workers not requesting the
time o. In these cases, because workers do not
receive the benet promised by management on a
timely basis, urloughs can negatively aect labor
relations. Longer term, strained labor relations
can impair the states productivity and the level
o service provided to the public. In addition, the
states reputation as an employer can be weakened,
aecting its ability to recruit and retain desired
talent rom the labor market.
ma Weae Pbl coee
maaee o Sae WooeLarge Dierences Between State and Other
Employers. Te public entrusts government to
eectively and eciently manage resources and
the workers it hires. In assessing governments
management o its employees, residents and the
media typically compare governments personnel
policies with those used in the private sector. When
residents and the media nd public sector personnel
policies that appear to be more generous than those
in the private sector, questions oen arise as to
whether government is spending public resources
wisely.
Te states personnel policies have led to large
dierences between the benets oered to state and
private sector workers when they separate rom their
employment. Specically, compared with private
-
7/29/2019 After furloughs: State workers' leave balances
16/28
A n L A O R e p O R t
16 LegislativeAnalystsOfcewww.a.ca.
sector employees, many state workers (1) receive
larger separation payments and (2) collect salaries
and earn benets (including more leave time) or
longer periods while burning o accumulated
leave. Te magnitude o the benets provided to
state workers is partly due to reasons that are notlikely to encourage public condence in the states
management o its workorce. Specically, as
administered by the state, the urlough program
did not reduce employee work time to levels that
would prevent rapid growth in leave balance
liabilities. In addition, the state has not enorced its
primary policy to contain these uture coststhe
cap on accumulated vacation/annual leave. Looking
orward, having state leave policies that are moresimilar to other employersand enorcedmay
give the public greater condence that the state is
eectively and eciently managing its resources.
OPtiOnS FOr tHE LEgiSLAturE
In this section o the report, we discuss options
available to the Legislature to reduce existing
leave balances and contain their uture growth.Most o the options involve dicult decisions
and trade-ossuch as those between incurring
near- and long-term state costs, and paying or
employee leave benets versus other orms o
compensation. In addition, many o the options
could have unintended consequences by modiying
employee behavior. Tere is no perect option.
Each option has limitations, and no one option can
resolve all o the concerns discussed in the section
above. In act, some o the options could address
some o the concerns while worsening othersor
example, reduce liabilities but urther erode public
condence.
optionSto reduce exiSting
leave BalanceS
Options Limited Due to Contract Law.
Te state is limited in what it can do to reduce
existing leave balances. Current law establishesthat employees have a vested, contractual right to
earnedcompensable leave. Tis means that once
an employee earns compensable time o, the state
cannot take it away without due compensation.
Te state must compensate employees or any
compensable leave that is already earned by
allowing employees to (1) take the time o or
(2) cash out the unused leave. Below, we discuss
two options available to the Legislature to reduce
existing leave balance liabilities. Tese optionswould reduce the states long-term liabilities, but
would reduce productivity or costs in the short
term.
Fos Aeo o depaes
Wh Lae Leae Balaes
Tere are many approaches the Legislature
could take to ocus attention on departments
with large leave balances. Below, we outline one
approach the Legislature could use in the current
budget cycle.
Spring 2013: Establish argets or Reducing
Leave Balances . . . Each department has
unique circumstances that led to its employees
accumulating large leave balances. o better
understand why employees have large leave
balances and what steps the state could take
to reduce these liabilities, legislative budget or
oversight committees could hold hearings withrepresentatives rom the Human Resources
Department (CalHR), Department o Finance,
and a representative sample o departments with
large employee leave balances. o establish a
baseline assessment o all departments and help
the committees identiy which departments should
attend the hearings, the State Controllers Oce
-
7/29/2019 After furloughs: State workers' leave balances
17/28
A n L A O R e p O R t
www.a.ca.LegislativeAnalystsOfce 17
could report on the number o employees in each
department with leave balances over a threshold
amount, such as 640 hours, and the current value
o this leave. Te purpose o the legislative hearings
would be to (1) identiy why these departments
employees have large leave balances and (2)establish reasonable targets or reducing these leave
balances by spring 2014 and uture years.
. . . But Give Special Consideration to
Departments With 24-Hour Operations. In
developing these leave reduction targets, we
recommend the Legislature be realistic about
departments with 24-hour operations. Specically,
unless the state provides more unding or sta
at these departments or changes their workload
requirements, it is likely that these departments
will incur increased overtime costs to give their
employees more time o. We also note that,
in some cases, paying overtime so that other
employees can use leave costs the state more than
allowing workers to cash out their leave (either at
the end o their career or through an authorized
buyback program). Te Legislature could use the
hearings to explore options specically oriented
towards these departments.Spring 2014: Assess Departments
Progress. During the 2014-15 budget cycle and
in subsequent years, CalHR could provide the
Legislature an assessment o the states progress in
reducing employee leave liabilities. Additionally,
departments could report their individual
progress at achieving the targets established by the
Legislature.
ise Bba Poa
Many public and private sector employers oer
leave buyback programs to reduce leave balance
liabilities. A buyback program gives employees
the opportunity to cash out some o their existing
compensable leave balances at their current salary
level. While a leave buyback program increases
employer costs in the short run, it reduces the
employers outstanding long-term liabilities.
State Has Oered Buybacks in the Past. While
the state has oered leave buybacks in the past,
CalHR indicates that it has approved only one leave
buyback program in the past ten years. ypically,buyback programs are limited to (1) specied
employees, (2) a period o time during which
eligible employees may cash out leave, and (3) a
maximum number o hours that an employee may
cash out. Te last authorized leave buyback was
available primarily to managers and supervisors
between April and June 2007. Eligible employees
could cash out up to 40 hours o compensable leave.
A department, however, could choose to urther
limit the number o hours employees cashed out i
departmental unds were limited. As discussed in
press reports, in 2011, the Department o Parks and
Recreation instituted a buyback program or which
it did not have authorization. Te department
cashed out about $270,000 o employee leave under
this unauthorized program.
Buyback Program Would Increase Short-erm
Costs, but Reduce Long-erm Liabilities. Te
Legislature could direct the administration toauthorize a leave buyback program. A buyback
program could be administratively established
or managers and supervisors, but probably
would need to be collectively bargained or
rank-and-le employees. Depending on how
many employees were eligible to participate in
a buyback program and how many hours they
could cash out, a buyback program could result
in signicant up-ront costs. For example, a
buyback program that cashed out all leave in excess
o the existing cap would cost the state about
$270 million (or $330 million i nonmanagerial
correctional ocers were included). o control
these costs, the Legislature would need to provide
the administration guidance as to the design o
the buyback program. Te Legislature also would
-
7/29/2019 After furloughs: State workers' leave balances
18/28
A n L A O R e p O R t
18 LegislativeAnalystsOfcewww.a.ca.
need to make decisions about how to und it. For
example, the Legislature could augment individual
departmental budgets to provide unding or the
expected costs or establish a separate item in the
budget to pay these costs or all departments.
Regardless o the unding mechanism, the costsassociated with a buyback program would reduce
the Legislatures ability to provide resources to
other programs in the state budget. Obviously,
because o the up-ront cost o a buyback program,
such a program would be easiest during years
without signicant budgetary constraints.
optionSto containgrowthin
future leave BalanceS
Signicant Flexibility or the State. Te
Legislature has a greater degree o fexibility to
implement options that containfuture ununded
liabilities rom employee leave balancesranging
rom changing budgeting practices to changing
leave policies. Because employees only have a vested
right to earned leave, the Legislature can change
leave benets on a prospective basis. Prospective
benet changes could be administratively imposed
on managers and supervisors, but probably wouldneed to be bargained or rank-and-le employees.
Because 19 o the states 21 MOUs with state
workers expire in July 2013, the administration
could incorporate mechanisms to contain leave
balance growth in labor agreements submitted
to the Legislature or ratication. We note,
however, that any action that reduces prospective
leave benets likely would put pressure on the
state to augment other components o employee
compensationsalary, pension, and health
benets.
ceae a use i o Lose i cap o Leae Aals
Te Legislature could create a strict cap on
prospective leave accruals. Te cap could give
employees the opportunity to use the time o
they earn, but minimize the states liabilities rom
compensable leave balances. Such a cap could
take many dierent orms. Most o the other
states we looked at have some orm o a strict
cap on the amount o vacation/annual leave that
employees may accumulate. Below, we describethe key elements o a cap that we think would be
reasonable.
Establish an Accrual Limit. Te limit should
allow employees to have fexibility to take time
o during the year but also be low enough to
minimize the states liabilities. Most o the states
that we looked at limit the amount o vacation/
annual leave that a state employee could carry
year-over-year to about 40 days. Tis is hal o the
limit established by the cap that currently applies to
most Caliornia state employees.
Speciy No Vested Right to Leave Above Cap.
Employees could continue to accrue a certain
amount o time o each month based on vacation/
annual leave accrual schedules; however, employees
would have no vested right to any time o received
in excess o the cap. For example, i the Legislature
adopts an 80-day cap, an employee with 80 days
o banked leave would still earn his or her normalvacation days, but these days would need to be
used beore the end o the year. Te employee could
only carry up to 80 days o leave year over year. For
reasons we discussed earlier, we note that it may be
dicult or employees at 24-hour acilities to use all
o the vacation/annual leave that they accrue in a
year. For these employees, the Legislature may wish
to set a higher cap or take other actions to contain
long-term liabilities, such as establish regular leave
buyback programs.
Pla caell Beoe g new
Flohs o moe te O
Inevitably, at some time in the uture, the
Legislature will consider proposals to urlough
employees or give them additional holidays or
-
7/29/2019 After furloughs: State workers' leave balances
19/28
A n L A O R e p O R t
www.a.ca.LegislativeAnalystsOfce 19
other paid time o. Our review indicates that any
additional time opaid or not paidcan result
in higher employee leave balances and larger state
liabilities. Below, we explain some actions that
the Legislature could take to minimize the eects
o additional days o on uture leave balanceliabilities.
When Considering Future Furlough
Proposals. Furloughs are a common tool used
by employers to reduce employee compensation
costs. o achieve savings, the employer reduces its
workers pay but increases their amount o time
o. Administering urloughs on specied days by
shutting down operations, like Furlough Fridays,
helps contain the growth in leave balances because
it orces employees to work ewer hours. Some o
the states largest departments, including CDCR
and CHP, have 24-hour operations, however, and
cannot shut down. Tus, extending a urlough
program to include their workers does not change
the amount o sta hours worked and, instead,
increases state leave balance liabilities. In these
cases, the Legislature has limited options. It can:
Exempt workers in these departments rom
the urloughan action that reduces by
more than 60 percent state General Fund
savings rom the urlough.
Reduce departmental workload or
requirements so that these departments
can operate with ewer workersan action
that would be dicult to implement in
many cases due to ederal, state, and other
requirements.
When Considering Proposals or Additional
Paid Days O. In general, giving state employees
additional paid days o augments their
compensation package without increasing state
costs in the short term. I the employees do not use
the additional paid days o, however, state leave
balance liabilities grow and the state makes higher
separation payments in the uture. Te Legislature
could minimize this potential scal eect by
speciying that employees have no vested right to
the new day. Tat is, it must be used in the same
year given and included within a strict cap on leave
accruals (discussed above).
cash O Leae Whe Eploees
tase depaes
Under current law, employees may not cash
out their leave when transerring rom one
department to another. Further, when an employee
separates rom state service, the department o
last employment is responsible or paying the
employees entire separation payment. As a result,
i an employee accrues a large leave balance while
working at Department A and then works one year
at Department B beore retiring, Department B
must pay the employees entire separation payment.
Tis can create signicant budgeting problems or
Department B. o ensure that state departments
realize the scal eects o their leave management
policies, the Legislature could allow employees to
cash out leave amounts above a certain threshold
when transerring to a new departmental employer.Tese early cash outs also would (1) reduce uture
state liabilities and (2) provide more timely
compensation to employees or leave they were not
able to use.
Pe Lables
Te state does not preund leave balance
liabilities but instead makes separation payments
on a pay-as-you-go basis. Te Legislature could
explore the option o preunding leave balance
liabilities. o preund these liabilities, the
Legislature would put money aside in a trust
undperhaps in the range o hundreds o millions
dollars each year initiallythat would be invested.
Te states contributions and any growth in the
und rom investments would be used to pay uture
-
7/29/2019 After furloughs: State workers' leave balances
20/28
A n L A O R e p O R t
20 LegislativeAnalystsOfcewww.a.ca.
separation payments. Annual contributions to this
und could be distributed across departments
similar to how the state preunds employee pension
benet costs. Because liabilities rom leave balances
are constantly changingemployees receive
pay increases, the size o the workorce changes,employees take o varying amounts o time year
to year, and so onthe amount that the state
contributes on an annual basis would need to be
determined through an actuarial valuation that
takes into account various assumptions. While
preunding these benets increases the states costs
in the short run, it would signicantly reduce the
states costs associated with separation payments in
the long run.
ree nbe o das O
Aalable o Eploees
Te states employee compensation package
provides employees a generous number o paid days
o each year. I the state were to reduce the amount
o time o included in the compensation package,
employees likely would use a higher share o their
compensable leave days in a given year. Tis would
result in lower leave balance liabilities in the uture,
but, as discussed earlier, likely would increasepressure on the state to increase other orms o
employee compensation.
Ealae Woloa a Saf Leels a
depaes Wh Hh Leae Balaes
Persistently high leave balances may indicate
that employees at a department do not take time
o due to high workload. Aer urloughs end in
July 2013 and the state workorce normalizes, the
legislative budget subcommittees may wish to
examine departments with high leave balances to
determine whether additional stang resources or
changes in statutory duties may be merited.
cOncLuSiOn
Most employers have scal liabilities related to
vacation and other leave that their employees have
earned, but not used. Tese leave balance liabilities
must be paid when an employee retires or separates
rom employment.
Te state o Caliornia has carried large leave
balance liabilities or decades. Te last ve years
o state employee urloughs, however, have pushed
its leave balances to unusually high levels. Our
review indicates that that the states leave balances
directly or indirectly have negative eects on the
state, including: imposing scal and operational
stress on departments, reducing transparency in
state budgeting, straining management-employee
relations, and weakening public trust in state
government. For these reasons, we recommend the
Legislature take steps towards reducing the states
leave balancesor at least containing their uture
growth. In this report, we describe several options
the Legislature could take to help achieve this goal.
-
7/29/2019 After furloughs: State workers' leave balances
21/28
A n L A O R e p O R t
www.a.ca.LegislativeAnalystsOfce 21
One Shape = One Day Per Month Off and a 4.62 Percent Pay Reduction
Correctional Officers and Engineers
Employees Represented by SEIU (Local 1000) and Managers
Maintenance Workers and Health Professionals
Firefighters
Highway Patrol Officers
2008-09: Furloughs Began
Figure A-1
July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June
In February 2009, the Legislature amended the 2008-09 budget to reduce funding for state employee
compensation, and directed the Schwarzenegger administration to achieve these savings through collectivebargaining or administrative actions.
Through executive order, Governor Schwarzenegger directed that state employees be furloughed two daysper month. Employees at 24-hour facilities were allowed to select their days off, a policy known as
self-directed furloughs. Other state employees initially were required to take off designated Fridays, butthen allowed to take self-directed furloughs.
Some departments, including California Highway Patrol, were not furloughed. Beginning in June, theDepartment of Forestry and Fire Protection also was exempted from furloughs.
APPEndix 1:
FivE yEArS OF StAtE EmPLOyEE WOrk
And PAy rEductiOnS (2008-09 tO 2012-13)
-
7/29/2019 After furloughs: State workers' leave balances
22/28
A n L A O R e p O R t
22 LegislativeAnalystsOfcewww.a.ca.
2009-10: Furloughs Increased to Three Days Per Month
Figure A-2
The 2009-10 budget included reductions in funding for state employee compensation and directed theSchwarzenegger administration to achieve these savings through collective bargaining or administrative
actions.
Through executive order, Governor Schwarzenegger directed that most state employees be furloughedthree days per month. Most state offices were closed three Fridays each month for the year.
Employees at 24-hour facilities continued to have self-directed furloughs.
One Shape = One Day Per Month Off and a 4.62 Percent Pay Reduction
Correctional Officers and Engineers
Employees Represented by SEIU (Local 1000) and Managers
Maintenance Workers and Health Professionals
Firefighters
Highway Patrol Officers
July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June
-
7/29/2019 After furloughs: State workers' leave balances
23/28
A n L A O R e p O R t
www.a.ca.LegislativeAnalystsOfce 23
2010-11: Furloughs Replaced by Personal Leave Program
Figure A-3
The 2010-11 budget included reductions to state employee compensation costs and directedthe administration to achieve these savings through collective bargaining or administrative actions.
Through executive order, Governor Schwarzenegger directed that most state employees be furloughedthree days per month until their bargaining units agreed to new memoranda of understanding (MOUs).
Initially, most employeesexcept those working in 24-hour facilitieswere required to take off specifiedFridays. In November 2010, the administration authorized all employees to take self-directed furloughs.
During the fiscal year, all employee bargaining units agreed to new MOUs. Most of the MOUs providedthat the employees would receive one self-directed, unpaid day off monthly for 12 months. The administration
also extended this policyknown as the Personal Leave Programto managers and supervisors.
In October 2010, the California Supreme Court ruled that (1) the Legislature must authorize any furloughsand (2) the budget language that had been used to reduce employee compensation costs tacitly approved
the administrations furlough programs.
One Shape = One Day Per Month Off and a 4.62 Percent Pay Reduction
July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June
Correctional Officers and Engineers
Employees Represented by SEIU (Local 1000) and Managers
Maintenance Workers and Health Professionals
Firefighters
Highway Patrol Officers
-
7/29/2019 After furloughs: State workers' leave balances
24/28
A n L A O R e p O R t
24 LegislativeAnalystsOfcewww.a.ca.
2011-12: Personal Leave Program Expired
Figure A-4
Each bargaining units Personal Leave Program expired 12 months after the bargaining unit agreed to a newmemorandum of understanding.
One Shape = One Day Per Month Off and a 4.62 Percent Pay Reduction
Correctional Officers and Engineers
Employees Represented by SEIU (Local 1000) and Managers
Maintenance Workers and Health Professionals
Firefighters
Highway Patrol Officers
July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June
-
7/29/2019 After furloughs: State workers' leave balances
25/28
A n L A O R e p O R t
www.a.ca.LegislativeAnalystsOfce 25
2012-13: Personal Leave Program and Furloughs Began Again
Figure A-5
One Shape = One Day Per Month Off and a 4.62 Percent Pay Reduction
The 2012-13 budget included reductions in funding for state employee compensation and authorized theBrown administration to achieve these savings through collective bargaining agreements, furloughs, and
the use of existing administrative authority over managers and supervisors.
Nineteen of the states 21 bargaining units agreedin addenda to their memoranda of understanding
to receive one self-directed, unpaid day off per month, a policy referred to as the Personal Leave Program.This policy was extended to managers and supervisors. The administration imposed one day per month,
self-directed furloughs on the two remaining bargaining units. Thus, for the 12 months of 2012-13, all stateemployees were subject to one self-directed unpaid day off per month.
July Aug. Sept. Oct. Nov. Dec. Jan. Feb. Mar. Apr. May June
Correctional Officers and Engineers
Employees Represented by SEIU (Local 1000) and Managers
Maintenance Workers and Health Professionals
Firefighters
Highway Patrol Officers
-
7/29/2019 After furloughs: State workers' leave balances
26/28
A n L A O R e p O R t
26 LegislativeAnalystsOfcewww.a.ca.
-
7/29/2019 After furloughs: State workers' leave balances
27/28
A n L A O R e p O R t
www.a.ca.LegislativeAnalystsOfce 27
-
7/29/2019 After furloughs: State workers' leave balances
28/28
LAO Publications
This report was prepared by Nick Schroeder and reviewed by Marianne OMalley. The Legislative Anal ysts Ofce (LAO)
is a nonpartisan ofce that provides fscal and policy inormation and advice to the Legislature.
To request publications call (916) 445-4656. This repo rt and others, as well as an e-mail subscription service,
are available on the LAOs website at www.lao.ca.gov. The LAO is located at 925 L Street, Suite 1000,
Sacramento, CA 95814.
A n L A O R e p O R t