Sick and Vacation Leave Benefits Policies Work Group Report - - PowerPoint PPT Presentation

CITY OF MINNEAPOLIS

Sick and Vacation Leave Benefits Policies Work Group Report

Committee of the Whole JUNE 14, 2017

Charge to Work Group

May 2016 Internal Audit report:

• Potential risks/costs related to extended use of sick and

vacation leave prior to retirement

• System access termination at time of separation not timely

May 2016 Council staff direction:

• Staff work group to “examine the benefits and risks in the

City’s current sick and vacation leave policies in order to determine if modifications are warranted”

• Members: City Attorney, City Coordinator, Finance, HR, IT,

Internal Audit, plus two labor representatives

1

Research and Analysis

• Examined historical and future projected costs of leave payouts
• Reviewed applicable city policies and labor contracts
• Surveyed other cities and counties
• Analyzed actual pre-retirement leave usage trends over last 5 years

2

Findings

Annual and project future costs for leave payouts are stable:

3

Findings

Labor contracts mostly consistent, with a few exceptions:

• Minimum sick leave accrual requirement
• Allocation of payouts to health care spending plan vs.

direct lump sum payout to employee

• Pre-retirement notification by the employee
• Limitations on management authority to deny pre-

retirement vacations [MERF]

4

Findings

Minneapolis’ leave payout policies generally consistent with other jurisdictions surveyed:

• Like Minneapolis, most responding jurisdictions indicated they had no cap
• n sick leave accruals, but did have a cap on vacation accruals
• 43% of responders indicated that they pay ‘a portion’ of accrued sick leave

upon retirement [Minneapolis pays 50%]

• Most jurisdictions reported that they do allow employees to use accrued

sick/vacation time just prior to retirement, many on a “case by case basis”

• Less than half of the responding jurisdictions have a PTO program, many
• f which are limited to management or non-represented employees

5

Findings

Overall the use of extended pre-retirement leaves is generally low:

6 # Of Employees Separated Number* Percent Number * Percent Number * Percent Number * Percent 2012 212 3 1.4% 28 (3) 13.2% 9 4.2% 25 (4) 10.4% 2013 244 7 2.9% 40 (4) 16.4% 10 4.1% 43 (4) 18.0% 2014 282 8 (1) 3.2% 31 (4) 11.0% 18 (1) 6.4% 36 (4) 12.8% 2015 283 11 3.9% 32 (3) 11.3% 17 6.0% 26 (3) 9.2% 2016 288 13 4.5% 23 (1) 8.0% 15 5.2% 27 (3) 9.4% Total 1,309 42 (1) 154 (15) 69 (1) 157 (18) Average 261.8 8.4 3.2% 30.8 11.8% 13.8 5.3% 31.4 12.0% *Numbers in parentheses are MERF employees Source: COMET; Run Date 4/11/17 Table 1 Used Two+ Weeks of Vacation Leave Usage During Final Month prior to Separation Employee Sick and Vacation Usage Immediately Prior to Separation Used One Week Sick Leave [excluding FMLA] Used One Week Vacation Leave Usage During Final Week prior to Separation Used Two+ Weeks Sick Leave [excluding FMLA] 2012 - 2016

Findings

But variations exist across departments:

7

# Of Employees Seperated Used Two Weeks Sick Time (Excluding FMLA) % Using Two Weeks Sick Time Used Two Weeks of Vacation % Using Two Weeks Vacation Time % Using Either Two Weeks of Sick OR Vacation Fire 90 [61] 33 36.7% 11 (1) 12.2% 40.0% Public Works 287 11 (1) 3.8% 61 (14) 21.3% 26.8% Finance and Property Services 80 1 1.3% 12 (2) 15.0% 25.0% Police 269 16 5.9% 32 11.9% 20.8% Numbers in [] brackets are Fire Department employees with 54.6 hour workweeks. Numbers in () parentheses are MERF employees. Source: COMET Run date 4/11/17

2012 - 2016 Departments with largest percentage of Separating Employees using Significant Leave Time Prior to Separation Table 2

Action Steps

• HR, Finance, and IT will roll out a more coordinated and timely

protocol for termination of access to city systems upon retirement - October 2017

• HR will develop more consistent citywide protocols and

training for supervisors about appropriate pre-retirement sick and vacation leave usage; will take into account operational needs – 1st quarter 2018

• In early June HR issued an RFP to explore outsourcing of leave

administration for 2018

• HR will review variations in sick/vacation leave policies across

the city’s 24 labor contracts and address as appropriate in future labor contract negotiations

• HR to return within 120 days with progress report

8