McDonnell Works witih Labor Groups, Not Legislature, for Time-Off Reform

By Peter Smith, Virginia Statehouse News Tuesday, December 06, 2011

ALEXANDRIA - Gov. Bob McDonnell has turned to an administrative department head and a group of state workers for a way to curb the $330-million bill the state faces in unused time off racked up by state employees.

“Our leave today is an unfunded liability,” said Department of Human Resources Management Director Sara Wilson, who is spearheading the reforms. “If everybody cashes in on earned time off at the same time, we do not have enough money left in the pot to pay for that.”

Baby boomer state workers have racked up $34.1 million in unused time off — more than four times higher than the $7.7 million spent in 2010, according to the state Department of Human Resources Management, or DHRM.

The system allows employees to hoard up to 400 hours, or 50 workdays, of unused vacation and sick time each per year. That time can be cashed out upon retirement.

A DHRM work group headed by Wilson is weighing a proposal to cap all paid time off cash-outs at 120 hours. The existing system allows employees to cash out up to 336 vacation hours, as well as 25 percent of unlimited accrued sick time.

The work group proposal also would consolidate vacation time and sick leave into a general category of paid time off, or PTO.

McDonnell is keeping the issue away from the General Assembly. Despite recommendations from his hand-picked Commission on Government Reform and Restructuring to institute caps and create a paid time-off system, the governor left them out of his reform proposals to the General Assembly.

Instead he issued a broad executive order to DHRM, requiring it to "streamline" the system to achieve reform. The work group has been left to figure out the specifics.

The move allows him to work around the General Assembly, which rejected similar reforms in 2011.

In January, Delegate Barbara Comstock, R-Fairfax, proposed replacing state laws governing paid time off cash-outs with a set of guidelines designed by DHRM, but the bill never made it out of the Appropriations Committee.

The American Federation of State, County and Municipal Employees, which represents several thousand state workers, said it hopes the working group's caps will meet a similar fate.

"Having a cap is a disincentive to savings," said AFSCME Executive Director Charles Smith. "You want incentives for workers not to take unnecessary sick leave."

Other labor groups have been more willing to work with the governor. Members of the Virginia Governmental Employees Association, or VGEA, which represents 20,000 state workers, are involved in discussions with DHRM.

VGEA Executive Director Ron Jordan said that although employees do not support all of the administration's changes, progress is being made.

“The administration's been good at working with us on this,” he said. “The VGEA supports leave simplification, but in a way that does not hurt employees.”

The input of state workers and VGEA representatives on the working group has resulted in tentative compromises to help state workers. The proposal says workers can cash out the paid time off they have accumulated.

McDonnell’s move avoids General Assembly rejection, but it also makes for only temporary reform. McDonnell's executive order could be struck down by future governors and does not cover personal and family leave, which is written into state law.

"This is really only a first step to overhauling the system," said Mike Thompson, president of the Thomas Jefferson Institute for Public Policy, a nonpartisan, conservative nonprofit. "What you really want is the legislation," rather than executive order.

The McDonnell administration has not ruled out incorporating some aspects of the reform into General Assembly proposals.

"Nothing is finalized. We could see some of these reforms come up in the governor's legislative agenda this session," McDonnell Deputy Policy Adviser Jeff Palmore said.

With or without legislative approval, Wilson said the work group is on target to meet its own deadline for implementing a new system on Jan. 1, 2013.