Payments for vacation credit upon retirement or resignation must be authorized by formal resolution by the governing body
Decisions of the Commissioner of Education, Decision #11173
A board of education resolution appointing its school superintendent included a clause stating that the superintendent would "continue to receive and be eligible for all contractual benefits accrued over his years of service with the District."
When the superintendent resigned he expected to be paid for his accumulated but unused vacation credit and had submitted his resignation "subject to (his) vacation pay." The Commissioner of Education, however, ruled that this was not sufficient to overcome the need for the type of formal resolution required by §92 of the General Municipal Law.*
After holding that paying prior administrators for unused vacation could not be relied upon to support such a payment, the Commissioner concluded that the Board's resolution appointing the superintendent "is not the type of resolution contemplated by §92" as is was not "an act clearly declarative of the will of the Board...to pay any administrator cash in lieu of unused vacation." The Commissioner also ruled that the superintendent had not proved the existence of an "oral contract" to provide for such a payment.
Typically §92 is strictly construed as it expresses a statutory exception to the prohibition against gifts of public monies set out in Article VII, §7 of the State Constitution. Accordingly, the resolution authorizing expenditure such as those to "liquidate" vacation credits**must be clear and unequivocal.
Where a contract, such as one resulting from Taylor Law negotiations, provides for such payments, the prevailing view is that such payments are lawful.
* §92.1 of the General Municipal Law, in pertinent part, provides that “Notwithstanding any other provision of law, any such governing board or mayor may also in like manner provide for cash payment of the monetary value of accumulated and unused vacation time or time allowances granted in lieu of overtime compensation standing to the credit of its officers and employees at the time of their separation from the service, or in case of death in service, to be paid to their beneficiaries.”