Liquidation of employee leave credits upon separation

Liquidation of employee leave credits upon separation
Source: A question of general interest submitted by a NYPPL reader

A NYPPL reader asks: "Should an employee be separated from his or her public employment what happens to the employees leave accruals? Is the municipality allowed to keep the money? Where does the money go?”

The most common types of leave accruals or credits that may be credited to an individual at the time of his or her separation are 1. Vacation Leave accruals, 2. Sick Leave accruals, 3. Personnel Leave credits; 4. Overtime credit, and 5. Compensatory leave credit.
.
The most common types of personnel transactions in which the question may arise are in the context of a resignation, retirement or death or upon termination for cause [see, generally, 4 NYCRR 23.1].

Less common are situations where the liquidation or use of leave credits is coupled with a leave of absence [see, for example, Civil Service Law §§71 and 72], a transfer [see 4 NYCRR 23.3], absence for military leave [see 4 NYCRR 23.2], a layoff, or a jurisdictional reclassification of an individual’s position [see, for example, Education Law §355.10(c).

The New York State Civil Service Commission's Rules for the Classified Service, 4 NYCRR 30.1, provides for the payment of certain leave accruals upon separation. Many local employees are subject to similar rules or regulations promulgated by a local civil service commission or set out in a collective bargaining agreement.

In addition, there may be provisions set out in an “employment contract” between a public employer and an individual that may be controlling as could be the case with respect to a contract between a school district and its school superintendent.

The State Commission's Rules basically provide that at the time of separation from State service, the employee or the employee’s estate or beneficiary, as the case may be, shall be paid in cash for unused vacation credits not in excess of 30 days. The Commission’s Rules, however, do not provide for the payment of unused sick leave* or personal leave credits [see 4 NYCRR 21.5(b)].

However, the Rules also set out two significant exceptions to such liquidation:

1. In the case of resignation, the appointing authority may require, as a condition for receiving payment for accrued but unused annual leave credit, that employee provide written notice of his or her resignation at least two weeks prior to the last day of work; and

2. No employee [subject to the Commission's Rules] who is removed from State service as a result of disciplinary action, or who resigns after being served with charges of incompetency or misconduct shall be entitled to compensation for vacation credits.

It should be noted that both these limitations apply only to "vacation accruals."

“Overtime accruals" and “compensatory time credit” are distinguished from vacation accruals, as they are provided as a result of work performed. As such accruals and credits are provided in lieu of cash compensation, they constitute "earnings" or "salary" for actual service rather than a fringe benefit such as "vacation leave credits" and up to 30 days of each may be liquidated in cash upon separation [see 4 NYCRR 23.3].

Under certain circumstances, however, it appears that the payment of vacation accruals will be madatory. For example, in Clift v City of Syracuse, 45 AD2d 596, the Appellate Division ruled that if an employee was refused permission to use his or her leave credits and was subsequently terminated, the individual was entitled to payment for his or her unused vacation accruals.

Another decision, Degnan v Constantine, 189 AD2d 423, illustrates the strict construction courts generally give to regulations involving the forfeiture of leave credits.

Degnan, a State Trooper, was eligible to retire when charges of misconduct were filed against him. In order to avoid a disciplinary hearing he "accelerated his original date of retirement."

After he retired Degnan asked for payment for the 30 days of unused vacation leave he had to his credit at the time of his retirement. State Police rejected his request, advising him that because he had resigned from service "in order to evade the charges pending" against him at the time his leave credits were, in effect, forfeited.

The Appellate Division ruled that "the clear and unambiguous language of [Division's] regulations requires that [Degnan] be compensated for up to 30 days of accrued annual leave...." as Degnan, faced with disciplinary charges, did not resign -- he retired instead.

The Appellate Division said that "it is axiomatic that an agency is bound by the language of its own regulations and cannot construe it in such a manner that the plain language on the face of the regulation is rendered meaningless."

In the words of the Appellate Division, "obviously had [the Division of State Police] intended that accrued vacation time be withheld in the case where a member retires during the pendency of disciplinary charges, the regulations would have so provided."

Another element to consider: the impact the Taylor Law. Does the relevant collective bargaining agreement set out the terms and conditions for the liquidation of leave credits upon separation? Could the liquidation of leave credits upon separation be deemed a "past practice" within the meaning of the Taylor Law? The answer is yes to both!

PERB has ruled that the liquidation of leave credits is a mandatory subject of collective bargaining and thus a unilateral changing of a past practice concerning the liquidation of leave credits in cash constituted an unfair labor practice [Center Moriches Administrators Association and Center Moriches UFSD, 28 PERB 3031].

Recent court rulings in which the payment of accrued leave credits upon separation was an issue include:

Boakye-Yiadom v Roosevelt Union Free School Dist., 25 Misc 3d 1226(A)
The decision is posted on the Internet at: http://www.nycourts.gov/reporter/3dseries/2007/2007_52657.htm;

Garrigan v Incorporated Vil. of Malverne, 59 AD3d 662
The decision is posted on the Internet at:
http://www.nycourts.gov/reporter/3dseries/2009/2009_01441.htm;

Hauptman v Village of Elmira Hgts., 23 Misc 3d 439
The decision is posted on the Internet at:
http://www.nycourts.gov/reporter/3dseries/2004/2004_24572.htm;

Matter of Curra v New York State Teachers' Retirement Sys., 18 Misc 3d 1144(A)
The decision is posted on the Internet at: http://www.nycourts.gov/reporter/3dseries/2005/2005_52354.htm; and

Matter of Palandra v New York State Teachers' Retirement Sys., 27 Misc 3d 1214(A)
The decision is posted on the Internet at: http://www.nycourts.gov/reporter/3dseries/2010/2010_50735.htm .

* Employees of the State as an employer retiring with unused sick leave credits may have the actuarial value of such credits applied towards the payment of contributions otherwise required for their NYSHIP health insurance premiums upon retirement [see Civil Service Law §167.4] and, in addition, may receive additional “years of service” credit in determining their retirement allowance [see Retirement and Social Security Law §41.3.j].

Governor Paterson signs Executive Order on Record Keeping Procedures and Policies

Governor Paterson signs Executive Order on Record Keeping Procedures and Policies
Source: Office of the Governor

On December 14, 2010 Governor David A. Paterson issued an Executive Order addressing the development and implementation of a records management policy for the Executive Chamber, including an archives retention schedule.

The Governor signed the Executive Order, 9 NYCRR 7.42, following his veto of S.6846/A.9928.

The Executive Order requires that a retention schedule be promulgated and made public. The schedule categorizes documents prepared in the Executive Chamber and sets forth a period for their retention and ultimate disposition. All records of historic and governmental significance will be preserved, published and made publicly accessible.*

A member of the Executive Chamber Counsel's Office is designated as the Records Retention Officer and will be responsible for coordinating Executive Chamber record retention activities.

The Governor vetoed S.6846/A.9928, also known as the Archives Bill. In his veto message, the Governor acknowledged the sponsors' efforts, but noted that the bill did not provide adequate protection for valued, centuries old governmental privileges that are indispensable to ensure unfettered, candid advice. The Governor also said the bill would have imposed significant and costly burdens on the Executive Chamber and would tip the balance of power between the Legislature and Executive by allowing the former immediate access to executive records, without imposing any comparable transparency requirements upon itself.

* The Counsel to the Governor will negotiate an agreement for storage of the information, and the circumstances on which it would be made available to the public. Executive Chamber records created during the Paterson Administration will be donated to Cornell University.

Determining on-duty status

Determining on-duty status
Cossifos v NYSERS, 275 AD2d 879

Clearly an individual who is disabled in the course of performing his or her duties may be eligible for accidental disability retirement benefits provided by a public retirement system of this state as a result of his or her being injured while on-duty. The critical issue to be determined in considering such claims, however, is whether or not the disabled employee was at work within the meaning of the statute providing for such benefits when he or she suffered the injury.

In the Cossifos case, the question to be resolved was whether an employee who was injured while eating lunch at the worksite was engaged in performing his or her duties for the purpose of eligibility for disability retirement benefits under the Retirement and Social Security Law.

Alexander Cossifos, a senior court officer, was eating his lunch in the court’s locker room when another court officer accidentally caused one of the lockers to fall on him. He applied for accidental disability retirement benefits.

The New York State Employees’ Retirement System [ERS] rejected his application for accidental disability retirement. It said that Cossifos was not working when he was injured and therefore he was ineligible for such benefits. In the words of ERS, Cossifos was on his off-duty lunch break at the time of the accident and was therefore not in service when his injuries were sustained.

Cossifos sued, only to have his appeal dismissed by the Appellate Division. The court said that there was substantial evidence in the record to support ERS’ determination. Among the facts relied upon by ERS in making its determination:

1. Cossifos’ lunch break varied from 45 minutes to two hours, at the discretion of the court.

2. Cossifos was permitted to leave the courthouse during his designated lunch period, provided that he returned to duty at the time indicated by the court.

3. There was nothing in the record to support Cossifos’ claim that he was performing his job duties during his lunch break.

4. Cossifos was not paid for the period of time he spent eating lunch and that his presence in the courthouse during his break was not required by his employment.

The Appellate Division concluded under these circumstances there was no basis to disturb ERS’ determination that Cossifos was not in service at the time of the accident and, thus he was not entitled to accidental disability retirement benefits.

The decision also notes that “[t]he fact that [Cossifos] was within the confines of the employer’s premises at the time of the injury and could have been summoned to assist in a work-related matter while he was on his lunch break does not warrant a contrary finding.”

Smith v City of Rochester, 255 AD2d 863, however, sets out one significant exception to the general rule that eating lunch is not work. Smith, decided by the Appellate Division, Fourth Department, involved a workers’ compensation claim.

Donna Smith, a city-parking monitor, challenged the denial of her claim for workers’ compensation as a result of her slipping on a wet floor while leaving a restaurant during her unpaid lunch break. The Workers’ Compensation Board ruled that Smith’s fall did not constitute an accidental injury in the course of her employment.

The Appellate Division affirmed the board’s determination, holding that lunchtime injuries are generally deemed to occur outside the scope of employment except under limited circumstances where the employer continues to exercise authority over the employee during the lunch break.

In another injury at the worksite case, Crockett v Safir, 269 AD2d 227, Appellate Division, First Department, the court rejected New York City police officer Donna Crockett’s claim that she suffered a line-of-duty injury when a mirror fell and injured her while she was brushing her teeth in the ladies’ room of a police building. The court sustained the police commissioner’s ruling that Crockett was not actually employed in discharging the orders of a superior officer at the time of the accident, as required by the statute.

Discrimination complaints and discipline

Discrimination complaints and discipline
Scroggins v Univ. of Minnesota, 8th Cir., 221 F.3d 1042

An employee files a discrimination complaint pursuant to Title VII against his or her employer. A short time later the employee is brought up on disciplinary charges, found guilty, and terminated. Is the employer guilty of retaliation against the employee in violation of Title VII? Stated another way, does the fact that an individual has filed a discrimination complaint mean that he or she may not be disciplined until the discrimination complaint is resolved?

In the Scroggins case, the U.S. Circuit Court of Appeals, Eight Circuit, decided that the fact that James Scroggins, an African-American, was terminated shortly after he filed a human rights complaint against the University of Minnesota did not mean that the University automatically violated the anti-retaliation provision in Title VII.

Scroggins was employed by the University as a custodian. He was counseled and disciplined on a number of occasions. Ultimately he was fired after being found guilty of sleeping after his break time had ended. This disciplinary action occurred just two weeks after Scroggins had filed his Title VII discrimination complaint against the University.

The Circuit Court characterized the fact that Scroggins was fired just two weeks after filing a discrimination charge as mere coincidence, rejecting his allegation that the disciplinary action against him was racially motivated and that his dismissal retaliatory. According to the court, the University had demonstrated that it had a valid, nondiscriminatory reasons for firing Scroggins.

Scroggins, on the other hand, said the court, did not offer any proof that the reasons given by the University for terminating him were pretextual.

Citing Kiel v Select Artificials, 169 F.3d 1131, the court pointed out that more than a showing that the termination occurred shortly after the individual had engaged in protected conduct, i.e., filing discrimination compliant with EEOC, is required. The individual must show that there is a factual issue of retaliation if his or her cause of action is to survive a motion for summary dismissal.

The court’s rationale: anti-discrimination statutes do not serve to insulate an employee from being disciplined for violating the employer’s work rules or disrupting the workplace.

Modifying a disciplinary procedure

Modifying a disciplinary procedure
NYC Transit Auth, v PERB, 276 AD2d 702, Motion for leave to appeal denied, 96 NY2d 713

The New York City Transit Authority case demonstrates the fact that neither an employer nor an employee organization may unilaterally modify a statutory or negotiated disciplinary procedures. Where such changes are desired, they are subject to the collective bargaining process set out in the Taylor Law.*

The case started after the New York City Transit Authority and the Manhattan and Bronx Surface Transit Operating Authority [TA] unilaterally adopted new rules setting out revised standards and penalties with respect to convictions, moving violations, and motor vehicle accidents involving TA bus drivers.

Contending that these changes imposed rules that were more stringent than those they replaced, the Amalgamated Transit Union, Divisions 726 and 1056 and Local 100, Transport Workers Union of America [Union], representing TA employees affected by the change filed an improper practice charge with PERB.

PERB’s Administrative Law Judge [ALJ] rejected TA’s argument that the revised standards and penalties were qualifications to be satisfied before becoming a bus driver and thus not terms and conditions of employment for the purposes of the Taylor Law.

The ALJ held that the changes imposed by the TA constituted terms and conditions to be satisfied to continue employment as a bus driver rather than qualifications for employment. Accordingly, concluded the ALJ, the changes made by the TA were a mandatory subject of collective bargaining under the Taylor Law.

The bottom line: the ALJ ruled that TA’s refusal to engage in negotiations prior to before imposing the revisions violated the mandates of Section 209-a.1(d). TA appealed but PERB sustained its ALJ’s decision, noting that since the revised standards carried a disciplinary component, they were mandatory items of negotiation and thus TA should have first entered into collective negotiations with the Union concerning these changes.

PERB issued its ruling that the TA had violated Section 209-a.1(d) of the Civil Service Law Section by unilaterally implementing new disciplinary work rules and penalties. Finding that PERB’s decision was neither irrational, unreasonable, nor affected by any error of law, the Appellate Division, Second Department, sustained the ruling and dismissed the TA’s appeal.

* Section 76 of the Civil Service Law and Section 3020-a of the Education Law authorize the negotiating an alternative to the disciplinary procedures set out in those law pursuant to the Taylor Law. For information about PELP's The Discipline Book, go to: http://thedisciplinebook.blogspot.com/