New Jersey may limit how public workers cash out unused sick time

Some public employees in New Jersey have been getting big payouts for unused sick time when they retire. A bill advancing in the legislature would impose some new restrictions cutting payouts significantly.

For decades the state has capped payouts at $15,000.

Assemblywoman Pamela Lampitt’s bill calls for ending cash payouts for leave time accrued after it is enacted. But the Camden Democrat said up to $7,500 of any amount already built up could be used for health care expenses for up to five years.

That sum, “over a period of five years, would be something that people could easily utilize to help offset their expenses and adjust to the new pocketbook of their retirement salary,” she said.

Police and firefighters would be more likely to call in sick as they approach that $7,500 threshold, said Robert Fox with the New Jersey State Fraternal Order of Police. “And he’ll be replaced by somebody for time and a half. So it’s just shifting the money,” he said. “It’s like a little bit of a shell game. You pay for it now, or you pay for it later.”

Public employee unions oppose the legislation, saying it would violate collective bargaining agreements.

Donna Chiera, the president of the American Federation of Teachers in New Jersey, said the sick day payout at the end of a career amounts to a savings account for public workers who don’t have big salaries.

“Because, when you retire on a pension and Social Security, it’s money that you need to lean on,” said Chiera.

Seth Hahn with the Communications Workers of America said most of the union’s members get less than $10,000 in accumulated sick leave payouts after working for 30 years or more.

“We consider this a fairly modest retirement benefit, not something that is bilking taxpayers,” he said. The biggest cashouts, according to Hahn, are from career political appointees.

When Assemblywoman Angela McKnight was in the corporate sector, she said, she either used her sick time or lost it.

“To have someone bank all of these hours, and then, at the end, they get this huge cash payout, it’s not fair to the public,” said McKnight, D-Hudson.