Sick Time Payout At Termination

rfrettoloso · March 2003

My company has a policy of paying terminiated employees for their accrued sick time when we terminate them, but we don't pay this to employees who resign. Resigning employees only receive accrued vacation. Does anyone else have a similar practice?

Thank you,
Rose

Gillian · March 2003

I expect that you will get a bunch of "no's." It is not common, at least in the private sector, to pay out unused sick leave. Company policy covers this issue and you can have any kind of policy you want. It is very unusual to reward those who are terminated more than those who resign.

jimlegal · March 2003

Our policy is that we only pay for unused sick leave at retirement. If a person is terminated or resigns with unused sick leave, they loose it. Our policy also defines that sick leave is only to be used for illness, not personal days, doctor appointments, dental appointments, etc. We also have a cap on the maximum amount of sick leave days you can accrue. With regard to sick leave you write the policy, you wish to enforce. Wish you well with your situation.

ray a · March 2003

When employment is terminated, for whatever reason, personal and vacation time accrued during that calendar year is paid out. We do not allow employees to carry over accrued time from year to year. At the end of the year we reimburse up to 5 days of combined accrued time, the rest is forfeited.

Terri · March 2003

We are very fortunate here. At termination or retirement, we pay all vacation, personal time accrued and 1/2 of the sick time up to 480 hrs.

Don D · March 2003

Well, I was going to say I agree with all the other posters until I read Terri's. With the exception of state government, which at retirement will convert sick and other time to years of service, I've not known of any company which does any sort of sick leave payout. That seems to be tossing money into a twister. If the thought is that such a policy will encourage them to not take sick leave when they know they are going to terminate, the counter to that is that they aren't going to be worth much anyway if they're on the verge of termination, so let them burn it.

HR in PA · March 2003

Upon termination, resignation or retirement, we pay all accrued time to the employee. This includes all sick, vacation and personal time that is outstanding. Employees are allowed to accumulate up to 30 sick days in their bank. There is no cap on vacation/personal time accrual.

Terri · March 2003

Don, you are right. We are a quasi-municipality. When I was first hired, we were able to accrue sick time up to 1440 hrs. Upon retirement, employees were paid 1/2 of anything over 720 hrs. The State Retirement system would take all hrs. not compensated and apply them toward earnable credits for retirement. However, that policy has changed. Anyone who had over 480 hrs accrued was paid 1/4 of its worth up to 720 hrs., then 1/2 for anything over 720 hrs. The rest went bye-bye and the employees can only accrue up to 480 hrs now. A lot of employees lost their earnable credits for retirement.

Terri B · March 2003

This is another advantage to a PTO system. We do pay all awarded PTO (it is accrued each pay period and awarded on pay day) when employees resign and give the required notice (2 weeks for hourly and 4 weeks for exempt). All others forfeit. We do not have to distinguish between different pay types. A great advantage. We also have a donation and conversion policy.

Mentel · March 2003

I would never 'require' two weeks or four weeks notice to get paid out benefits. This jeopardises your employment-at-will status. We pay out accrued vacation but not sick days. They always disappear at any kind of termination.

Terri B · March 2003

We have not had a problem with requiring the notice in any of our court cases. We have a union. The union accepts it in the contract. Oh, and (I forgot) registered nurses have to give 4 weeks notice to leave in good standing but 2 weeks notice to get PTO. This has not been an issue with our employees or the courts (even for non-union employees).

terryb · March 2003

As a local government, we earn 10 hours sick leave per month which can be used for doctor's appts. and injury or illness. We lose it all when we leave (under any circumstances), however once a year we have the option of converting any hours over 80 for half the amount in annual leave. Also, if someone has a catastrophe other than worker's comp, we have the option of donating sick leave to them.

Pork · March 2003

Sorry "Dandy Don" you'll now know one for we pay out our sick time annually and whatever has been awarded and not used by the employee. I, like you, was shocked at the company when I came on-board and tried to change it with the Headquarters in NC. The owners had a different opinion about the subject and i was told not the rock the boat. I expressed my disagreement of the waste with the corporate HR and have "shut-up" ever since. Pork

crawfod · March 2003

I now work for a City government and we pay out sick leave only upon termination under a couple of formulas: Under age 62=0%, 62=20%,63=30%,64=40%, 65+=50%, or, 20 years service=20% and so on up to 30 years service=50%, whichever formula is more favorable to the employee. There is no cap on the hours. Our employees accrue 8 hours per month (96 hours per year). They get paid out at the end at their termination rate of pay. A few will take the lump sum, but others will take it spread out over future weeks. (They are still terminated for all other benefit purposes.)

Although sick leave was not looked upon favorably in my career in private industry, I have been pleasantly surprised by the success of sick leave here. Our employees do not abuse it, even though we don't require proof of illness until they're out 3 days or more, and 75% of our workforce (270 total employees) have enough leave built up to cover 4 weeks of absence. Plus it is a nice financial windfall when they terminate, and if they have built up a lot of hours, it's because they have not been absent very much, which is to our advantage.

Sick Time Payout At Termination

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