2104 - Leave Buy-Back (Historical View)

** Effective: 12/16/2016 2:31:08 PM - 4/14/2017 2:25:23 PM **

Status: Active

Change Notes

Added link to PML 2016-032 in resources section.

Category

Leave

Audience List

Synopsis

This policy

Introduction

Leave buy-back allows employees to receive cash payment in exchange for applicable leave credits.  The Department of Human Resources may authorize an annual Excluded Employee Leave Buy-Back Program and will notify departments of the opportunity to participate.

Some Memoranda of Understanding (MOU) provide that a department head or designee will advise department employees whether or not funds are available for cashing out vacation/annual leave.

Statement

Excluded Employee Leave Buy-Back Program

California Code of Regulations, title 2, section 599.744 provides by annual determination the California Department of Human Resources (CalHR) may authorize an Excluded Employee Leave Buy-Back Program.  CalHR will notify departments when the program is being offered.  Payment for all leave hours are made using existing departmental appropriations, therefore when offered, each departments participation is subject to the availability of departmental funds.

Leave buy-back means that eligible employees in participating departments may receive payment at their regular salary rate in exchange for up to 80 unused leave hours.  Eligible leave may be a combination of vacation or annual leave, personal leave (personal leave 1992, 2003, 2010/11/12 and voluntary personal leave), personal holiday, or holiday credit.  Payments for all leave hours are made using existing departmental appropriations.

Employees designated Exempt, Managerial, Supervisory, Confidential, or otherwise excluded from collective bargaining in one of the following identifier codes are eligible to participate in this program:

Program Enhancement for Fiscal Year 2016/17

The current Program is being enhanced to allow excluded employees with vacation or annual leave balances in excess of 640 hours, as of December 1, 2016, the option to transfer future leave accruals into a Savings Plus 457(b) and/or 401(k) Plan account.  The Program will allow eligible excluded employees the option to transfer the number of leave accruals elected into Savings Plus, take a cash payment, or a combination of the two.  For the purpose of this new option, future leave accruals are either vacation or annual leave.

Employees may elect to transfer up to the number of hours they accrue during the January – May pay-periods, in increments of eight (8) hours, not to exceed 80 hours.  However, the actual number of hours converted will be subject to the number of hours approved by the state and authorized by each department.  If the Program is not offered, the CalHR-271 form becomes null and void and the employees leave accruals will be available for use.  If the Program is offered for an amount less than the employee elected, the lower amount of hours will transfer to Savings Plus based upon the following hierarchy: (1) 457(b) pre-tax, (2) 401(k) pre-tax, (3) 457(b) Roth, and (4) 401(k) Roth, in accordance with the employee’s election until each plan and deferral type is satisfied.  Excess leave accruals will be available for use.

As noted above, the option to transfer future leave accruals to Savings Plus is an enhancement to the existing Program.  As such, if departments are authorized to participate in the Program, employees may elect to receive the cash value for any excess leave accruals not already allocated to transfer to Savings Plus (up to the total hours authorized by the department).

For additional information, refer to the frequently asked questions (FAQ’s) below.

Represented Employee Cash Out of Vacation/Annual Leave

Vacation/annual leave cash out means that eligible represented employees in participating departments may receive payment at their regular salary rate in exchange for accrued vacation or annual leave.  Participation is limited to employees whose MOU specifically includes this provision.  Payment for all leave hours are made using existing departmental appropriations, therefore when offered, each departments participation is subject to the availability of departmental funds.

Each applicable MOU provides specific dates for the leave cash out.  Most MOU’s state on or before May 1 the department head or designee will advise department employees whether the department has available funds to participate.  In addition, most provide that employees must submit their written request to cash out leave in the month of May and departments are to issue pay in June.

The following MOU’s allow for annual cash out:

MOU’s that allow for annual cash out
Bargaining

Unit		Bargaining Unit NameNumber of Hours
2California Attorneys, Administrative Law Judges and Hearing Officers in State Employment20
6California Correctional Peace Officers Association80
7California Statewide Law Enforcement Association20
9Professional Engineers in California Government80
10California Association of Professional Scientists80
12International Union of Operating Engineers20
13International Union of Operating Engineers20

To participate, employees must have an appointment in one of the applicable bargaining units, work in a department with available funds, and be in the applicable bargaining unit at the time payment is issued to be eligible for the cash out.  Participation is limited to one time per fiscal year.

For tax purposes, payments will be ordinary income in the month that payment is made.

Departments are encouraged, to the extent operationally feasible, to allow employees to use their leave hours as they accrue rather than letting the leave balances accumulate as a future fiscal liability.

Application

Excluded Employee Leave Buy-Back Program

When leave buy-back is offered, the Department Certification of Funding and Participation Form for the Leave Buy-Back Program must be completed and returned to CalHR’s Personnel Services Branch prior to implementation.  Forms may be scanned and emailed to psb@calhr.ca.gov.  Departments must complete and return the form whether they participate in the program or not.

When leave buy-back is offered, departments must notify their excluded employees to advise whether the department has funds available and is able to participate.  Participating departments shall indicate the number of hours that may be bought back, not to exceed the 80 hour maximum.  Documentation of the employee notification shall be maintained by each department.

Eligible excluded employees who wish to participate in the leave buy-back program must submit an Excluded Employee Leave Buy-Back Request Form to an individual designated by the department.  Participation in the program is limited to once per fiscal year.

Payments under this program are subject to the flat tax method and garnishments, if applicable.  Instructions on how to process payments are issued by the State Controller’s Office.

Program Enhancement for Fiscal Year 2016/17

To participate in the Savings Plus option, all eligible employees wanting to participate must complete the irrevocable Transfer Future Leave Accruals to Savings Plus form.  Employees must submit the completed form to their Human Resources office by December 31, 2016.

Bargaining Units 2, 6, 7, 9, 10, 12, and 13 Vacation/Annual Leave Cash Out

The Department Certification of Funding and Participation Form for the Vacation/Annual Leave Cash Out Program for bargaining units 2, 6, 7, 9, 10, 12 and 13 must be completed and returned to CalHR’s Personnel Services Branch prior to implementation.  Forms may be scanned and emailed to psb@calhr.ca.gov.  Departments must complete and return the form whether they participate in the program or not, and departments must complete and return the form even if they do not have employees in the impacted bargaining units.

Departments must notify their bargaining units 2, 6, 7, 9, 10, 12 and 13 employees in the month of April to advise whether the department has funds available and is able to participate.  Participating departments shall advise employees of the number of hours that may be cashed out, not to exceed the allowable amount specified in the applicable Memorandum of Understanding.  Documentation of the employee notification shall be maintained by each department.

Eligible represented employees must submit an Employee Leave Cash Out Request Form during the month of May to an individual designated by the department.  Participation in the program is limited to once per fiscal year.

Departments will transact payment information on a flow basis and deduct the corresponding number of vacation/annual leave hours from the employee’s available leave balances.  All payments must be issued during the month of June, but no later than June 30.

Payments under this program are subject to garnishments, if applicable.  Instructions on how to process payments are issued by the State Controller’s Office.

Authorities

Resources

FAQs

Forms

PML

Web Pages

Authorized By

Contact Person

Personnel Services Branch
Personnel Program Consultant, , Personnel Services Branch
Phone: 916-323-3343
Fax: 916-327-1886
Email: psb@calhr.ca.gov

Superseded Policies

Not Applicable.