Flannery: Vacation Time Should be Paid at Accrual Rate

Gov. Chris Christie has urged legislation to —and Bridgewater Township Mayor Patricia Flannery said she believes it would be a good plan.

“We should be supporting what he is proposing for new hires, from state to local hires,” she said.

According to the state’s calculations, Bridgewater Township currently has $2,445,806 in accumulated sick and vacation time, which translates to a $119.34 cost to an average home in town if it were to be paid out all at once.

According to Flannery, Bridgewater Township eliminated terminal pay in 2006, but all contracts have stipulations for some days.

“As employees earn and take vacation, sick and comp time, it fluctuates so the number is never static,” Flannery said. “The $119 per homeowner would only happen if it were all paid out at once, which would obviously never happen.”

“Each year when preparing the budget, we make an educated assumption as to what our payout for that year will be,” she added.

According to Christie, liabilities for unused sick and vacation day benefits total more than $825 million across the state.

Flannery said she would be more supportive of a plan that allows people to be paid for vacation time at the rate from the year in which it was incurred.

“Some vacation time is appropriate, employees have earned that,” she said. “We can’t just eliminate the pay.”

But, Flannery said, it is inappropriate that if an employee is hired at age 25, he or she gets paid for leftover vacation time at its rate when that person retires.

Employees should not be paid more than what the vacation time was worth when it was accrued, Flannery said.

“If you had to put it aside, you would have to be paid for it from that year,” she said.

Basically, Flannery said, when budgets are put together at the beginning of a year, the government determines exactly how much it will need to pay out over the course of the year, and that includes for benefits.

“Each year, when preparing the budget, we make an educated assumption as to what our payout for that year will be,” she said. “What it would be used for would depend on that budget cycle. It could be road improvements, holding the line on taxes, funding increased utility bills.”

“Each year has its own set of numerous budget incomes and expenditures to be considered,” she added. “One item never directly offsets another.”

But if an employee asks for a payout of vacation time from years before, expecting to receive the current costs of the payout Flannery said, that money was not budgeted.

“It is not right when you tell an employee you will give them benefits, but then let someone else pay for it later,” she said. “We have liabilities, and then maybe we can’t pay for a road that year.”

“The bottom line is sick time was never negotiated to be extra pay, and it should not be treated as such,” she added.