Clark and Washoe counties currently owe public employees more than $600 million in unpaid sick leave and vacation time, according to a recent newspaper investigation that concluded this debt had grown 26 percent between 2007 and 2017.
The Las Vegas Review-Journal's numbers didn't come as much of a surprise to the Nevada Policy Research Institute (NPRI), which has been tracking public employees' overtime and other benefit payouts through its government transparency project at TransparentNevada.com.
“It's an issue we've looked at quite a bit because it's pretty widespread in government,” NPRI spokesman Michael Schaus told Watchdog.org. “... The idea that you can bank unused sick leave time in perpetuity and then cash it out before you retire – it tends to take most government employers by surprise when somebody's accumulated a lot and decides to retire.”
Among all U.S. employers – private companies, government agencies and non-profits – only 14 percent offer workers a cash-out option for vacation leave, while 5 percent allow cash-outs for sick leave, according to a 2017 employee benefits survey published by the Society of Human Resource Management, which is headquartered in Alexandria, Va.
The practice of allowing public employees to accrue vacation time and sick leave benefits with no time limits is common among government agencies, including those in Midwestern states such as Ohio and Illinois.
“Most private-sector employers will limit how much leave you can accumulate ... and this is exactly why,” Schaus said.
Supporters of such benefits policies, including labor unions, argue that such incentives are needed to encourage valued workers to remain in their positions. At one time, according to Schaus, the idea made sense because the public sector used to pay less than private companies. That's no longer the case, he said, so there's not a huge need for such extravagant benefits.
“I do know that there are a lot of county and other government agencies that have discussed putting an end to it,” he said. “... It really does wreak havoc to their budgets.”
The Transparent Nevada project has identified numerous instances of abuse involving overtime benefits as well as other public employee perks, according to Schaus.
“This is one of those things that we bring up almost every year,” he said.
If public employees in Clark or Washoe counties decide to sock away unused hours for sick time or vacation leave, they will be valued based on the workers' final salaries, not what employees earned when they opted not to use the benefits, according to critics of the policy. So the longer the unused hours are held, the more they tend to be worth.
“That is an amount that is going to go up as people get pay raises and what have you,” Schaus said. “... It's going to be sticker shock if we see a lot of retirements in the near future.”
One Clark County deputy district attorney who retired in 2017 tripled his final salary with the help of unused sick leave cash-outs and unused vacation days, according to an April post on the NPRI website. The employee, who had yearly compensation of $162,000, was able to parlay his pay to about $475,000 last year, in part, by cashing in unused benefits to the tune of more than $217,000, according to Robert Fellner, NPRI's director of transparency research.
The county's total worker compensation stood at nearly $790 million last year, 3 percent higher than what it was a year earlier, according to Fellner's numbers.
Since 2013, Clark and Washoe counties have had to pay retiring workers $215 million for these unused benefits, according to the Review-Journal analysis.
Despite such reported findings, there hasn't been a wellspring of opposition to the policy on unused sick pay and vacation time, according to those within government.
“Currently, there has been no discussion with the Board of County Commissioners with regard to what direction Washoe County is taking with negotiated items, such as benefits, vacation and sick articles,” the county's acting director of human resources, Patricia Hurley, said in an email to Watchdog.org. “We are unaware what associations have an interest in negotiating, as negotiations have not begun. Bargaining sessions are not scheduled to begin until 2019, due to contracts expiring on June 30.”
The need to provide such benefits can vary depending on the circumstances in individual counties, according to Dagny Stapleton, executive director of the Nevada Association of Counties.
“I can tell you that in some of our rural counties, we've definitely seen positions go unfulfilled or seen high turnover when they aren't able to offer competitive salaries or benefits, especially when you look at comparable private sector jobs,” Stapleton told Watchdog.org.
Counties provide essential public services to residents, including the operation of elections and the justice system, as well as maintaining infrastructure, she said. So it's important that government agencies have adequate incentives to retain those in key positions, according to Stapleton.
“For our members, it's about how do you provide the benefits earned and incentives to allow those folks to have long careers and so the counties can provide services to their community,” she said.