Most New Jersey public workers would no longer be paid for future unused sick leave and would only be eligible to get $7,500 to pay for healthcare expenses after retirement under legislation that has begun moving through the Legislature, despite complaints from angry union leaders.
There are powerful backers behind this new effort to get control of the $1.9 billion in unused leave owed to thousands of police officials, public workers, teachers, and school administrators. The goal: provide some relief to property-tax payers. Senate President Stephen Sweeney (D-Gloucester) and Assembly Speaker Craig Coughlin (D-Middlesex) are co-sponsoring the measure in their respective houses.
But union officials did not try to contain their outrage during the Assembly State and Local Government Committee hearing last Wednesday during which the bill (A1851) was discussed and unanimously released. They said public workers have been sacrificing for years and many are now taking home less than they did a decade ago due to pay freezes and increased payments for health insurance and pension costs. They also said they did not expect another benefit cut and attack on collective bargaining to come from a Democratic-controlled state government.
“There’s no definition of Democrat that does not say, ‘supports labor,’” said Pat Colligan, president of the New Jersey State PBA, which represents 33,000 police officers. “I’m befuddled seeing a Democratic Legislature and Democratic governor and having to deal with this in my inbox.”
Colligan and others also called the move unnecessary, because current law already caps accumulated sick leave payments at $15,000 for all public workers hired after 2010.
Don’t bank on it
Under the bill, everyone would be able to keep whatever amounts they have earned up to the effective date of the law. Those who had already saved up at least $7,500 would earn no more. Those who have not, and new hires, would be able to bank up to $7,500 in sick time, but most would not be paid for it. Instead, individuals could use the value of their accumulated sick time to pay for either health insurance premiums or copays over the first five years after retirement. Only veterans could receive a cash payment for future unused days.
The legislation would have no impact on banked amounts already earned by workers because the attorney general’s office has stated those amounts cannot be capped, said Assemblywoman Pamela Lampitt (D-Camden) and bill co-sponsor.
“Whatever number of days you have and whatever value it’s worth, that’s yours to keep; we can’t touch that,” Lampitt said. “For nonunionized workers, zero means zero. For unionized employees, whatever they have today is what they will get. They can earn more, use it and get paid when they get sick, but for the rest of the days zero means zero.”
She said it is necessary to limit the practice of banking sick days and getting a lump sum payout for unused days on retirement because it has led to abuse and has saddled local government with onerous payments. There is no requirement for local governments to set aside even a portion of their sick-pay liabilities, so when a large payout comes due, it can force them to use emergency appropriations or borrow money to cover the cost. Lampitt cited for the committee examples reported by NJ Spotlight: Jersey City public workers had amassed $116 million in banked days last year and when the former chief retired, he was due $512,000 in unused days; the total owed by Newark to workers was $52.5 million.
“We’ve heard the stories in the paper. We’ve heard the stories in our own towns,” she said.
The legislation has been pending for many years, but was rejected by former Gov. Chris Christie, who said he wanted to end the practice entirely.
“It was biting off the nose to spite the face at that point in time, because too many of our employees today have accrued more sick time that will have to be paid out by their employers,” Lampitt said. The assemblywoman said she did not have a fiscal estimate of how much the bill might save but estimated the savings would be “significant.”
Union leaders argued that the average worker is not the problem and relies on these payouts to help make ends meet once off the public payroll, or to use to pay such expenses as the down payment on a home.
“We consider this a fairly modest retirement benefit, not something that is bilking taxpayers,” said Seth Hahn, New Jersey legislative and political director of the Communications Workers of America, which represents 45,000 public-sector workers in the state. He said no CWA public contracts allow workers to get more than $20,000 for unused days on retiring and on average, workers leave with less than $10,000 after 30 years.
“There is abuse, but it is the career political appointees who make way too much money in politically appointed jobs and somehow miraculously work 35 years in those jobs and never once have a single sick day and get a huge payout at the end of their careers,” he continued. “Deal with those people.”
‘Every time a chief retires …’
“Every time a chief retires, a new bill gets introduced in the Legislature,” said Colligan. “Eventually, everybody is going to be capped at $15,000 … Those six-figure numbers are not coming from the PBA locals. Over 1,000 cops retire every year. None of them make the paper.”
The committee amended the bill to try to stop six-figure payments to police chiefs and superior officers, school superintendents and high-paid municipal workers, adding a provision that would prohibit future lump-sum payments for unused sick days to non-unionized employees.
Robert Fox, president of the New Jersey State Fraternal Order of Police, suggested allowing police and firefighters to cash in 10 unused days each year and use the money to pay their health insurance premiums.
“Do something like that in the bill so that nobody gets hurt and the big payments stop,” he said.
Not a retirement bonus
But Lampitt said the purpose of sick days is to allow people to take time off from work when they are sick and not to serve as a retirement bonus or for any other purpose.
“I believe sick days are days to utilize when people are working,” she said. “I don’t think they should have any cash value so I am at zero to be honest with you. Those private-sector employers who we just gave those five sick days to have no cash value to them upon their departure.”
Fox said that if the Legislature takes away the ability of police officers to be paid for unused sick days on retirement, they will take the days and it costs more to replace an officer who is out sick with another officer being paid overtime for working extra hours than it does to simply pay the officer for the days on retirement.
“Politically, it looks great, but on the street and in municipal budgets, the overtime rate goes up every time they use sick time,” he said. “If we get paid for a ‘bene,’ these guys are gonna use these benefits, no matter what.”
“The point of sick days is to use them when you are sick,” said Assemblyman Ryan Peters (R-Burlington) and a member of the committee. “How is that a problem?”
Ginger Gold Schnitzer, a lobbyist with the New Jersey Education Association, said that of the contracts that specify an amount, 425 cap teachers at $15,000 or less in unused sick days on retirement, while 37 allow members to get more than $15,000, although everyone hired after 2010 is automatically capped at $15,000.
‘An attack on the middle class’
“Sick leave and payouts are items that are negotiated,” she said. “Compensation agreed on today by boards and local associations is reasonable and fair.” Schnitzer added that the bill “does seriously interfere with our ability to bargain compensation at the table. It is an attack on collective bargaining and, by extension, it is an attack on the middle class.”
Lampitt disagreed, saying the bill does not impact collective bargaining at all and still provides enough room for negotiating.
Democratic members of the committee were sympathetic toward the union arguments, with some saying they were voting ‘yes’ to move the bill out of committee but would work to amend the measure to make it more palatable before it gets to the floor of the Assembly.
‘While Lampitt said she thinks sick days should have no value unless used when a person is ill, she added, “I believe there could be some negotiating room.”
“These bills are tough,” said Assemblyman Vincent Mazzeo (D-Atlantic) and chair of the committee. “We have seen some things through the towns that have forced us to legislate some things. I’m here trying to digest it from the public employees’ perspective … But New Jersey is tough with property taxes and we need to look at the taxpayers as well.”