Local governments have failed to adhere to decade-old reforms designed to end excessive sick leave payments, the state comptroller found in an investigation released Thursday.
In a review of 60 cities, the State Comptroller’s Office determined that nearly all continued to make large annual payments to officials for accrued sick leave. Only three of the cities studied complied with the 2007 and 2010 laws that prohibited such payments in most cases.
“Legislators across New Jersey thought they had reformed the state’s sick leave policies, but the reforms have largely failed with these 60 municipalities and likely many more,” the state comptroller said. acting, Kevin Walsh. “Municipalities voluntarily and illegally assume substantial financial obligations that must be paid by the taxpayers of today, tomorrow and future generations.
The overwhelming number of cities surveyed that failed to comply with the law suggests the problem extends beyond the 60 cities under the bureau’s review, Walsh said.
After multiple reviews by the State Board of Inquiry, a Joint Legislative Committee and Governor’s Task Force recommended reforms to state laws on sick leave and vacation pay after finding that School districts and local governments regularly increased employee compensation with large payments for unused vacation time.
In 2007, the state enacted laws that capped some senior employees at $15,000 in sick leave and prohibited annual payouts for unused leave, only allowing them to retire. In 2010, lawmakers extended these rules to all employees hired after May 21, 2010.
Forty-one of the 60 cities studied paid sick leave that violated these laws between 2017 and 2021, the Comptroller found. This included 13 cities that continued to pay annual sick leave payments, 22 that did not enact the $15,000 cap, and 20 that violated the 2007 law in multiple directions.
“Sick leave payment laws are being ignored by many cities, putting financial pressure on taxpayers. Mayors and council members who want to cut property taxes are missing an opportunity to do so,” Walsh said.
During a press call Wednesday morning, Walsh said his office hadn’t quantified the total waste, but estimated it at several million dollars. Investigators don’t believe the laws are confusing enough to cause such widespread violations, Walsh added.
Sick leave payment laws are ignored by many cities, putting financial pressure on taxpayers. Mayors and council members who want to reduce property taxes are missing an opportunity to do so.
– Acting State Comptroller Kevin Walsh
The bureau found that only three of the 60 towns surveyed – Montgomery Township in Somerset County, Upper Township and Holmdel – avoided costly breaches of the 2010 law. These included provisions in union contracts and individuals that allowed workers to be paid up to 130 days of sick leave and others that allowed sick leave payments above the $15,000 cap.
And 80% of cities surveyed allowed paid sick leave when employees resigned, died or were terminated. The law only authorizes these payments at retirement. Almost half, aged 29, made such payments every year.
The report recommended that municipalities designate a person to ensure compliance with abuse of sick time and vacation laws and require that employee payments above standard pay be published and approved by the local board of directors. as a measure of transparency.
“The danger here is that these decisions, particularly with respect to the 2007 law, may be made by people with a financial interest in the decision, and that’s why transparency is extremely important,” Walsh said.
He also recommended designating a state agency to monitor sick leave and vacation compliance and suggested lawmakers decide whether to keep exemptions to the law in place for certain senior local officials.
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