Sick Time Payout Yields a Golden Parachute

The Columbus Dispatch recently highlighted an egregious example of a major issue related to public sector compensation. State schools Superintendent Stan Heffner recently received a $160,428.17 buyout after resigning under the cloud of an ethics investigation. The Dispatch provides the important details:

“Like most public workers, Heffner was entitled to cash out the unused benefits, which were paid based on his current salary. For instance, Heffner had 2,155.25 hours of unused sick time – more than a year’s worth – which is paid at 55 percent of his hourly wage, or about $105,000.”

“His 586.25 hours of unused vacation, paid at 100 percent of his hourly wage, amounted to more than $52,000. And he was paid about $2,800 for 32 hours of unused personal time.” [emphasis added]”

While public employee salary is often the focus, the case of Mr. Heffner underscores sick day and vacation policy as another important driver of taxpayer expenses. The crux of the problem with the current system is that sick days can be banked easily when a teacher is much younger, healthier, and at a lower rate of pay and cashed in at a much higher level of compensation upon retirement.

This is not to say attendance incentives and sick days should be eliminated entirely, however they should be structured in a way that does not result in huge retirement payouts. Sick and vacation days should not be used as an extra bonus to compensation. Again, the former superintendent received over $100,000 simply because he didn’t use all of his allotted sick days!

Unfortunately this problem is not limited to superintendents, but also public sector workers on all levels and in all fields. Unless state and local government are ready to undertake serious reforms to public sector collective bargaining, sick days, vacation time, fringe benefits, and yes salary will continue to drive the cost of public services to unsustainable levels.

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