Hoboken, Union City, and West New York are among the 57 municipalities surveyed that have been following the state’s sick leave payout laws, Acting New Jersey Comptroller Kevin Walsh said in a new report.
By John Heinis/Hudson County View
“Year after year, towns spend taxpayer money to fund costly, wasteful year-end bonuses for public employees that are hidden from taxpayers,” Walsh said in a statement.
“The laws on sick leave payments are being ignored by a lot of towns, and this is putting a financial strain on taxpayers. Mayors and council members who want to lower property taxes are missing an opportunity to do so.”
Many towns allow public employees to cash out their unused sick days for what are essentially yearly bonuses, the comptroller’s office found.
In some instances, municipalities unlawfully promise to make large payments years into the future and such policies can increase a single employee’s pay by potentially hundreds of thousands of dollars.
“In 2007, and again in 2010, in an effort to reduce property taxes, the Legislature enacted laws that placed limits on when and how much local government employees may be paid for unused sick leave,” the report says.
” … The 2007 law applies to senior employees, such as municipal managers and department heads. The 2010 law extends the limitations imposed by the 2007 law to any employee hired after May 21, 2010, regardless of title or position.”
The comptroller’s office identified six common practices that are illegal: giving sick leave payments when an employee resigns or switches jobs, paying more than $15,000 for unused sick leave, allowing sick leave payment through the guise of terminal leave, annual sick leave, sick leave incentive programs, and vacation accrual over one year.
Union City is accused of doing payouts over the cap, other than retirement, as part of the sick leave incentive program, and vacation accrual over one year.
West New York allegedly does the same, with the exception of vacation accrual over one year, while Hoboken is said to participate in the sick leave incentive program and the vacation accrual over one year, the comptroller’s office noted.
“Many of the towns we surveyed showed no awareness that these laws even existed. Legislators from throughout 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,” Walsh added.
“Municipalities are willingly and unlawfully assuming substantial financial obligations that must be paid by today’s, tomorrow’s and future generations’ taxpayers.”
Additionally, the report found that in the 60 towns reviewed, 80 percent are letting employees cash out their sick time when they resign or change jobs, 60 percent allow payments over the $15,000 cap, and 48 percent can give employees annual payouts for their unused sick days.
Officials from the three Hudson municipalities named in the report did not return inquiries seeking comment.