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State employees pile up vacation time, exceeding caps and costing millions

Amid a crippling fiscal crisis, managers throughout California’s government have routinely allowed their employees to amass unused vacation time, enabling hundreds of workers to end their public-service careers with payouts topping $100,000, a California Watch investigation has found.

One worker combined vacation and compensatory time to walk away with more than $800,000, records show.

In the past four years, nearly 500 government workers earned six-figure paychecks mostly for unused vacation. In total, the state spent $486 million between 2006 and mid-2009 to pay more than 52,000 employees for time-off benefits – which includes a small percentage of unused comp time and holidays that weren’t taken.

Many of those cash payments appeared to violate rules designed to limit how much vacation time state workers can accumulate during their careers. Most employees are allowed to bank 80 days worth of unused vacation, but records show that supervisors routinely allow them to exceed that amount.

And the problem is growing, state payroll officials said. Personnel documents show that as of December 2008, more than 14,000 active state employees had already exceeded their vacation caps.

In one case, James C. Tudor Jr., the former president of the State Compensation Insurance Fund, cashed out six times more vacation time than regulations allow, taking home more than $550,000 after he was fired in 2007 in the wake of an internal probe that “uncovered serious abuses at the highest levels,” according to state Senate documents.

Another state employee was allowed to accumulate large amounts of comp time in addition to unused vacation days, taking home $815,000 when he left state service. The payout for Kim Nguyen, a former doctor at the prison substance abuse facility in Corcoran, includes more than twice the allowable amount of vacation time and nearly 10 times the limit of comp time for physicians, records show.

In an interview, Nguyen said a heavy workload kept him from using his vacation, and his supervisors paid for extra shifts in comp time instead of overtime, leaving him few options.

“They never hired enough doctors,” said Nguyen. “I never complained so they thought we could handle it. … They kept asking us to work more.”

These large payouts were made during a tumultuous time for the state budget, when lawmakers trimmed programs for child welfare, elder care, domestic violence and other state services to help eliminate multibillion-dollar budget gaps. This year, lawmakers are scrambling to make even more cuts in the face of a $20 billion shortfall.

Amid this, Gov. Arnold Schwarzenegger has instituted mandatory furlough days that most state workers must use before their vacation days. The result, according to several large departments, is that workers are banking more time off than ever, offsetting short-term savings with long-term liabilities.

Though some departments argue that their employees must work long and unpredictable hours, critics say the payments highlight a system defined by lax management and generous benefits unavailable to most workers in the private sector.

“This is part of the whole milieu of excess compensation packages in the public sector,” said Jon Coupal, president of the Howard Jarvis Taxpayers Association.

Managers failing to follow state regulations

Most state employees build up vacation and annual leave at a rate of between 7 and 20 hours a month, depending on the type of leave, bargaining unit and years of service.

State regulations cap the amount of vacation time most employees can accrue at a maximum of 80 work days, or 640 hours. Some employees collect “annual leave time,” which includes both vacation and sick days that is subject to the same limits.

The cap is higher than at least three other large states – New York, Florida and Texas, none of which allow employees to cash out more hours than California. It also dwarfs caps at some of the state’s largest private employers, including Oracle, Western Digital and Nestle USA, records and interviews show. Nestle in Glendale, for instance, caps its longest-serving employees at 280 hours.

If a state employee goes over the limit, “there must be a plan” to reduce the balance before the next year, according to the state employee handbook. Managers are supposed to ensure that their employees stay under the cap except under “extenuating circumstances,” which gives managers broad latitude to grant exceptions.

When they cash out vacation days, state workers are effectively getting paid twice – once for the day they worked when they could have been on vacation and, when they retire, again for that vacation day they didn't use.

Employees are paid for their cashed-out vacation at the salary they received when they left the state, meaning that the payments typically get more expensive for the state over time. Once an employee earns vacation – even if they exceed the cap – state law entitles them to cash out when they leave their state job.

It is impossible to calculate precisely how much the state has paid over the allowable limits because some select workers are subject to different caps. Payroll data collected by California Watch from the state Controller’s Office doesn’t distinguish between unused vacation time and payouts for other time-off categories, such as comp time.

But public records and interviews with department managers suggest the state likely paid at least $100 million, and perhaps tens of millions more, to state employees who exceeded the 640-hour ceiling between 2006 and mid-2009, the period examined by California Watch.

Julie Chapman, chief deputy director of policy at the state Department of Personnel Administration, acknowledged that the estimated $100 million in payments over the limit – more than one-fifth of the $486 million in total leave payments – constitutes a fair estimate.

The actual amount of vacation payouts over the limit could be higher: Not included in the total are university workers or state employees who left their jobs but continued to draw a state paycheck until their unused vacation time was exhausted.

The Department of Personnel Administration, which manages workplace issues for the state’s 237,000 employees, proposed cracking down on the vacation-payout cap during contract talks in 2005 but later abandoned the idea in favor of other concessions, Chapman said.

During negotiations, union representatives pointed fingers at managers, who were exceeding the cap more often than rank-and-file workers, Chapman said. Indeed, state documents estimate that nearly 20 percent of non-union workers, who are typically managers, had surpassed their caps as of late-2008, compared to about 4 percent of union employees.

“The unions screamed mighty heavily,” Chapman said. “They specifically told us that it wasn’t so much of a rank-and-file problem as it was a management problem.”

But when the department proposed a similar crackdown among management, organizations such as the Association of California State Supervisors pushed back, Chapman said, leaving enforcement of the vacation cap off the bargaining table. It hasn’t been brought up since.

Schwarzenegger spokesman Aaron McLear referred questions about the cash-outs to the Department of Personnel Administration.

Vacations present challenge for some state agencies

Many departments – particularly public safety agencies – argue that the unique and unpredictable nature of their work demands that employees take less vacation time than they earn, leaving them to accumulate large totals.

California Highway Patrol officers might be forced to cancel their vacations during emergencies, for example, or department managers might be understaffed and overworked, allowing vacations only in short spurts.

In other situations, asking an employee to work extra time and bank their vacation could cost a department less money than paying another worker overtime to cover this shift, some managers argued.

“There’s the spirit of the law and the letter of the law,” said Ramona Prieto, assistant commissioner of the Highway Patrol. “The letter says ‘here’s our limit’; the spirit says we’re a 24-hour safety organization.”

Even smaller departments that don’t serve a public safety function, such as the Governor’s Office and the Air Resources Board, reported spending more than $1 million on cash-outs between 2006 and 2009.

When employees retire, department officials said they typically cover the cost of their unused vacation and leave time by finding money within their budgets. Often, that means delaying the hiring of a replacement, which can lead to work being stalled.

When he was the director of the now-defunct California Electricity Oversight Board, Erik Saltmarsh said state rules would not allow him to take long vacations because no subordinate at the agency was ranked high enough to legally fill in on his behalf.

“It got to a point where I literally had to appoint an acting executive director and have that approved for me to go on extended vacation,” said Saltmarsh, who records show received a lump-sum payment of $162,000 when he left state service after 16 years in 2008. “So I ended up taking vacation one or two days at a time.”

For other state workers, the payouts can mean financial security and a reward for decades of hard work.

With the security of a pension, health care and a $221,000 check for unused leave, former Highway Patrol sergeant Michael Teixeira is now running for sheriff of San Luis Obispo County. The 36-year veteran has promised to donate 20 percent of his salary to gang diversion programs if he is elected.

“They just kill you on taxes,” Teixeira said of the vacation payment. “I almost hate to say it, but we got so much time off that it got to be that you couldn’t use all that you earned.”

Largest payments went to doctors, insurance fund director

Of the more than 52,000 employees who left state service with a check for unused leave, nobody left with more money than Kim Nguyen, a doctor at the state’s substance abuse facility and prison in Corcoran. When he retired in 2008, Nguyen left with two checks totaling more than $815,000.

Nguyen’s case is unusual because he accumulated so much comp time in addition to vacation days. Vacation time constituted the majority of the payouts made by most state departments.

A series of raises given to prison physicians nearly doubled his salary over two years, Nguyen said. “And that almost doubled the value of my vacation time,” he said.

Nguyen built up the time, according to prison health care officials, by working regular on-call shifts and banking the time as comp because the prison did not allow overtime. The accruals were approved by three chief medical officers during Nguyen’s 10 years with the state: Rene Iway, Edgar Castillo and most recently Perlita McGuinness, according to the receiver’s office.

Luis Patino, a spokesman for the federal receiver that took control of California’s prison health care in 2008, said the facility has had problems recruiting and retaining employees, which has caused doctors at the facility to work an extraordinary number of extra shifts. The current receiver, J. Clark Kelso, was not in place during Nguyen’s tenure.

Although Tudor, the fired State Fund president, took home slightly less – $550,000 – nearly all of his payment was for unused vacation time. Fund spokeswoman Jennifer Vargen said Tudor, whose salary was $273,000, cashed out 488 days of unused annual leave time, compared to 38 days of holidays and personal leave.

“He certainly had a reputation for working around the clock,” said Vargen, who also argued that because the agency is funded through employer premiums, taxpayers did not fund Tudor's payment directly.

Tudor did not respond to numerous interview requests.

Audits find multiple abuses of overage system

Although department managers and former employees argue that long hours and hard work cause most of the overages, state audit reports are filled with stories of lax management and employees who have abused the system.

In a 2008 report by the California State Auditor, investigators described a California Department of Justice manager who in 2006 allowed four subordinates to informally take, but not record, 727 hours of comp time. The manager “did not verify whether his employees’ time reporting was accurate because he trusted his employees to track their own time,” the report says.

A 2006 inspector general’s report for the California Department of Corrections and Rehabilitation claimed that antiquated accounting systems made it impossible to verify whether one employee had indeed banked the 2,376 hours of leave he collected – totaling $116,000 if cashed out. The same employee claimed to have taken no vacation or sick days for more than six years and to have worked every holiday during that period.

"Unfortunately, there are people who manipulate the system to get a huge amount of (banked vacation),” said Teixeira, the retired Highway Patrol officer.

Departments have not yet studied the impact of Schwarzenegger’s furloughs on banked leave, but a state Senate investigation last fall estimated that corrections workers have banked at least five times more vacation than usual since furloughs began.


This story was edited by Mark Katches and Robert Salladay. It was copy edited by William Cooley.

Filed under: Money & Politics

Comments

Comments are closed for this story.
asbyte's picture
Personal leave represents the greatest abuse by management. Managers don't need to use sick leave or vacation time for personal business. And when they are on vacation, they arrange for their secretaries to call them for business purposes. As long as they put in a few minutes, its considered a full days pay.
MikeRotch's picture
I know that this happens at the public level, but private companies are notorious for abusing this kind of employment and labor stuff. I know because I work for a lawyer who handles this type of law and cases and it pretty much happens very often.
rabiafaren's picture
You are right dear, but it's a fashion now. More better is that go on leave and put off your cell phone or change the SIM. I really use this way when go to leaves. I tell all my close contacts to please call on wife cell and put off my own cell. Wear My relax dresses and sleep in dreams.
pattypetrillo's picture
I'm sorry, is there has to do with anything on the topic or I'm missing something here? Thanks!
adiyatma's picture
yes i know that too
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There are so many good people willing to do the job for even much less money. But corruption is present at all level. A good wash out is highly necessary çizgi film izle - fal
dude91's picture
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meduza's picture
And when they are on vacation, they arrange for their secretaries to call them for business purposes Download Expelled:No Intelligence Allowed Movie.
Tina Willis Martinez's picture
And we wonder why California is in such a mess. It is because we have greedy management that doesn't think the rules apply to them. The money should be returned and the state should be sued to make sure it happens.
kevin22's picture
I do not think they should get the money also. Some do not take holidays and work instead for over time. this means they are paid 2 times or more for same day. No other place allows people to save holidays or sick days and take cash. If your fired you never get paid for holidays you did not take except goverment or state workers. This has to stop because they make more money then the people they serve now.
David Salmon's picture
What twaddle. I'm a retired deputy attorney general; I had about three months accumulated vacation pay when I retired. Why? Because my workload and responsibilities had not permitted me to take as much vacation as the rules allowed. My cases did not go away if I did; I simply had less time to get the briefs filed. The same thing was true of most of my colleages and of the managers I knew. The reason there is a difference between union rank-and-file and managers is that managers have more responsibility and work, less ability to take vacation. Get real: the alternative is to hire more people. You certainly don't want to take away this option: in some departments, work would be disrupted badly at the more senior and professional levels if everyone had to use all their vacation or lose it.
Geluso's picture
I'm surprised at the amount of bias I see in this story. The word choice in the lede indicates that you found Abuse and you're going to pin it on the employees. But in the cases you document, state employees weren't "allowed" to build up vacation and comp time -- they were forced to, by managers or by state law that stopped them from taking their legal vacations. The real story here isn't the amount of money in those final checks. That's an indicator of the problem. But you saw big numbers and stopped there. You didn't go for the real story -- what is the real impact of these policies? Is the state saving money by not hiring an additional person to cover these hours, or is it losing money by paying so much overtime instead of hiring? Ah, but that's nuance. Why do that when you can get a speadsheet, highlight the big numbers and call it an Investigation? The best case you make is that vacation time gets more expensive as it ages and the employee gets raises. But even that is weak. As is going to Jon Coupal for a generic they-get-too-much quote that doesn't even address the issue at hand. I expected more from California Watch than mindless government-bashing. I guess I expected too much.
barnes958's picture
Like Geluso, I am disappointed at the bias of this story and its failure to recognize that government employees - particularly in the professional level (doctors, lawyers, management or executive) don't have the ability to take time off (just like in the private workforce). In addition, there are several glaring errors. First your comment that workers get paid twice is totally inaccurate. You get paid for every day you work, which includes vacation days taken. The fact that you take your vacation at the beginning, middle or end of employment does not give you another day (this is also true when you earn them in the private sector). Also, it should be noted that most vacation days (taken or paid) are worth more than when they were earned. That is because you can only use them after you earn them, which if you are successful, can come after a promotion or pay increase. The most glaring error is your conclusion that someone is breaking the law by exceeding the accumulation level. The law on which the rule is based (GC Sections 19815, 19856 and 19857) do not contain a specific level. It only authorizes DPA to adopt a policy in the California Code. As a result it only rises to the level of a guideline and any competent attorney will tell you that it is unenforceable. Once a benefit is earned it cannot be taken away just because you didn't use it within a specific time. That is why, as you note, the Administration tried to negotiate a change rather than impose it. Finally, the only reason that you are seeing such a large number of these buy-outs is that so many employees who might want to continue to work are leaving, thanks in part to mean-spirited articles like this that provide a sound bite headline and a slanted story. California Watch stories are generally more balanced and informative and I can only hope that you will take a closer look at this issue for a future story.
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Are the author and editors of this story going to respond to comments finding laziness and bias? I thought part of the point with this was to have more dialogue with readers. Or, are you content with having foundations pay for you to do what you used to do when advertisers and readers actually found value in your product? If this experiment is going to succeed, you are going to have to do much better than this.
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This is a major case of abuse… Over $800k for that doctor? I bet he is laughing right now. It is obvious there should be tighter controls, and they need to address this issue immediately. Arnie needs to get this issue resolved now or he could suffer a loss of faith from residents. Portable dvd player Ipad covers Transportable homes
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I am agree with you opinion that personal leave represents the biggest abuse by management. Managers are the professional people and they don't want to let their business down. They always have substitutes.
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This is crazy. In another article on this site I was just reading about how the cops are having to generate millions of dollars in towing fines to help stop budget shortfalls. Now here I read about other state employees that are basically screwing the state out of millions of dollars. This is destined for failure. At least I'll always have my Automotive Train Horns
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The real problem is state employees make more now than the public they server. They retire years before the public can and get health insurance and pensions. Not only are they making more than the public in thier area they wind up having 2 people fill the same job one would do if they retired at same age as the public does not 66 or 67 or even 69 that they wnat to push age up to retire.
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It is not a good sign of progress not only for an organization but also for the economy of nation. Accumulating unused vacation beyond the limit and en-cashing them is not good for the financial position of the organization as the records show that supervisors routinely allow them to exceed that amount. Thanks for the information and encouraging for remedial action in this regard. Rob Poulos
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This was a very interesting post regarding state employees. I really do think we have a very long way to go to get the legal steroids country back on track. This is very simple. If they steal they steal from every American. This is really sad. buy steroids
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noucktourno's picture
Public Employee Unions are running our State's government. Democrats and even Republicans have been completely bought and paid for by these special interests groups. If a candidate opposes them they will attack the candidate until he or she is unable to be elected. Politicians know this. In an effort to preserve their own political careers they support irresponsible legislation and ignore serious problems. Best wishes Douglas, CEO Biletul zilei
dexterbenchalot's picture
Luis Patino since 2008 has been running this thing right into the ground and its definitely time to make a change quickly imo. You know what they say about government workers though.The most glaring error is your conclusion that someone is breaking the legal steroids for sale law by exceeding the accumulation level. The law on which the rule is based (GC Sections 19815, 19856 and 19857) do not contain a specific level of anabolic steroids for sale. It only authorizes DPA to adopt a policy in the California Code. When employees retire, department officials said they typically cover the cost of their unused vacation and leave time by finding money within their budgets. Often, that means delaying the hiring of a replacement, which can lead to work being stalled.
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globleinfosoll's picture
The most glaring error is your conclusion that someone is breaking the legal steroids for sale law by exceeding the accumulation level. The law on which the rule is based (GC Sections 19815, 19856 and 19857) do not contain a specific level of anabolic steroids for sale. It only authorizes DPA to adopt a policy in the California Code. When employees retire, department officials said they typically cover the cost of their unused vacation and leave time by finding money within their budgets. Often, that means delaying the hiring of a replacement, which can lead to work being stalled. Home and Garden
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seo007's picture
Everybody deserves vacation time, but it shouldn't be too excessive. Especially on tax payers dime. My debt consolidation company provides 1 week per year off for all employees.
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This is a dark side of the democracy. The government employees are taking advantage of their positions, and that has to be stopedd before a big hole is created. credito Pessoal
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I believe everyone deserves a vacation; however, I think it should not be on the backs of tax payers. Just my 2 cents. Joe at debt consolidation basics
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The high elevations of the Canadian zone allow the Jeffrey pine, red fir, and lodgepole pine to thrive. Brushy areas are abundant with dwarf manzanita and ceanothus; the unique Sierra puffball is also found here. Right below the timeberline, in the Hudsonian zone, the Chi Flat Iron whitebark, foxtail, and silver pines grow. At about 10,500 ft (3,200 m), begins the Arctic zone, a treeless region whose flora include a number of wildflowers, including Sierra primrose, yellow columbine, alpine buttercup, and alpine shooting star
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In the deserts of the lower Sonoran zone, the mammals include the jackrabbit, kangaroo rat, squirrel, and opossum. Common birds include the night owl, roadrunner, cactus wren, a various species of hawk. The area's reptilian life include the sidewinder viper, desert tortoise, and horned toad. The upper Sonoran zone boasts mammals such as the antelope, brown-footed woodrat, and ring-tailed cat. Birds unique to Toy Trucks this zone are the California thrasher, bush tit, and California condor
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I don't have a problem with people getting vacations, we all do, as long as they aren't excessive and don't tap into everyone else's tax dollars. Ben at Fast Lvling
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I think that if you work hard you deserve the benefits findlove.cliknsav.com/blog/ Why else would someone work this hard?
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I think employees should be forced to take vacation or cash it in before the end of the year. This way no pile up at the end of the year. Thanks. jenn at here-comes-the-sun-lyrics.com
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animaandy's picture
Public Employee Unions are running our State's government. Democrats and even Republicans have been completely bought and paid for by these special interests groups. If a candidate opposes them they will attack the candidate until he or she is unable to be elected. Politicians know this. In an effort to preserve their own political careers they support irresponsible legislation and ignore serious problems.
tufty's picture
In my opinion, vacation time should not be rolled over and should be deemed void if not used within the year as in most western nations. The system is open to abuse if employees are allowed to accrue unused vacation time.
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And we wonder why California is in such a mess. It is because we have greedy management that doesn't think the rules apply to them.
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Bubble's picture
In my point of view, vacations should not be rolled over and should be deemed void if not used within the year as in most western nations. The system is open to abuse if employees are allowed to accrue unused vacation time.
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messlia's picture
This problem is going to get worse. I receive three furlough days a month. These are days I am required to work. So I get 24 hours of furlough time on my books, over and above the vacation time I earn. When you add my furlough time, vacation and sick time I earn 45 hours per month. Who needs this much time? I earn so much time it is impossible to use it. I have taken plenty of time off since the furloughs have started but I have not burned one hour of vacation time. When I take time off for anything (sick, jury duty, vacation etc) I am required to use furlough time while my vacation time continues to build. Thats's great for me but not great for the state or it's tax payer's. Our Governers furlough plan helps his budget short term but when it's time for all of these state employees to retire another Governer is going to have to deal with all the vacation time we are forced to bank. At one time we could blame state managers for staff building up too much vacation, but now the blame is with our Governer.
NickWhite's picture
I guess most politicians just use their positions in the government to get benefits for themselves. Sadly, thats why many people try to get into these jobs....

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