Under legislation that is pending in Trenton, the amount of money that municipal employees in New Jersey could get for unused sick leave upon retirement would be capped at $15,000. A similar law has already been enacted for state workers.
Had the controversial legislation been in place last year, Secaucus taxpayers would have saved $81,257 on sick leave payouts to municipal retirees in 2007.
Locally, a few high-profile retirees have put this issue in the headlines recently due to the large payouts they will receive upon retirement.
Outgoing Secaucus Schools Superintendent Constantino Scerbo, for example, who will retire on Aug. 31 after 43 years in the local school district, is among the cases cited as an example of excessive sick leave payouts. According to a local daily newspaper, Scerbo has at least 484 days in unused vacation and sick leave, for which he will be compensated $115,000.
However, since Scerbo will remain on the job through the summer and will continue to accumulate time, it is possible that his unused sick and annual leave time could be as high as 520 days.
The pending legislation was introduced in the State Senate on Feb. 26 and in the Assembly on May 12.
Scerbo defends sick leave system
In an interview last week, Scerbo defended the current sick leave structure for Secaucus School District employees, who get 12 sick days annually if they work year-round.
“One thing that’s never mentioned in these articles is the fact that school employees don’t get any disability leave or disability benefits,” Scerbo noted. “So sick leave is the only thing school employees have to fall back on if they have a long-term illness, like cancer, or they need surgery, or if they have a chronic illness.”
Under the current structure, he said, school employees are encouraged to save up their sick leave in the event they have a major health issue.
And because they know there is a chance that they’ll be compensated for unused sick leave when they retire, school workers are less likely to take days off every time they have a sore throat or a runny nose.
“If you change the current structure, people are going to be more likely to take their 12 days,” Scerbo said.
“Taxpayers should also understand, whenever someone is out sick, there is going to be a cost involved,” he continued. “If someone is out, we often have to hire substitutes and temps to fill in. And those people have to be paid.”
Bill supporter responds
Deborah Cole, a spokesperson for the New Jersey State League of Municipalities, said, “Given the current economic climate, I know a number of towns and states around the country are looking hard at this issue now. New Jersey is not alone in taking a look at this issue.”
Assemblywoman Pamela Lampitt (D-6th Dist.) said that workers in the private sector are not typically compensated for unused sick leave.
Lampitt, who cosponsored the pending legislation in Trenton, said local governments can’t afford huge payouts like the one that Scerbo and other local superintendents get when they retire.
“Voters and taxpayers see these payouts and feel it’s a broken system that’s crying out to be fixed,” Lampitt said last week.
She added, “Sick leave is just that: It’s there if you get sick. We want people to have sick leave and use it when they need it. But if it goes unused, there is no reason to pay an employee for something they did not use or need.”
As for Scerbo’s argument that many city and school workers don’t have disability leave, Lampitt commented, “That’s what disability insurance is for. If people want extra protection, in case they have a long-term illness or major health issue, then they should buy insurance for that.”
Other municipal employees
Secaucus School District employees work under a different personnel structure than Town Hall workers.
Town Hall workers generally are compensated for half of their sick days when they retire, according to Town Administrator David Drumeler.
He said that most Secaucus employees are covered under collective bargaining contracts. (Durmeler, Town Clerk Michael Marra, and Chief Finance Officer Margaret Barkala are among the few people on the Secaucus payroll who are not covered under a union contract.)
“The general policy for most municipal employees who are covered by labor contract is that they can get paid for half of any unused sick leave when they retire,” said Drumeler last week. “This policy is true for everyone, except Secaucus police.”
Sick leave benefits for Secaucus Police Department officers is determined by a formula, Drumeler stated. Under the police formula, their number of years of service gets multiplied by 10 days per year, minus any sick days they’ve actually taken. That figure is then multiplied by an officer’s daily wage. However, the maximum number of days for which they can be paid is capped at 125 days.
“Now, all of this assumes that the person retires,” Drumeler emphasized. “If someone leaves their job voluntarily or is terminated, they don’t get compensated for unused sick time.”
The pending legislation in Trenton would not supercede any current union contracts that are already in place, according to the language of both the State Senate and Assembly version of the bill.
But new employees covered under future contracts would be subject to the sick leave law, if it is passed.
Speaking through his chief of staff, Assemblyman Vincent Prieto (D-32nd Dist.), who represents Secaucus, expressed his support for this legislation, as long as the final version of the bill does not interfere with current union contracts.
The Gonnelli case
The recent discussion around Scerbo’s retirement package recalls the 2005 dispute around the benefit package offered to Michael Gonnelli, who at the time was the superintendent of the Department of Public Works (DPW).
Like Scerbo, Gonnelli had logged many years of service and had accumulated many days of annual and sick leave. When Gonnelli decided to retire from the DPW at age 50, he had 115 days of unused vacation time and 320 days of unused sick time.
After protracted negotiations with the administration of Mayor Dennis Elwell, Gonnelli was eventually allowed to use all of his vacation time and received compensation for half of his unused sick days.
According to Gonnelli, however, the town had compensated previous retirees for all of their unused sick leave, the same way Scerbo will be when he retires.
Gonnelli, who is now a Town Councilman who is frequently at odds with the mayor, has long maintained that he was the first town employee to have his sick leave package cut when he retired, a practice he believes was politically motivated.