As you are probably aware, the federal government doesn’t have a short-term disability program. In order to qualify for disability retirement, you need to have been employed for a certain period of time before becoming eligible, and the disability must be expected to last for at least one year. The government’s alternative to a short-term disability program is sick leave.
Sick leave differs from annual leave in that it’s earned at a constant rate, no matter how long you work. Full-time employees earn four hours each biweekly pay period. Part-timers earn 1 hour for each 20 hours they are in a pay status.
Sick leave also differs from annual leave in that there’s no limit on the amount you can accumulate. In fact, over a 30 year career, an employee who never took one hour of sick leave could end up with over 3,000 hours.
Besides providing a cushion of leave to be used when sick, if you are a CSRS employee, you’re in for an extra benefit. Any unused sick leave you have to your credit when you retire will be added to your earned years of service. If you are a FERS employee, the bad news is that you are barred by law from getting any credit for those unused hours unless you are eligible for a CSRS component in your annuity. In that case, you will get credit for any hours that don’t exceed the number you had on the date you transferred to FERS.
If you are eligible to have unused sick leave added to your service credit, here’s the way it’s done. To assure that retirees receive 12 equal annuity payments, the Office of Personnel Management divides the year into 12 30-day months. To figure out the value of unused sick leave, it divides 360 into 2,087, the number of hours in an average work year. If you do the arithmetic, you’ll see that for retirement purposes, a sick leave day is around 5.79+ hours long. And a month of sick leave is about 174 hours long. Unused sick leave hours are added to any left over service credit hours – which are also treated as if they were 5.79+ hours long – to make whole months. Any hours that don’t equal a full month are dropped.
To illustrate the value of unused sick leave at retirement, each month is worth 1/6th percent of your final annuity or 2 percent a year. Better still, that increase becomes a permanent part of your annuity.
Oh, yeah, there’s one more difference between annual and sick leave. Sick leave has no cash value, unlike annual leave for which you will receive a lump-sum payment.