Last week I wrote about the benefits that can be gained if you retire with a lot of unused sick leave to your credit. This time I want to focus on annual leave and what it can mean for you. But first, a little background. I’ll start with the rules governing leave accrual and move on to leave carried over from one year to the next. Then I’ll explain what happens to your annual leave when you leave government. I call it “cashing in.”
How much annual leave you can earn depends on your years of creditable federal service. If you have three years or less service, you earn 4 hours per pay period (13 days a year). With three years but fewer than 15, you earn 6 hours per pay period (20 days a year). And with 15 years or more, you earn 8 hours per pay period (26 days a year). Senior Executive Service members, senior level and senior scientific and technical employees earn 8 hours of annual leave per pay period (26 days a year) regardless of their years of service.
For non-retired members of the armed forces, active duty is included in when determining your years of service for leave accrual purposes. For retired members, credit is given only for actual service during a war declared by Congress or while participating in a campaign or expedition for which a campaign badge is issued, or active duty when your retirement was based on a disability received as a direct result of armed conflict or caused by an instrumentality of war and incurred in the line of duty.
If you are a new hire (or are a former employee who has had a break in service of at least 90 days), your agency may give you leave accrual credit for non-federal service if you have skills or experience that relate to the duties of the position to which you are being appointed.
The amount of annual leave you can carry over from one leave year to the next depends on your employment category. If you are like most employees, you can carry over a maximum of 240 hours (30 days). Any leave above amount is called “use of lose.” If you don’t use it before the end of the leave year, you’ll lose it.
If you are in the Senior Executive Service, you have a 720 hour carryover limit (90 days) unless you had more than that on October 13, 1994 when the limit was imposed. If so, your amount as of that date became your personal limit. If you fall below that at the end of a leave year, that lower number becomes your new limit.
If you are employed overseas, you can carry over 560 hours (45 days).
If you are a Postal Service bargaining unit employee, you can carry over 440 hours (55 days). Postal Service Executive and Administrative Schedule employees can carry over a total of 560 hours (70 days).
As a rule, if you retire before the end of a leave year, you’ll be given a lump-sum payment for all your accrued and unused annual leave. The calculation will be based on your hourly rate of basic pay, the amount you would have earned if you had stayed at work until your leave ran out. This can be a real benefit in any year when there is a pay raise and you retire just before the increase goes into effect. Even if there isn’t a pay raise, which has sometimes happened, you’d still get a nice financial return if you got a step increase before you retired.
Note: If you are a Postal Service bargaining unit employees, you can be paid for any leave you carried over from the previous year and any additional leave you earned during the year you retire, not to exceed the carryover limit for your bargaining unit.