Two of the most highly regarded federal employee benefits are sick leave and annual leave. They are earned pay period by pay period, can be accumulated for later use and, in some cases, converted into cash or used to increase your annuity.
Sick Leave
All full-time federal employees earn the same amount of sick leave – 4 hours every two weeks, 104 hours per year. Part-time employees earn proportionately less. Sick leave can be accumulated without limit. While most employees use some of those hours when they are ill or have medical appointments, there are a few hardy souls who end a 30 year career with over 3,000 hours in the bank.
If you are a CSRS-covered employee, there’s a financial incentive to that. At retirement, those hours will be added to your actual years of service, resulting in a larger annuity. For example, if you had a closing balance of one year’s sick leave (2,087 hours), your annuity would be increased by 2 percent, with each additional month being worth one-sixth percent.
If you are a FERS employee, you aren’t so lucky. By law, unused sick leave cannot be used to increase your annuity. While there have been some desultory conversations on the Hill about changing that, to date not one single bill has been introduced to accomplish it. The fact that you won’t get any credit for that sick leave doesn’t mean that you are free to burn it off when you approach retirement. The law is still the law. Sick leave may only be used for legitimate reasons. Therefore, an agency is required to ask for proof of need if any employee makes extensive use of sick leave.
Annual Leave
For most employees, the amount of annual leave they can earn is based on their years of service. Full-time employees with fewer than three years of service earn 4 hours per pay period. Between three and 15 years they earn 6 hours per pay period. And with 15 or more years of service, they earn 8 hours per pay period. Part-time employees earn proportionately less. Note: A new law designed to assist agencies in filling difficult to fill positions permits an agency head – at his sole discretion – to take into consideration the past work history of a new hire in setting his leave accumulation rate, up to the 8 hour maximum.
Unlike sick leave, annual leave may not be accumulated without limit. Most employees have a limit of 240 hours in a calendar year, overseas employees, 360, and members of the Senior Executive Service, 720. However, if an SES member who had more than that amount to his credit on October 13, 1994, that higher number became his personal leave ceiling.
While leave hours above those limits are usually forfeited at the beginning of the first pay period in the new calendar year, an agency can restore those hours if they were forfeited because of an administrative error, the agency’s need to keep you on the job or illness. However, to qualify in those instances, those situations must have occurred late in the leave year and the leave had to be scheduled before the start of the third biweekly pay period before the end of the leave year.
Annual leave is yours to use in any way you want; however, the scheduling of that leave needs to be approved by your supervisor. While the urge to use annual leave is a natural one, most employees who reach retirement age like to make sure that they have accumulated the maximum number of hours possible. That’s because they can receive a lump-sum payment for any unused hours of annual leave when they retire.
Lump-sum payments are calculated by projecting the hours forward as if you were still on the payroll. That’s why so many employees retire around the end of the year. They know that if they leave before the first pay period of the new year, any hours of annual leave that would have been forfeited then won’t be. Further, any hours that extend beyond the end of the leave year will be paid at the new, higher hourly rate.
