2010 July 16

Online Exclusive: Shelby County Commissioner Mike Carpenter on Shelby County’s Employee Paid Leave Policy

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On Shelby County’s Employee Paid Leave Policy
By: County Commissioner Mike Carpenter

Americans, beyond just the Tea Party movement, seem to be making their voices heard on the issues of taxes and spending. Just ask your neighbors, friends, fellow parishioners or strangers on the street, and you will hear outrage at the cost of government and wasteful spending. You will hear disdain and demand for reform until of course, that “reform” threatens to eliminate or reduce a program or benefit near and dear to the hearts of the outraged. Such is the case with Shelby County’s paid leave policy — employees and elected officials who decry the spending of the County Commission are fighting tooth and nail to hold on to an excessive paid leave policy.

Under the current leave policy, every employee receives 11 paid holidays. In addition, employees accrue annual days, sick days and bonus days based on years of service. For example an employee after one year of service earns 11 holidays, 12 sick days, 10 annual days and up to 4 bonus days for a total of 37 days of paid leave. After 20 years of service, that same employee can earn up to 68 days in a year. For employees who don’t use all of their time and make less than $60,000, that time can be cashed out at retirement for a sizable parting bonus. The cost of all paid leave to county government averages $37 million, which means the average employee is away from work 38.5 days per year including holidays. Another $26 million of unused leave sits on the county’s books. To look at it another way, an employee who serves for 15 years and uses none of his time could be paid for a year without coming to work.

My proposal, which is a revision of a proposal from the Wharton Administration two years ago, would reduce the number of days an employee could earn in the future. In other words, any time “banked” by an employee would be preserved, so the employee does not lose that time. The maximum number of days an employee could accrue would be capped at 225 days, just shy of the 260 days that comprise the work year. Rather than having separate leave accounts (sick, annual, bonus), employees would have one account for paid leave that could be used for any purpose. There would no longer be any bonus days to be earned. The maximum days that could be cashed-out at separation would be 20. While limiting the number of days off, increasing productivity and reducing costs, this proposal would still be more generous than the vast majority of private sector companies.

In fact, proponents of the current leave policy have as a primary argument that compared to the private sector they are are woefully compensated, and therefore must have better benefits to bridge the gap. This may have been true in the past, but today it is a myth. The Bureau of Labor Statistics National Compensation Survey demonstrates that nationally and regionally public sector wages in most vocations are on par with the private sector. When benefits are included, nationally the public sector outpaces the private sector by more than $11 per hour on average. Regarding paid leave, public sector paid leave far exceeds what most private sector companies offer. To see a presentation using the National Compensation Survey data, click here.

Other arguments against reform is that abusers are the problem and we should crack down on them. There are two problems with this approach. The first is that the Civil Service system makes timely and effective discipline difficult for any manager. The second is that abused or not, the total cost of the benefit is too high. Most employees may be using their time appropriately, but it doesn’t change the fact that there is an expense to the government that in my mind is unreasonable. Another argument is that any change should only be applied to new hires. Because the county is working to reduce the number of positions and a hiring freeze is imposed, it would take years to have an impact on what is not only a change in efficiency and productivity, but in the culture of county government. Finally, they insist that the leave was promised when they were hired and that the employee handbook is like a contract and shouldn’t be breached. Of course, this is a ridiculous argument. With this logic nothing positive or negative for the employee should ever be changed in the handbook. Many of my colleagues who make this argument voted for a budget that increases the health insurance premium, voted to curtail OPEB benefits and have supported changing our unsustainable pension system. The point is benefit changes are necessary as times change to sustain the viability of the corporation.

The hardest pill to swallow for me in this debate is the Republican elected officials who squawk about conservativism, lower taxes and reducing spending, but have come out aggressively against reforming this policy. Either they are not who they say they are philosophically or the reality that 70% of the cost of county government is personnel related is not understood.

This past Monday, without enough votes to pass the proposal, I agreed to allow the measure to be deferred for 4 weeks. Prior to deferral, I offered two amendments. One would phase-in the plan over three years and the other would create a bank of emergency sick leave for extenuating circumstances. The truth is that the proposal, amended or not, won’t pass unless those that claim they are tired of spending speak up. Contact from county employees trying to maintain the status quo far out-number the contacts from the average taxpayer. What this proposal needs is a little disdain, demand and outrage from the people paying the bill.

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