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VACATION LEAVE CASH-OUT

Friday, January 14, 2022

Background 

The National Joint Council bargaining agents signed a Memorandum of Understanding (MOU) with the Employer on the cash-out of excess vacation leave. The AJC signed the MOU on December 16, 2021, a copy of which can be read here

In accordance with article 17.08 of the LP Collective Agreement, AJC members are entitled to carry over seven weeks (262.5 hours) of vacation leave from one fiscal year to the next. Any vacation leave in excess of seven weeks cannot be carried over from one fiscal year to the next and is cashed out. 

From 2016 to the present, the Employer put a moratorium on the cash out of vacation leave in excess of the seven-week limit. The moratorium was instituted because of Phoenix pay problems, and the COVID-19 pandemic provided an additional reason to continue it. As a result of the moratorium, some AJC members have accumulated vacation leave in excess of the seven-week carry over limit. 

In 2021, the Employer indicated that it would not extend the moratorium beyond the current fiscal year ending on March 31, 2022. The AJC and other federal unions advocated to the Employer that members should have the option to reduce their excess vacation leave credits by taking the leave over an extended period of time, rather than having the entire amount of the excess vacation leave credits cashed out. The employer was open to such an arrangement, since it could reduce the cash out liability of departments and extend the cash out over a period of years. 

How will the MOU cash out process work? 

A mandatory cash out of excess vacation leave credits (i.e., all vacation leave credits over seven weeks) at the rate of 20% will take place each year over the five-year period from March 31, 2022, to March 31, 2026. 

Excess leave credits will be calculated as of March 31, 2022. A cash out of 20% of the excess leave will occur in the fiscal year commencing April 1, 2022. As an example: 

  • Lawyer A has 12 weeks of vacation leave in their bank as of March 31, 2022. 
  • The excess vacation leave is five weeks (i.e., 12 weeks – 7 week carry over limit). 
  • In the fiscal year commencing April 1, 2022, Lawyer A will receive a cash-out of one week of vacation leave credits (i.e., 20% of the five weeks of excess leave credits). 

The same process will be repeated on March 31, 2023, and so on until all excess leave credits are used up or cashed out. If Lawyer A still has four weeks (20 days) of excess leave credits on March 31, 2023, a cash out of four days of vacation leave would occur in the fiscal year beginning April 1, 2023 (i.e., 20% of the 20 days of excess vacation leave). At the end of the period covered by the MOU (March 31, 2026), all remaining excess vacation leave will be cashed out. 

If I have not used all of my annual vacation leave for the current fiscal year ending March 31, 2022, will this unused annual vacation leave also be cashed out? 

Vacation leave which was earned but not used in the fiscal year ending March 31, 2022, will be cashed out if a member is carrying over vacation leave in excess of the seven-week limit. This cash out is in addition to the 20% cash out of excess vacation leave. The same process applies to each fiscal year covered by the MOU. 

Example: 

  • Lawyer B has ten weeks of vacation leave in their bank as of March 31, 2022, which includes one week of annual leave which was earned in the fiscal year ending March 31, 2022, but was not taken.
  • The excess vacation leave is three weeks, or 15 days (i.e., 10 weeks – 7 week carry over limit). 
  • In the fiscal year commencing April 1, 2022, Lawyer B will receive a cash out of three days of vacation leave credits (i.e., 20% of the 15 days of excess leave credits). 
  • Because Lawyer B did not take one week of vacation leave earned in the fiscal year ending March 31, 2022, that one week of vacation leave will also be cashed out. 
  • In total, Lawyer B will be cashed out for eight days of vacation leave, leaving a balance of 42 days (8 weeks + 2 days) in Lawyer B’s vacation leave bank. 

Can the cash out payments under the MOU reduce my vacation leave below the seven-week carry over limit in art. 17.08 of the AJC Collective Agreement? 

No. The cash out payments under the MOU are limited to the amount necessary to reduce a lawyer’s vacation leave carry over to the seven weeks allowed by art. 17.08 of the AJC Collective Agreement. 

What if I want all of the excess vacation leave cashed out? 

Under the MOU, a lawyer who does not wish to use up excess vacation leave or does not want to be cashed out at the rate of 20% per year may still request a cash out of 100% of excess vacation leave. A request for a 100% cash out of excess vacation leave should be made to management. 

What if there are problems with the completeness or accuracy of my leave data? 

The Employer, in consultation with the member, may pause the mandatory 20% cash out in a given year, in certain situations where there is an issue with the completeness or accuracy of a lawyer’s leave data. This could occur, for example, where a member employed by the DOJ accepts a position with the PPSC, and there is a delay in transferring leave data from one department to the other. 

Does the MOU on vacation leave cash out apply to any other form of leave? 

No, the MOU only applies to vacation leave and does not apply to other forms of leave, including management leave. 

 

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