BY WALTER ELLIOTT
There is a clock running on East Orange, West Orange, Belleville and 53 other New Jersey municipalities to get their vacation and sick pay policies and procedures aligned with state law on or before Sept. 30.
These three “Local Talk” area towns must present a municipal governing body-approved Corrective Action Plan to the New Jersey Office of the State Comptroller for the latter’s review on or by that last Friday in September. The CAP, to quote the OSC July 7 report, is to “detail the steps the municipality has taken and will take to comply with the following recommendations.”
The OSC started running its compliance clock when it published “A Review of Sick and Vacation Leave Policies in New Jersey Municipalities,” where it sampled 60 municipalities’ regulations, union and personnel contracts and employee handbooks from 2017 through 2021.
The state agency, when comparing the above documents’ language to 2007 and 2010 state laws on vacation and sick payouts, found 57 of its 60 municipalities – 95 percent – noncompliant.
Some of the state’s other 505 municipalities who were not subject to the comptroller’s survey and report, including those in “Local Talk” territory, may have also spent part of this summer reviewing their personnel and labor language to check their compliance.
The OSC’s clock, when it comes to city and township councils’ approving CAPs, is meanwhile starting to run out.
“Local Talk” was unable to find CAP or related legislation on Belleville, West Orange and East Orange municipal council agendas for July or August.
CAP ordinances, for example, had not made West Orange Town Council’s Sept. 6 agenda. Sept. 20 is their last scheduled meeting before Sept. 30, barring the announcement of a special session.
Agendas for East Orange City Council’s committee and regular meetings, which are sequentially held both on Sept. 12 and 28, have not been published as of press time.
Belleville’s Township Council agendas for Sept. 13 and 27 have also not been posted by 5 p.m. Sept. 7.
The lack of CAP legislation making the three “Local Talk” towns’ agendas does not mean that the respective elders are disregarding the OSC’s call to compliance.
“I’m committed to the City of East Orange being transparent, a good steward of public spending and in compliance with all state laws,” Mayor Theodore “Ted” Green told “Local Talk” Aug. 9. Our corporation counsel team is currently reviewing our existing sick leave policies and will share their findings with our bargaining units prior to completion of our CAP for the NJ OSC.”
Belleville Town Manager Anthony Iacono, on Aug. 22, said Mayor Michael Melham and the Township Council had authorized him to “address and prioritize accrued vacation and sick (leave) three years ago (2019).” Iacono added, however, that the COVID-19 pandemic had proved a challenge with some of the township’s police, fire and OEM personnel.
“Largely, the information in the OSC report mirrors the directives we issued to all unions in 2022,” added Iacono. “We do have safeguards in place to be incompliance with the report’s findings. We recently hired labor attorney Eric Bernstein, who we are working with to complete our CAP by Sept. 30.”
It is not known whether Bernstein is also working with East Orange and/or West Orange. An email sent to the Warren Township, Somerset County office remains unanswered.
John Gross, West Orange’s CFO and Business Administrator said as early as July 21 that the township is “100-percent compliant” except for some policy updates.
“While some of our policy documents haven’t yet been amended to meet statutory changes affecting sick and vacation leave policies in New Jersey,” said Gross, “our actual policies have changed (and have) been 100-percent compliant with those laws.”
Acting State Comptroller Kevin Walsh, earlier this year, had asked his investigators in Trenton on whether the state’s 565 municipalities are complying with 2007 and 2010 New Jersey statutes on how they are accruing and paying out vacation and sick leave.
The 2007 State Legislature-approved law allowed municipal managers, department heads and other senior employees to accumulate more than $15,000 in sick leave and/or vacation payments.
The 2010 law amends the 2007 state sick leave legislation to all personnel hired after May 21, 2010. The personnel includes employees of all non-civil service municipalities and school districts.
That amendment places a one-year carryover cap on vacation leave to all said employees and to standardize leave benefits. Accrued sick leave payments may only be paid at retirement – not annually or upon resignation.
Both the 2007 and 2010 laws limit unused sick leave to a maximum $15,000. A compliant municipality “will pay nothing to an employee whose employment ends at any time other than retirement from a pension system.”
The intent is to limit municipality financial exposure or liability to $15,000.
OSC investigators then took an 11 percent sample of the state’s 565 municipalities 2017-21. They reached out to the selected municipalities in all counties except Warren County.
The four municipalities sampled in Essex County – Belleville, East Orange, Verona and West Orange – were above average by county. Four counties had one of their municipality’s samples; another five had five towns each. The average municipality count per county was three.
They asked the 60 for labor contracts, personnel agreements, employee manuals and related documents and were alarmed by the predominant noncompliance.
The report found the following noncompliant breakdowns, including:
- 56 of 60 municipalities have policies or contracts “that undermine” the 201 law’s cost-saving intent.
- 41 municipalities permit six leave payments to senior employees “that are unlawful under the 2007 law.”
- “Almost a third (19) of the municipalities have not implemented the 2007 and 2010 vacation accrual limitations.”
While the report itself runs 26 pages, the individual municipal findings are within 76 pages of appendices – where East Orange, West Orange and Belleville’s summaries are found.
In EAST ORANGE, the report found Ordinance 60-100 allows non-unionized employees with 10 years’ service and who have amassed at least 100 sick days can get 50 percent of their unused time up to $15,000 on retirement. Those 10-year-plus employees with 100 hours as of Dec. 31, 2011 are limited to half of the employee’s annual salary.
Five of the city’s union contracts limit accrued sick leave to $15,000 at retirement only. Two other contracts allow up to $15,000 accrued sick leave if the employee is eligible for retirement but had died while in office or in the line of duty. Employees are also allowed up to five additional vacation days a year based on unused sick time.
Ord. 60-53(B) allowed unused vacation time to rollover to the following year only.
“The terms of two of East Orange’s contracts aren’t in compliance with the 2010 law regarding accrued sick leave payment,” said the OSC finding. “The contracts allow for payment of accrued sick leave at a time other that retirement for employees hired after May 21, 2010.”
In WEST ORANGE, its employee manual has all non-union employees being entitled to accrued sick leave payment at retirement or death at half their pay rate up to $12,000.
Three union contracts limit sick leave, to be paid at retirement, up to $7,500. Two of those contracts, however, place the $7,500 cap onto employees hired after Jan. 1, 2013 and one contract for those hired after Jan. 31, 2014. Four union contracts do not cap sick leave payments.
Two of the contracts allow half sick leave pay for the first $12,00 then 15 percent afterwards, payable on retirement or separation. Two contracts “have no explicit reference to payment limits except ‘shall be maintained as per the 1972 revised General Ordinances of the Township.’ ” Two contracts have new employees hired after either Jan. 1, 2013 or Jan. 1, 2014, “must use their vacation time during the year it’s received or it shall be forfeited,” and another four allows accrual to the following year only.”
“The terms of West Orange’s Employee Manual don’t comply with the 2007 and the 2010 laws,” found the report. “The terms of West Orange’s contracts aren’t in compliance with the 2010 law regarding payment of accrued sick leave at a time other than at retirement and not cap payment at $15,000.”
In BELLEVILLE, Ord. 2-19.6(c) allows for all employees to receive accrued sick leave payment at retirement at half value, limited to an average of six months of the employee’s last year. Ord. 2-19.6(g) also allows payment upon the employee’s death. One contract limits sick leave payment at retirement at $7,500; another contract has the sick leave capped at $15,000 at retirement or death.
Belleville’s ordinances are silent on year-to-year accrual of vacation time. One union contract allows vacation time accrual with the town manager’s approval in accordance with state and federal statutes.
“Ordinance 2-19.6’s terms don’t comply with the 2007 law,” finds OSC investigators. “It allows covered employees to receive sick leave payments greater than $15,000 and other than at retirement. Ord. 2-19.6 and one of its union contract’s terms don’t comply with the 2010 law.; they allow for payment at other than retirement time for employees hired after May 21, 2010.”
The OSC report, on one hand, has not indicated what action it would take should a municipality not present a CAP in a timely manner or at all. The report does recommend that the State Legislature “impose accountability measures.”
