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Thursday, March 14, 2013

Report: California's furloughs driving up leave cash-out costs

SacbeeCalifornia paid more than a quarter-billion dollars to cash out state employee leave last year, according to a new state report, in part because furloughed state workers haven't been taking as much paid time off.

The report from the office of Legislative Analyst Mac Taylor says employee leave cash outs cost $270 million in 2011-12 and concludes that the liability in future years is so heavy that lawmakers should consider a leave-buyback program rather than carry the time on the books. The Legislative Analyst's Office also suggests the state impose a "use-it-or-lose-it" policy on future leave accruals and clamp down on enforcing the state's leave cap, which some departments have routinely ignored.

Furloughs have cut the state's employee payroll costs by about $5 billion since fiscal 2008-09 when former Gov. Arnold Schwarzenegger and lawmakers imposed them, but the savings are less, the analyst says, because employees have taken less paid leave.

Those hours, in turn, stack up in employees' leave banks. Since unused time is cashed out at a worker's final pay rate when he or she leaves state service leave balances gain value to an employee -- and costs the state more -- with every raise or promotion.

"Probably nearly $1 billion of these furlough savings was not long-term savings," the LAO concludes. "Instead, the state must pay this money as they retire or otherwise leave state service."

The state's employee-leave balance tab hit $3.9 billion in June 2012, according to the analyst. continue reading...

2 comments:

Relavent said...

"Report: California's furloughs not put under microscope before being activated"

Bad idea pressed into reducing take home pay of California state employees seen as savings. No one ever considered the problems furloughs would create after the fact. Now it has been determined to cost much more than the employee rip off was worth. Politicians (Schwarzenegger fans in political office) failed those they represent by supposedly making an illegal act of furloughs legal, costing California more than the act was worth.

After the fact report result known by employees prior to furloughs becoming a strain on state employees pockets. Savings now seen as costly mistake years to late, cause no politicians stood up to Arnold's arrogance.

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