No. 28571: R477-7. Leave

DAR File No.: 28571
Filed: 03/23/2006, 04:08
Received by: NL

RULE ANALYSIS

Purpose of the rule or reason for the change:

This amendment will implement the provisions of H.B. 213, Unused Sick Leave at Retirement Amendments, passed in the 2005 General Session of the Utah Legislature, and clarify provisions governing an employee's return to work. (DAR NOTE: H.B. 213 (2005) is found at Chapter 15, Laws of Utah 2005, and was effective 01/01/2006.)

 

Summary of the rule or change:

H.B. 213 created two categories of sick leave and converted sick leave; leave earned prior to December 31, 2005, is Program I sick leave and converted sick leave, and leave earned after January 1, 2006, is Program II sick leave and converted sick leave. The benefits earned with Program I differs from the benefits earned with Program II. Amendments to Section R477-7-5 provide that 25% of converted sick leave will be placed in the employees 401(k) account upon retirement. The remainder will be used to purchase health care premiums if it is Program I converted sick leave or will be placed in the Public Employees Heath Program (PEHP) health reimbursement program if it is Program II converted sick leave. Amendments to Subsection R477-7-6(1) require the gradual elimination of the number of years the state will pay for health insurance prior to age 65 from 5 years in 2006 to 0 years in 2011; the placement of 25% of the value of the employees sick leave into a 401(k) account at retirement; and the gradual elimination of the mandatory deduction from the employees sick balance from 480 hours in 2006 to 0 hours in 2011. Remaining amendments to this subsection make it mandatory that sick leave hours remaining after the 401(k) contribution and the deduction shall be used to purchase health insurance premiums and move existing language for clarity. Subsection R477-7-6(2)is a new subsection providing for the disposition of leave hours in Program II. Twenty five percent of the value of those hours shall be contributed into a 401(k) account with the remainder placed into the Public Employees Health Program (PEHP) health reimbursement program. Amendments to Sections R477-7-13, R477-7-16, and R477-7-17 simply require agencies to comply with appropriate state and federal laws when an employees returns to work from leave of absence without pay, workers' compensation, or long-term disability. Provisions are found throughout the Department of Human Resource Management (DHRM) rules for dealing with the Family Medical Leave Act, the Americans with Disabilities Act, the Uniformed Services Employment, and Reemployment Rights Act and other human resource laws. (DAR NOTE: The corresponding proposed amendment to Rule R477-7 is under DAR No. 28570 in this issue.)

 

State statutory or constitutional authorization for this rule:

Section 67-19-6 and Subsection 67-19-14(2)

 

Anticipated cost or savings to:

the state budget:

The fiscal note to H.B. 213 estimates a cost to the state budget of $200,000 in fiscal year 2006 and $50,000 in fiscal year 2007 because of anticipated early retirements by employees wishing to avoid the discontinuance of some of the benefits prescribed by the bill. After that the state should realize substantial savings over time as more and more employee sick leave is shifted into the health care reimbursement program from the purchase of more expensive health insurance premiums.

 

local governments:

This rule only affects the executive branch of state government and will have no impact on local governments.

 

other persons:

This rule only affects the executive branch of state government and will have no impact on other persons.

 

Compliance costs for affected persons:

The cost identified above will affect the Utah Retirement System and have little impact on state agencies.

 

Comments by the department head on the fiscal impact the rule may have on businesses:

Rules published by DHRM have no direct effect on businesses or any entity outside state government. DHRM has authority to write rules only to the extent allowed by various provisions of the Utah Personnel Management Act, Title 67, Chapter 19. These provisions limit the provision of career service and these rules to employees of the executive branch of state government. The only possible impact may be a very slight, indirect effect of an agency passes costs or saving on to business through fees. However, it is anticipated that the minimal costs associated with these changes will be absorbed by agency budgets and will have no effect on business. Jeff Herring, Executive Director

 

Emergency rule reason and justification:

Regular rulemaking procedures would place the agency in violation of federal or state law.

This filing supersedes the emergency (120-day) rule filed on December 30, 2005, under DAR No. 28443. The December filing was required because the Utah Supreme Court had issued an injunction against the implementation of the changes to the Unused Sick Leave Retirement Option Program I required by the passage of H.B. 213 in the 2005 General Session. The State was still obligated, however, to implement Program II which was not enjoined by the court requiring a separate rule. The Supreme Court has now resolved all legal issues surrounding the passage of H.B. 213 and the State is once again obligated to implement the entire Unused Sick Leave Retirement Option Programs I and II. The timelines for the lifting of the injunction does not provide sufficient time for regular rulemaking making this emergency rule necessary in order to comply with the effective date of H.B. 213. (DAR NOTE: The previous emergency rule was published in the January 15, 2006, issue of the Bulletin under DAR No. 28443, and was effective 01/01/2006.)

 

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Human Resource Management
Administration
Room 2120 STATE OFFICE BLDG
450 N MAIN ST
SALT LAKE CITY UT 84114-1201

 

Direct questions regarding this rule to:

Linda Cooper at the above address, by phone at 801-538-3208, by FAX at 801-538-3081, or by Internet E-mail at [e-mail]

 

This rule is effective on:

04/01/2006

 

Authorized by:

Jeff Herring, Executive Director

 

 

RULE TEXT

R477. Human Resource Management, Administration.

R477-7. Leave.

R477-7-5. Converted Sick Leave.

[As an incentive to reduce sick leave abuse, an]An employee may convert sick leave hours to converted sick leave after the end of the last pay period of the calendar year in which the employee is eligible.

(1)(a) Converted sick leave hours accrued prior to January 1, 2006 shall be program I converted sick leave hours.

(b) Converted sick leave hours accrued after January 1, 2006 shall be program II converted sick leave hours.

([1]2) To be eligible, an [employee's sick leave account]employee must have accrued a [minimum ]total of 144 hours or more of sick leave in program I and program II combined at the beginning of the first pay period of the calendar year.

(a) At the end of the last pay period of a calendar year in which an employee is eligible, all unused sick leave hours accrued that year in excess of 64 shall be converted to program II converted sick leave.[ In the event the employee has the maximum accrued in converted sick, these hours will be added to the annual leave account balance. An employee who does not wish to have the sick leave converted shall notify agency management no later than the end of February. The converted sick leave hours will then be returned to the sick leave account.]

(b) The maximum hours of converted sick leave an employee may accrue in program I and program II combined is 320.

(c) If the employee has the maximum accrued in converted sick leave, these hours will be added to the annual leave account balance.

(d) In order to prevent or reverse the conversion, an employee shall:

(i) notify agency management no later than the last day of the last pay period of the calendar year in order to prevent the conversion; or

(ii) notify agency management no later than the end of February in order to reverse the conversion.

([b]e) Upon separation, an eligible employee may convert any unused sick leave hours accrued in the current calendar leave year in excess of 64 to converted sick leave hours in program II.[

(c) The maximum hours of converted sick leave an employee may accrue is 320.]

([2]3) [Converted]An employee may use converted sick leave [may be used ]as annual leave[,] or as regular sick leave.[, or as paid health and life insurance at the time of retirement for employees under age 65. If an employee is 65 years of age or older at the time of retirement, converted sick leave may be used to purchase a Medicare supplement.

(a) Payment for health and life insurance is the responsibility of the employing agency.

(b) The purchase rate shall be eight hours of converted sick leave for the state paid portion of the premium for one month's coverage for health and life insurance.

(c) The retiree shall pay the same percentage of the premium as a current employee on the same plan.]

(4) Upon retirement, 25 percent of the value of the unused converted sick leave, but not to exceed Internal Revenue Service limitations, shall be placed in the employee's 401 (k) account as an employer contribution.

(a) Converted sick leave hours from program II shall be placed in the 401 (k) account before hours from program I.

(b) The remainder shall be used for:

(i) the purchase of health care insurance and life insurance as provided in R477-7-6(3)(c) if the converted sick leave was accrued in program I ; or

(ii) a contribution into the employees PEHP health reimbursement account as provided in R477-7-6(4)(b) if the converted sick leave was accrued in program II.

 

R477-7-6. Sick Leave Retirement Benefit.

Upon retirement from active employment, an employee [may be offered a]shall receive an unused sick leave retirement benefit [program, according to Section 67-19-14(2)]under the provisions of Section 67-19-14.2 and Section 67-19-14.4.

(1)(a) Sick leave hours accrued prior to January 1, 2006 shall be program I sick leave hours.

(b) Sick leave hours accrued after January 1, 2006 shall be program II sick leave hours.

([1]2) [This program is optional for each agency]An agency may offer the Unused Sick Leave Retirement Option Program I to an employee who is eligible to receive retirement benefits. However, any decision whether or not to participate in this program shall be agency wide and shall be consistent through an entire fiscal year.

(a) If an agency decides to withdraw for the next fiscal year after initially deciding to participate, the agency must notify all employees at least 60 days before the new fiscal year begins.

(3) An employee in a participating agency shall receive the following benefit provided by the Unused Sick Leave Retirement Options Program I.

(a) Continuing health and life insurance.

([b]i) The employing agency shall provide the same health and life insurance benefits as provided to current employees [for five years or ]until the employee reaches the age eligible for Medicare or up to the following number of years, whichever comes first.

(A) five years if the employee retires during calendar year 2006:

(B) four years if the employee retires during calendar year 2007:

(C) three years if the employee retires during calendar year 2008:

(D) two years if the employee retires during calendar year 2009:

(E) one year if the employee retires during calendar year 2010; or

(F) zero years if the employee retires after calendar year 2010.

([i]ii) Health insurance provided shall be the same coverage carried by the employee at the time of retirement; i.e., family, two-party, or single. If the employee has no health coverage in place upon retirement, none shall be offered or provided.

([ii]iii) Life insurance provided shall be the minimum authorized coverage provided for all state employees at the time the employee retires.

([iii]iv) The retiree shall pay the same percentage of the premium as a current employee on the same plan.

[(2) Employee participation in any part of this incentive program shall be voluntary, but the decision to participate shall be made at retirement.

(3) An employee may elect to receive a cash payment, or transfer to an approved 401(k) or 457 account, up to 25 percent of his accrued unused sick leave at his current rate of pay.](b) Twenty five percent of the value of the unused sick leave, but not to exceed Internal Revenue Service limitations, shall be placed in the employees 401(k) account as an employer contribution.

(i) Sick leave hours from program II shall be placed in the 401(k) account before hours from program I.

([4]ii) After the [election for cash out]401(k) contribution is made, [480 hours]an additional amount shall be deducted from the employees remaining sick leave balance as follows.

(A) 480 hours if the employee retires during calendar year 2006:

(B) 384 hours if the employee retires during calendar year 2007;

(C) 288 hours if the employee retires during calendar year 2008;

(D) 192 hours if the employee retires during calendar year 2009;

(E) 96 hours if the employee retires during calendar year 2010; or

(F) zero hours if the employee retires after calendar year 2010.

([5]c) The [employee may use ]remaining sick leave hours [to participate in the following incentive program]and converted sick leave hours from R477-7-5(4)(b)(i) shall be used to provide the following benefit.

([a]i) The [retiree may ]purchase of PEHP health insurance, or a state approved program, and life insurance coverage for [himself]the employee until he reaches the age eligible for Medicare.

([i]A) Health insurance shall be the same coverage carried by the employee at the time of retirement; i.e., family, two-party, or single.[

(ii) Life insurance provided shall be the minimum authorized coverage provided for state employees at the time the employee retires.]

([iii]B) The purchase rate shall be eight hours of sick leave or converted sick leave for the state paid portion of one month's premium.

([iv]C) The employee shall pay the same percentage of the premium as a current employee on the same plan.

(D) Life insurance provided shall be the minimum authorized coverage provided for state employees at the time the employee retires.

(ii) When the employee reaches the age eligible for Medicare, he may purchase a Medicare supplement policy provided by PEHP for himself at the rate of eight hours of sick leave or converted sick leave for one month's premium.

([b]iii) After the employee reaches the age eligible for Medicare, he may purchase PEHP [Preferred Care ]health insurance, or a state approved [cost equivalent ]program for a spouse until the spouse reaches the age eligible for Medicare.

([i]A) The purchase rate shall be eight hours of sick leave or converted sick leave for one month's premium.

(B) The employee shall pay the same percentage of the premium as a current employee on the same plan.[

(c) When the employee reaches the age eligible for Medicare, he may purchase a high option Medicare supplement policy for himself at the rate of eight hours of sick leave or converted sick leave for one month's premium.]

([d]iv) When the spouse reaches the age eligible for Medicare, the employee may purchase a [high option ]Medicare supplement policy provided by PEHP for the spouse at the rate of eight hours of sick leave or converted sick leave for one month's premium.

([e]v) In the event an employee is killed in the line of duty, the employee's spouse shall be eligible to use the employee's available sick leave hours for the purchase of health and dental insurance as provided in [R477-7-6.]Section 67-19-14.3.

(4) An employee shall receive the following benefit provided by the Unused Sick Leave Retirement Option Program II.

(a) Twenty five percent of the value of the unused sick leave, but not to exceed Internal Revenue Service limitations, shall be placed in the employee's 401(k) account as an employer contribution.

(b) After the 401(k) contribution the remaining sick leave hours and the converted sick leave hours from R477-7-5(4)(b)(ii) shall be deposited in the employees PEHP health reimbursement account at the greater of:

(i) the employees rate of pay at retirement, or

(ii) the average rate of pay of state employees who retired in the same retirement system in the previous calendar year.

 

R477-7-13. Leave of Absence Without Pay.

(1) An employee shall apply in writing to agency management for approval of a leave of absence without pay. Approval may be granted for continuous leave for up to 12 months from the last day worked.

(a) The employee shall be entitled to previously accrued annual and sick leave.

(b) If unable to return to work within the time period granted, the employee shall be separated from state employment unless prohibited by state or federal law to include but not limited to the Americans with Disabilities Act.[

(c) If an employee returns to work on or before the expiration of leave without pay and is unable to perform the essential functions of the position because of a permanent disability that qualifies as a disability under the ADA, the agency shall offer the employee a reassignment to one or more immediately available vacant positions, for which the employee qualifies, and whose essential functions the employee is able to perform without a reasonable accommodation. If no position is immediately available the employee shall be separated from state employment.]

(2) Nonmedical Reasons

(a) Leave without pay may be granted only when there is an expectation that the employee will return to work. This section does not apply for military leave.

(b) Agency management may approve leave without pay for an employee even though annual or sick leave balances exist. An employee may take up to ten consecutive working days of leave without pay without affecting the leave accrual rate.

(c) An employee who receives no compensation for a complete pay period shall be responsible for payment of the full premium of state provided benefits.

(d) An employee who returns to work on or before the expiration of leave without pay shall be placed in a position with comparable pay and seniority to the previously held position.

(3) Medical Reasons

(a) An employee who is ineligible for FMLA, Workers Compensation, or Long Term Disability may be granted leave without pay for medical reasons.

(b) Medical leave without pay may be granted for no more than 12 months. Medical leave may be approved if a registered health practitioner certifies that an employee is temporarily disabled.

(c) An employee who is granted this leave shall provide a monthly status update to the employee's supervisor.

 

R477-7-16. Workers Compensation Leave.

(1) An employee may use accrued leave benefits to supplement the workers compensation benefit.

(a) The combination of leave benefit and workers compensation benefit shall not exceed the employee's gross salary. Leave benefits shall only be used in increments of one hour in making up any difference.

(b) The use of accrued leave to supplement the worker compensation benefit shall be terminated if:

(i) the employee is declared medically stable by licensed medical authority;

(ii) the workers compensation fund terminates the benefit;

(iii) the employee has been absent from work for one year;

(iv) the employee refuses to accept appropriate employment offered by the state; or

(v) the employee receives Long Term Disability or Social Security Disability benefits.

(c) The employee shall refund to the state any accrued leave paid which exceeds the employee's gross salary for the period for which the benefit was received.

(2) An employee will continue to accrue state paid benefits and leave benefits while receiving a workers compensation time loss benefit for up to one year.

(3) Health insurance benefits shall continue for an employee on leave without pay while receiving workers compensation benefits. The employee is responsible for the payment of the employee share of the premium.

(4) If the employee is able to return to work within one year of the last day worked, the agency shall place the employee in the previously held position or a similar position at a comparable salary range.

(5) If the employee is unable to return to work within 12 months, the employee shall be separated from state employment unless prohibited by state or federal law to include but not limited to the Americans with Disabilities Act.

(6) An employee who files a fraudulent workers compensation claim shall be disciplined according to the provisions of R477-11.

 

R477-7-17. Long Term Disability Leave.

(1) An employee who is determined eligible for the Long Term Disability Program (LTD) shall be granted up to one year of medical leave, if warranted by a medical condition.

(a) The medical leave begins on the last day the employee worked. LTD requires a three month waiting period before benefit payments begin. During this period, an employee may use available sick and converted sick leave. When those balances are exhausted, an employee may use other leave balances available.

(b) An employee determined eligible for Long Term Disability benefits shall be eligible for health insurance benefits the day after the last day worked. The employee is responsible for 10% of the health insurance premium during the first year of disability, 20% during the second year of disability, and 30% thereafter until the employee is no longer covered by the long term disability program.

Upon approval of the LTD claim:

(i) Biweekly salary payments that the employee may be receiving shall cease. If the employee received any salary payments after the three month waiting period, the LTD benefit shall be offset by the amount received.

(ii) The employee shall be paid for remaining balances of annual leave, compensatory hours and excess hours in a lump sum payment. This payment shall be made at the time LTD is approved unless the employee requests in writing to receive it upon separation from state employment. No reduction of the LTD payment shall be made to offset this payment. If the employee returns to work prior to one year after the last day worked, the employee has the option of buying back annual leave at the current hourly rate.

(iii) An employee with a converted sick leave balance at the time of LTD eligibility shall have the option to receive a lump sum payout of all or part of the balance or to keep the balance intact to pay for health and life insurance upon retirement. The payout shall be at the rate at the time of LTD eligibility.

(iv) An employee who retires from state government directly from LTD may be eligible for up to five years health and life insurance as provided in Subsection 67-19-14(2)(b)(ii).

(v) Unused sick leave balance shall remain intact until the employee retires. At retirement, the employee shall be eligible for the cash payout and the purchase of health and life insurance as provided in Subsection 67-19-14(2)(c)(i).

(2) An employee shall continue to accrue service credit for retirement purposes while receiving long term disability benefits.

(3) Conditions for return from leave without pay shall include:

(a) If an employee is able to return to work within one year of the last day worked, the agency shall place the employee in the previously held position or similar position in a comparable salary range provided the employee is able to perform the essential functions of the job with or without a reasonable accommodation.[

(b) If an employee is unable to perform the essential functions of the position because of a permanent disability that qualifies as a disability under the ADA, the agency shall offer the employee a reassignment to one or more immediately available vacant positions, for which the employee qualifies, and whose essential functions the employee is able to perform without a reasonable accommodation.]

([c]b) If an employee is unable to return to work within one year after the last day worked, the employee shall be separated from state employment unless prohibited by state or federal law to include but not limited to the Americans with Disabilities Act.

(4) An employee who files a fraudulent long term disability claim shall be disciplined according to the provisions of R477-11.

 

KEY: holidays, leave benefits, vacations

Date of Enactment or Last Substantive Amendment: April 1, 2006

Authorizing, and Implemented or Interpreted Law: 49-9-203; 63-13-2; 67-19-6; 67-19-12.9; [67-19-14.5; ]67-19-14; 67-19-14.2; 67-19-14.4