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AGLO 1982 No. 10 - April 29, 1982
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Ken Eikenberry | 1981-1992 | Attorney General of Washington

PUBLIC EMPLOYEES ‑- VACATION ‑- COMPENSATION FOR UNUSED, ACCRUED, VACATION LEAVE

Where an employee covered by chapter 51, Laws of 1982, 1st Ex. Sess., terminates his or her employment before July 1, 1982, payment for that employee's accrued annual leave need not actually also be made before that date in order to avoid the new prohibition set forth therein.

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                                                                   April 29, 1982

Honorable Joe Taller
Director, Office of
  Financial Management
House Office Building
Olympia, Washington 98504                                                                                                               Cite as:  AGLO 1982 No. 10

Dear Sir:

            This is written in response to your recent request for our opinion on the following question regarding chapter 51, Laws of 1982, 1st Ex. Sess.  (ESSB 5007):

            "If an employee terminates his or her employment before July 1, 1982, must payment for that employee's accrued annual leave be made by the agency before July 1, 1982, under ESSB 5007?"1/

                        The gist of this question is whether the subject new law will cause an employee to lose his or her present right to receive compensation for unused, accrued, vacation leave upon termination of employment if payment is not actually made before its effective date‑-even though the employee separated prior to that date and [[Orig. Op. Page 2]] gave adequate notice under the law as it now exists.  And our answer, in turn, is emphatically in the negative.

                                                                     ANALYSIS

            Chapter 51, Laws of 1982, 1st Ex.  Sess.  (ESSB 5007) provides in substance (with certain exceptions) that those public employees who are covered by it may no longer, on or after July 1, 1982,2/ be compensated‑-in the form of a lump sum payment‑-for unused vacation leave.  Section 1 of this new law reads as follows:

            "No agency or department of the state or political subdivision of the state except those subdivisions not participating in the public employment retirement systems may make any payment to an employee for unused or accrued vacation leave upon termination of employment except in the case of death:  PROVIDED, That contracts may provide a method whereby all accumulated vacation leave may be taken as vacation leave:  PROVIDED FURTHER, That this section shall not apply to any employee covered by chapter 41.26 RCW."

            Section 2 then amends RCW 43.01.040 (under which state employees now earn and accrue vacation leave) by adding the following sentence:

            "No agency or department of the state may make any payment to an employee for unused or accrued vacation leave upon termination of employment except in the case of death:  PROVIDED, That agencies or departments of the state shall provide a method whereby all accumulated vacation leave may be taken as vacation leave."

            Section 3, in turn, amends RCW 43.01.041 as follows:

            "Officers and employees referred to in RCW 43.01.040 whose employment is terminated by their death ((;reduction in force; resignation; dismissal; or by retirement)) and who have accrued vacation leave as specified in RCW 43.01.040, shall ((be))have such accrued vacation leave paid ((therefore under their [[Orig. Op. Page 3]] contract of employment, or)) to their estate ((if they are deceased, or if the employee in case of voluntary resignation has provided adequate notice of termination))."

            And finally, insofar as is here material, § 4 of the law reads as follows:

            "This act shall not have the effect of terminating or modifying any rights acquired under a contract in existence prior to the effective date of this act."

            Your question assumes a termination of employment prior to the effective date of the law‑-under circumstances whereby the employee would still be fully entitled to a lump sum payment for accrued vacation leave in accordance with the present (unamended) language of RCW 43.01.041, supra.3/   But, for one reason or another, actual payment of this entitlement is delayed, administratively, until some time during, say, the first week or ten days of July.

            A basic rule of construction to be observed in dealing with this situation is the proposition that laws are generally to be construed prospectively, unless there is a clearly evident intent to the contrary.  See,e.g., Johnson v. Morris, 87 Wn.2d 922, 557 P.2d 1299 (1976).  Moreover, a prospective application is especially required where a retroactive effect may impair the obligation of a contract.  Scott Paper Co. v. Anacortes, 90 Wn.2d 19, 578 P.2d 1292 (1978).

            In this instance, the clear object of chapter 51, supra, is to change the law prospectively regarding lump sum payments for accrued vacation leave in the case of those public employees covered by its provisions who terminate employment on or after its effective date.  Conversely, the entitlement of those employees separating before the new law takes effect should not logically be deemed to be affected by the pure happenstance of when, administratively, their employer makes physical delivery of the  [[Orig. Op. Page 4]] lump sum payment to which they were still entitled at the time of separation.

            Simply stated, it is a fact of life‑-of which a court would surely take judicial notice‑-that employees do not have the power to control the payroll system.  It is thus possible that one employee, having given timely notice of termination, may receive the lump sum payment for his or her accumulated annual leave (together with the employee's final salary warrant) on the actual day of separation;e.g., June 30, 1982.  But it is equally possible, due to the machinations of the particular payroll system, that the actual delivery of the lump sum payment warrant to another separating employee might be delayed for a few days.

            If, however, that delay could lawfully result in the forfeiture of the employee's accrued annual leave pay it would then be within the power of the employer, in essence, to take away the employee's right simply by unilateral inaction.  But that, in our view, would clearly frustrate the intent of § 4 of the act, as above quoted, and would probably also be held unconstitutional.  Cf.,Johnson v. Aberdeen, 14 Wn.App. 545, 544 P.2d 93 (1975).

We trust that the foregoing will be of assistance to you.

Very truly yours,

KENNETH O. EIKENBERRY
Attorney General

ROBERT F. HAUTH
Senior Assistant
Attorney General

                                                         ***   FOOTNOTES   ***

1/In addition, you have asked a number of other questions regarding the same 1982 enactment which we are still in the process of reviewing.   We will advise you, further, on those questions when our conclusions have been reached.

2/The specified effective date as set forth in § 5.

3/The further question of whether or not any portion of this current entitlement will survive the subject July 1, 1982 deadline, in the case of current state employees, will be dealt with in response to your remaining questions briefly alluded to above.

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