AGLO 1979 No. 31 - Sep 18 1979
STATE EMPLOYEES ‑- SICK LEAVE ‑- RETIREMENT ‑- CASHING OUT ACCUMULATED SICK LEAVE UNDER CHAPTER 150, LAWS OF 1979, 1ST EX. SESS.
(1) Chapter 150, Laws of 1979, 1st Ex. Sess., permits an employee during January of 1980 to cash out unused sick leave earned during all of 1979 even though eight of the twelve days were earned prior to the effective date of the Act.
(2) An employee who dies or retires and is in pay status after chapter 150, supra, becomes effective may receive remuneration for unused sick leave earned prior to the effective date of the Act.
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September 18, 1979
Honorable Leonard A. Nord
Department of Personnel
600 S. Franklin
Olympia, Washington 98504 Cite as: AGLO 1979 No. 31
By recent letter you directed our attention to the provisions of chapter 150, Laws of 1979, 1st Ex. Sess. (Senate Bill No. 2192) which authorize the cashing out of accrued sick leave by state employees under certain circumstances set forth therein. You then requested our opinion on the following two questions:
"1. Does Chapter 150, Laws of 1979, 1st Ex. Sess. permit an employee during January of 1980 to cash out unused sick leave earned during all of 1979 even though eight of the twelve days were earned prior to the effective date of the Act?
[[Orig. Op. Page 2]]
"2. May an employee who dies or retires and is in pay status after the Act becomes effective receive renumeration for unused sick leave earned prior to the effective date of the Act?"
We answer both questions in the affirmative for the reasons set forth in our analysis.
To begin with we should make note of the fact that prior to the enactment of chapter 150, Laws of 1979, 1st Ex. Sess., there were in existence nostatutory provisions for the accrual or accumulation of sick leave either for state employees, generally, or for any particular class of such employees. Contrast, in that regard, the matter of annual (or vacation) leave which is provided for in RCW 43.01.040-43.01.043. Nevertheless, by State or Higher Education Personnel Board rules in the case of classified personnel1/ and by internal office policies adopted by the various appointing authorities in the case of nonclassified, or exempt, employees, most state employees have in fact been earning, accruing and accumulating sick leave‑-generally at the rate of one day per month‑-for many years. The underlying legal rationale for this practice is simply that sick leave constitutes a form of employee benefit which the various state agency employers may provide for their employees, by contract, in the exercise of their authority to appoint, or employ, and compensate those personnel. See, AGO 63-64 No. 97, copy enclosed. In addition, in the case of such classified personnel as are covered by the state civil service law (chapter 41.06 RCW) or the higher education personnel law (chapter 28B.16 RCW), identical express statutory authorizations for the promulgation of rules providing for both ". . . sick leaves and vacations . . ." are contained in RCW 28B.16.100 and RCW 41.06.150.
In the past, however, neither the governing regulations of the two personnel boards nor, so far as we are aware, the comparable informal policies of state agency employers have allowed for the "cashing out" of accrued sick leave in whole or in part, either on an annual (on-going) basis or upon [[Orig. Op. Page 3]] termination of employment.2/ But, at the same time, in the case of public employees at the local governmental level, limited amounts of severance pay for accumulated and unused sick leave (as well as for vacation leave) had become fairly common. See,County Officials v. Retirement Board, 89 Wn.2d 729, 575 P.2d 230 (1978); and see also, AGO 63-64 No. 97,supra. Accordingly, in recent years several attempts have been made by employee organizations to obtain similar treatment for state employees‑-leading, finally, to the enactment last spring of chapter 150, Laws of 1979, 1st Ex. Sess.,supra, to which your questions pertain.
This new law, which took effect on September 1, 1979,3/ begins by defining the term "eligible employee" as follows:
"As used in this section the term 'eligible employee' means any employee of the state, other than teaching and research faculty at institutions of higher education, entitled to accumulate sick leave and for whom accurate sick leave records have been maintained: PROVIDED, That no employee may receive compensation under this section for any portion of sick leave accumulated at a rate in excess of one day per month.
". . ."
Then, in turn, the enactment goes on to provide that:
". . .
"An attendance incentive program is established for all eligible employees. In January of the year following any year in which a minimum of sixty days of sick leave is accrued, and each January thereafter, any [[Orig. Op. Page 4]] eligible employee may receive renumeration for unused sick leave accumulated in the previous year at a rate equal to one day's monetary compensation of the employee for each four full days of accrued sick leave in excess of sixty days. Sick leave for which compensation has been received shall be deducted from accrued sick leave at the rate of four days for every one day's monetary compensation.
"At the time of retirement from state service or death, an eligible employee shall receive remuneration at a rate equal to one day's current monetary compensation of the employee for each four full days of accrued sick leave.
"Moneys received under this section shall not be included for the purpose of computing a retirement allowance under any public retirement system in this state.
"This section shall be administered, and rules shall be promulgated to carry out its purposes, by the state personnel board and the higher education personnel board for persons subject to chapters 41.06 and 28B.16 RCW, respectively, and by their respective personnel authorities for other eligible employees: PROVIDED, That determination of classes of eligible employees shall be subject to approval by the office of financial management.
"Should the legislature revoke any benefits granted under this section, no affected employee shall be entitled thereafter to receive such benefits as a matter of contractual right."
With this statutory language in mind, let us now turn to your questions which, here repeated for ease of reference, ask:
"1. Does Chapter 150, Laws of 1979, 1st Ex. Sess. permit an employee during January of 1980 to cash out unused sick leave earned [[Orig. Op. Page 5]] during all of 1979 even though eight of the twelve days were earned prior to the effective date of the Act?
"2. May an employee who dies or retires and is in pay status after the Act becomes effective receive remuneration for unused sick leave earned prior to the effective date of the Act?"
As indicated at the outset, we answer both of these questions in the affirmative. We do so for two distinct reasons.
First, it seems clear that chapter 150, supra, applies, prospectively, only to those persons who were (or are) still employed by the State on or after its effective date. Only those individuals fall within the definition of "eligible employee," supra, which, as you will readily note, is expressed in the present and not the past tense. Moreover, as we will next note, any other reading of the statute (i.e., as being applicable to persons who terminated before its effective date) would render it of doubtful constitutionality, contrary to the rule of statutory construction enunciated in such cases asSoundview Pulp Co. v. Taylor, 21 Wn.2d 261, 150 P.2d 839 (1944).4/ But at the same time, it seems to us equally clear that the legislature, which presumably was aware of the State's long-existing sick leave policies when it enacted chapter 150,supra, expressed no distinction whatsoever between sick leave already earned or accumulated and that earned or accumulated after the effective date of the law‑-even though some might suggest that allowing credit for pre‑acquired sick leave was unnecessary to achieve the stated purpose of the law;i.e., as an attendance incentive program. In fact, we are informed that at one point, during a hearing on the bill (then Senate Bill No. 2191) before the House State Government Committee on March 6, 1979, a verbal amendment to limit its application only to ". . . leave acquired after the effective date of this act . . ." was proposed but then was withdrawn in the [[Orig. Op. Page 6]] face of objections to the effect that the amendment ". . . would unduly penalize older workers." Also, while it is true that a legislative enactment is presumed to apply prospectively only, and will not be held to apply retrospectively unless such legislative intent is clearly expressed or to be implied, Anderson v. City of Seattle, 78 Wn.2d 201, 471 P.2d 87 (1970) and cases cited therein, in its application of that principle it is notable that the court, inAetna Life v. Washington Life, 83 Wn.2d 523, 535, 520 P.2d 162 (1974), recently held that:
". . . a statute operates prospectively when the precipitating event for the application of the statute occurs after the effective date of the statute, even though the precipitating event had its origin in a situation existing prior to the enactment of the statute. . . ."
Secondly, it is our opinion that so long as the beneficial provisions of chapter 150,supra, are applied only to persons who were (or are) still serving as state employees on or after September 1, 1979, when the act took effect, the approach of including sick leave earned before that effective date, for the purposes of both of your two questions, is constitutionally defensible. Just as in the case of what is known as "prior service" in the case of members of the Washington Public Employees Retirement System (PERS), the phenomenon involved is one of payment by the State, in exchange for service rendered on or after the effective date of a law, of a benefit, or increment of compensation, measured in part by other service rendered by the same employees prior to the time when the law took effect. Yet as you know, the constitutionality of such prior service credit was upheld by our State Supreme Court, against an attack based upon Article II, § 25 of the state constitution as it then read,5/ in the case ofAldrich v. State Employees' Retirement System, 49 Wn.2d 831, 307 P.2d 270 (1957). As the court explained in so ruling,
". . .
"Prior service credit for services antedating the effective date of the state employees' [[Orig. Op. Page 7]] retirement act cannot, standing alone, support a pension under the rule of the Bakenhus case. There must be, in addition thereto, some service rendered after the effective date of the act, so that the act will constitute a part of the contract governing the subsequent employment. Then the pensions provided for under the act constitute deferred compensation for the subsequent service and are not gratuities predicated merely upon the prior service.
". . ."
Accord, as well, the authorities cited in AGO 63-64 No. 97, supra, wherein we specifically advised that counties or cities, in the exercise of their authority to hire and compensate,
". . . have the authority to adopt by ordinance or contract provisions a plan granting severance pay to their employees for accrued sick leave in consideration of services to be performed by the employee after the ordinance is adopted or contract is executed."
Finally, we are aware of a contention by some that to allow those state employees still in service who have generally "saved" their sick leave in the past (rather than using it) to cash out that previously accrued leave is somehow unfair to those other state employees, also still in service, who‑-not knowing the law might some day be changed‑-have used most or all of their sick leave up. We would, however, regard that argument as a policy argument appropriately to be presented to the legislature rather than a constitutional argument in opposition to allowing those whohave saved their previously earned sick leave now to be able to convert some of it into cash under the law as it has, in fact, been enacted by the legislature.
In conclusion, for the foregoing reasons, we thus answer both of your questions in the affirmative.6/ We trust that the [[Orig. Op. Page 8]] foregoing will be of assistance to you.
Very truly yours,
PHILIP H. AUSTIN
Deputy Attorney General
*** FOOTNOTES ***
1/See, WAC 356-18-050 and WAC 251-22-100.
2/This, again, should be contrasted with the situation that has long existed, statutorily, in the case of annual or vacation leave. See, RCW 43.01.041 which was first enacted in 1955 and expressly authorizes payment for accumulated annual leave upon termination of employment.
3/Accord, Wash. Const., Article II, § 41 (Amendment 26).
4/". . . where a statute is open to two constructions, one of which will render it constitutional and the other unconstitutional or open to grave doubt in this respect, the former construction and not the latter is to be adopted. . . ." Ibid at 268.
5/"The legislature shall never grant any extra compensation to any public officer, agent, servant, or contractor, after the services shall have been rendered, or the contract entered into, nor shall the compensation of any public officer be increased or diminished during his term of office."
6/In so far as question (2) is concerned, while the legislature has spoken of payment to an eligible employee ". . . at the time of retirement . . . or death . . .", we trust that in the case of death the legislature truly intended that the actual recipient would be the decedent's estate.