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HomeMy WebLinkAboutItem 06.d Date: Item No. Council Approval of Resolution Amending the Paid Time Off Policy For cash out of Extended Medical Bank Proposed Action Staff recommends adoption of the following motion: Move to approve resolution amending the Paid Time Off Policy for early cash out of Extended Medical Bank. Overview Beginning February 1, 2007, employees were allowed to convert to the PTO plan. Sick leave balances were then converted to an Extended Medical Bank (EMB) at a 1:1 ratio at the time of PTO election. Employees can access their EMB only after the first 40 consecutive hours of an absence for the employees’ serious health condition, or the serious health condition of the employee’s children. There are currently 32 employees that have an EMB. At the time of separation or retirement, the EMB is cashed out at a certain percentage based on years of service. After 15 years of service, 55% of the unused EMB is cashed out. The current city liability for employees’ Extended Medical Banks is approximately $600,000. If all 32 employees were to apply for early cash out, the city liability would be reduced to $243,000. Staff is proposing a policy amendment to allow employees apply for early cash out from their EMB. The cash out would be set at 35% of the current balance and would be subject to taxes. Employees electing to cash out early would have their EMB set to zero “0” and they would no longer be eligible for separation pay under Policy 6.63. Employees converting to the City’s PTO plan after November 21, 2016 will not be eligible to apply for early cash from their EMB. The Personnel Committee discussed the proposed amendment to the policy and is recommending approval. The City Attorney has also reviewed the proposed amendment. Primary Issues to Consider • If all 32 employees applied for early cash out at their current rates of pay, the city liability would be $243,000 vs. the $600,000 liability if the time was used at today’s rates of pay. Financial Impact: $0 - $243,000 Budgeted: Y☐ N☒ Source: Related Documents: (CIP, ERP, etc.): Envision Lakeville Community Values: Report Completed by: Tammy Schutta, Human Resources Manager November 21, 2016 Various CITY OF LAKEVILLE RESOLUTION NO. ____ RESOLUTION AMENDING THE PAID TIME OFF POLICY FOR CASH OUT OF EXTENDED MEDICAL BANK WHEREAS, an amendment to the Paid Time Off Policy will allow eligible employees to apply for an early cash out of their Extended Medical Bank and reduce the city’s liability; and WHEREAS, thirty five percent of the employee’s EMB may be cashed out; and WHEREAS, employees electing to cash out early, upon payout their EMB will be set at zero “0” and they will no longer be eligible for separation pay under Policy 6.63; and NOW, THEREFORE, BE IT RESOLVED that the City Council agrees to amend the Paid Time Office policy to allow employees to apply for early cash out of 35% of their Extended Medical Bank and setting their EMB to zero; and BE IT FURTHER RESOLVED that City staff is authorized to amend the budget, if necessary, to reflect the corresponding expenses. ADOPTED by the Lakeville City Council this _____ day of _______________, 2016 ______________________________ Matt Little, Mayor _________________________________ Charlene Friedges, City Clerk 232 PAID TIME OFF Policy 6.50 1) POLICY a) All eligible employees will accrue Paid Time Off (PTO) based on years of service with the City of Lakeville. The PTO benefit replaces the city policies on vacation, sick and funeral leave and combines these benefits into a single plan. b) PTO can be used for any purpose, subject only to normal request/approval procedures consistent with policy and labor agreements. c) Requests for leave for reasons other than illness or injury must be submitted to the supervisor a minimum of 14 days (two weeks) in advance and will be granted in seniority order. Requests made with less than 14 days of notice will be granted on a first-come, first-serve basis at the discretion of the supervisor. d) Emergency use (illness or injury) requires notification to the supervisor a minimum of 30 minutes prior to the employee’s scheduled workday. Requests made are subject to the discretion of the supervisor. Emergency use may require documentation of the emergency such as a physician’s note. e) PTO time is accrued biweekly on an hourly basis. f) The maximum amount of PTO than can be accrued and carried over to the next year will be 480 hours. g) An employee that leaves the city in good standing, after giving proper notice, will be compensated for PTO leave accrued and unused to the date of separation. h) Employees using PTO leave will be considered to be working for the purpose of accumulating additional PTO time. i) Once during the calendar year, full-time employees may cash out up to forty PTO hours. Part-time employees have the ability to cash out a pro-rated value of 40 hours each calendar year. j) Exempt employees, including the City Administrator, who reach the salary limit requirement of MN Stat. §43A.17, Subd. 9, shall receive equivalent hours above the limit in PTO. 2) PARTICIPATION a) Effective February 1, 2007, all non-union and union employees that have bargained this benefit into their contracts will have the opportunity to participate in the PTO benefit. b) Employees who choose not to participate will have the option on an annual basis to switch to the PTO plan during a period of open enrollment. Once the election is made to convert to the PTO program, employees cannot return to the vacation, sick leave and funeral leave program. c) Employees who choose not to participate in the PTO benefit will continue to accrue sick and vacation time according to those policies. d) All employees hired after February 1, 2007 will participate in the PTO program. 233 3) PTO ACCRUAL SCHEDULE a) The accrual schedule for full-time employees is as follows: 1st year of employment 18 days 144 hours 2nd year of employment 18 days 144 hours 3rd year of employment 19 days 152 hours 4th year of employment 19 days 152 hours 5th year of employment 20 days 160 hours 6th year of employment 20 days 160 hours 7th year of employment 22 days 176 hours 8th year of employment 22 days 176 hours 9th year of employment 24 days 192 hours 10th year of employment 24 days 192 hours 11th year of employment 26 days 208 hours 12th year of employment 26 days 208 hours 13th year of employment 28 days 224 hours 14th year of employment 28 days 224 hours 15th year of employment 30 days 240 hours 4) CONVERSION a) Conversion to the PTO plan is optional for employees hired before February 1, 2007. b) Current vacation accruals will be converted 1:1 to the PTO accrual. c) Sick balances will be converted to an Extended Medical Bank (EMB) at a 1:1 ratio at the time of PTO election. d) At retirement or separation, the value of the EMB will be either placed into a Health Care Savings Plan or paid directly to the employee according to city policy and/or contract language. 5) EXTENDED MEDICAL BANK a) EMB hours may only be used after the first 40 consecutive hours of an absence for the employee’s serious health condition, or the serious health condition of the employee’s child. Effective August 1, 2013, EMB may also be used for the serious health condition of the employee’s adult children, spouse, siblings, parents, grandparents or stepparents. This use is limited to 160 hours in a year. The forty hour waiting period shall apply to each separate incident of a serious health condition. b) For regular part-time employees, the waiting period before becoming eligible to use extended leave pay shall be based on a prorated basis by determining the actual hours the employee is scheduled to work according to the budget. c) EMB leave shall not be considered as a privilege or vested right which an employee may use at their discretion, but shall be considered as a type of insurance which shall be allowed in case of a serious health condition of the employee or the employee’s child. 234 d) Employees shall notify their immediate supervisor or the Human Resources Department on the first day of a qualifying serious health condition. Any employee using EMB leave may be placed on concurrent FMLA leave. e) As of November 21, 2016, employees who currently have an Extended Medical Bank (EMB) will be allowed to apply for early cash out from their EMB. Thirty five percent (35%) of the employee’s EMB may be cashed out. If the employee elects to cash out, the Extended Medical Leave Bank will be set at zero “0”. The employee will no longer be eligible for separation pay under Policy 6.63 upon separation/retirement. The early cash out will be subject to taxes. d)f) Employees converting the City’s PTO plan after November 21, 2016 will not be eligible to apply for early cash out from their EMB. Formatted: Not Expanded by / Condensed by Formatted: List Paragraph, Left, Right: 0", Space Before: 0 pt, No bullets or numbering, Tab stops: Not at 0.67" Formatted: List Paragraph, Left, Right: 0", Space Before: 0 pt, No bullets or numbering, Tab stops: Not at 0.67"