Yet another separation agreement, presented at the December 19 town council meeting, has some residents wondering when the practice will end.
The latest agreement relates to deputy clerk Maria Pivirotto, who will retire from her position in February 2019 after more than 30 years of service. Pivirotto will be compensated for accrued vacation, sick, and personal time. The agreement, which has been reviewed by the town council and its attorney during the past few months, allows Pivirotto to use terminal leave for the entire month of February, with a portion of her remaining leave time to be paid at 100%. In addition, she will receive a total payout of $28,611.31.
What Is Terminal Leave?
Terminal leave allows an employee to get a head start on retirement by using accrued vacation, sick, or personal time in lieu of a cash payment. Essentially, the individual is paid to not show up for work. Pivirotto’s last day of work will be January 31, but she will use some of her accrued time to remain an employee through February 28. Terminal leave allows Pivirotto to receive sick time pay at 100% instead of 50%, and she will receive full benefits during this time.
Council member Ronald Smith voiced concern over the separation agreement. He stressed the importance of the council’s adherence to the policy manual, which outlines such payments. Council members Robert Birmingham and Kim Finnegan agreed that guidelines must be adhered to moving forward.
The council voted to approve the separation agreement, with Smith and Birmingham abstaining. In accordance with the agreement, Pivirotto will receive $28,611.31 in a lump sum no later than March 31 (vacation time 450.00 hours = $19,682.92; personal time 22.50 hours = $984.15; sick time at 50% 363.25 hours = $7,944.24).
Existing and Pending Rules on Payouts
State employees already have a $15,000 cap on the amount they may collect for unused sick time. Since 2010, the same cap has applied to newly hired employees of counties, municipalities, and school districts. However, the law does not apply to workers hired prior to 2010. Former governor Chris Christie vetoed bills that would have covered existing employees. According to a September 2017 article on NJ1015.com, Christie was opposed to payouts, which he referred to as “boat checks.” His vetoes left the door open to such agreements for longtime employees.
In January 2018, Assembly bill A1851 was introduced and sponsored by Pamela Lampitt of District 6 (Burlington and Camden), Craig Coughlin of District 19 (Middlesex), and Holly Schepsi of District 39 (Westwood). The bill seeks to limit the cap to $7,500 for all employees, including those hired prior to 2010. Sponsors hope the bill will be approved by Governor Phil Murphy in 2019.
Jefferson resident Robert Vander Ploeg, Jr. spoke to the council. He contended that the township’s policy manual, which addresses leave compensation, should be the guideline for payouts. “I wish I could get a job where I get paid a year’s worth of vacation for one month of work,” he said, referencing Pivirotto’s receipt of a full year’s worth of leave benefits for 2019, despite working only through January 31.
Local budgets and taxes can be strained by separation agreements such as those provided to Pivirotto and five additional employees in 2018, as well as a $64,000 payout to former police chief Kevin Craig in 2015. Statewide, concern for such payouts is evidenced by the pending legislation. Vander Ploeg and some council members expressed hope that the matter will be addressed expeditiously by the township’s new administration.