California state workers hoarding vacation days, creating $3.5-billion debt for taxpayers

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California state workers hoarding vacation days, creating $3.5-billion debt for taxpayers
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More and more state workers are able to retire with massive payouts for unused vacation and other leave. That could become a budget breaker for California as an aging workforce heads into retirement.

said revising the vacation policy would help California contain its liabilities, but did not believe that was politically feasible.

For some, vacation payouts can surpass annual salaries. And since state labor code requires employers to compensate workers for unused days off based on final pay rate — not what they were earning when the time was accrued — the actual cost of each vacation hour increases over time.The top 20 employees with the largest payouts in 2018 took home a combined $5.9 million, with all but three receiving raises in the year before they left state service.

The onetime district director for the California Department of Transportation in Alameda County received $405,119 for banked time off — the equivalent of more than 4,400 hours of vacation, or two years of stored leave, according to The Times’ analysis. His annual salary when he retired was $191,208.The state controller’s office would not provide the number of vacation days employees had amassed, saying the information was confidential.

Zagaris, whose state career spanned three decades, received $218,000 from unused vacation when he retired last year. He said the tax bite out of that lump-sum payment was around 40%. The Department of Rehabilitation and Corrections accounted for a third of those hours, which carried a $1-billion price tag. The California Highway Patrol had $396 million in unused leave on the books, the data show; Caltrans was on the hook for $366 million.

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