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Washington, D.C., May 13th – Congressman Jim Moran, Virginia Democrat, highlighted a report today produced by the U.S. Treasury Department which found that the “use-it or lose-it” sick leave policy for FERS employees at the IRS is resulting in the use of more sick leave days, especially as workers near retirement.
“This report confirms that the current ‘use-it or lose-it’ sick leave policy is failing our federal agencies and our civil servants,” said Moran. “Employees under CSRS have an incentive to save sick leave because it boosts their retirement annuity. FERS employees however, have no incentive. They are using sick leave at a higher rate, especially as they near retirement. This policy is bad for employee morale and is costing taxpayers $68 million per year in productivity losses.”
Of particular note, the Treasury Department report, prepared by the Inspector General for Tax Administration, found that:
• Approximately 97,000 IRS employees took a total of more than 15 million hours of sick leave in calendar years 2005 and 2006-- costing the IRS $450 million in salary plus lost productivity.
• Revenue officers alone took 959,030 hours of total sick leave, resulting in $256 million in potential lost revenue from uncollected taxes (based on an average collection rate of $267 per hour).
• There is less than a half-day use difference for employees with 10 years through 19 years of service. That difference increases to more than 2 days for employees with 30 or more years of service.
• The difference in the average balance of accumulated sick leave has increased to 36 days for employees with more than 30 years of service.
Quoted in the Treasury report: “We believe that the lack of compensation for unused sick leave at retirement has contributed to the higher amount of sick leave used by FERS employees… these results are consistent with the recent Congressional Research Service report and indicate that changing the FERS to grant employees some form of compensation for unused sick leave at retirement might be warranted…”
Representative Moran has introduced legislation (H.R. 5573) that would provide federal employees under the FERS retirement system (those who joined the federal workforce after 1984) with an incentive to conserve annual sick leave. Under his bill, a lump-sum payment for any unused sick leave at retirement would be provided, capped at $10,000. The bill, introduced in March, has 43 cosponsors.
A Congressional Research Service report from August 2007, found that sick leave balances are lower for FERS employees than CSRS employees. Independent studies by the Bureau of Prisons have reached the same conclusion with OPM confirming it in their own analysis.
In a recent survey of FERS and CSRS employees, 85% of CSRS employees said they conserved as much sick leave as possible. On the other hand, 75% of FERS employees said they would use as much sick leave as possible during their last years of employment.
*Attached is a PDF of the Treasury Department’s report.
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