Severance Policy Ipdate

Transcription

1 Sick Leave an Severance Policy Ipdate ^Ol-'S S<,^ ''"7 f f ^,»p^^'

2 SICK LEAVE POLICY Human Resources Policy Covers MAC Employees Only - Paid Sick Leave 0 Accrues at a rate of 7.33 hours a month or 11 days per year 0 Employees can accrue up to a cap of 560 hours or 70 days - MERF and Union Employees can earn an unlimited amount of sick leave. Once 560 hours reached then monthly accrual stops. If employees at the cap use sick leave accrual begins again until the cap of 560 hours is reached

3 SICK LEAVE POLICY HISTORICAL INFORMATION Long Term Disability (LTD) Introduced - LTD provides insurance provides coverage when an employee becomes disabled for more than 90 days - Cap on accrual lowered from unlimited amount to current 560 hours (70 days) Health Care Savings Plan (HCSP) Introduced - Amount of annual accrual lowered from 12 days to 11 days - Value of the 1 sick day placed into a Health Care Savings Plan (HCSP)

4 SICK LEAVE POLICY HOW SICK LEAVE IS USED Mirrors language in Minnesota law covering Sick Leave Benefits (MN Statute ) - Can be used for employee's injury or illness - Birth or adoption of a child or placement of a foster child - Can be used to cover absences for injury or illness of an employee's. Child, Adult Child, Step Child, Adopted Child and Foster Child. Spouse. Sibling. Parent and Stepparent. Mother-in-law or Father-in-law. Grandchild, Step-Grandchild, Adopted Grandchild and Foster Grandchild. Grandparent

5 SICK LEAVE POLICY HOW SICK LEAVE IS USED Sick Leave can be used for Safety Leave in accordance with Minnesota Statute For providing or receiving assistance because of:. Domestic Abuse. Sexual Assault. Stalking - Can use it if the previously listed relatives need to be provided assistance for Safety Leave reasons

6 SEVERANCE POLICY HUMAN RESOURCES POLICY MAC Employees Only Provides payout of unused sick leave to eligible employees Eligibility. Eligible for Retirement under Pension (i.e. 55 years old). Minimum of 480 hours (60 days) of sick leave accrued. Completed a minimum of 10 years of regular full-time service

7 SEVERANCE POLICY HUMAN RESOURCES POLICY Payout Sick Leave Balance Paid out at % the Daily Rate of Pay for the Position Held on the Day of Retirement Subject to the Minimum of 480 hours and the Maximum of 560 hours allowed to accrue - Equates to between 240 hours and 280 hours of straight time pay - Between 6 weeks and 7 weeks of severance pay Paid out in equal monthly installments over 5 years

8 SEVERANCE POLICY HISTORICAL INFORMATION Long Term Disability (LTD) Introduced - LTD provides insurance provides coverage when an employee becomes disabled for more than 90 days - Cap on severance lowered from 1600 hours (200 days) to current 560 hours (70 days) - Severance payments went from 1600 hours at Vi rate of pay(800 hours of severance) to 560 hours at Vi rate of pay (280 hours of severance) - From maximum of 20 weeks of severance pay to 7 weeks of severance pay

9 CONSIDERATIONS UNION EMPLOYEES Most Unions still have Higher Payout. Still have 1600 hour cap and payout at 1/z rate of pay. Equates to 800 hours of severance pay (20 weeks). However, also have an eligibility requirement of 20 years of service instead of 10 under policy Teamsters. Have a 680 hour cap and payout at Vz rate of pay. Equates to 340 hours of severance pay (8.5 weeks)

10 UNION EMPLOYEES CONSIDERATIONS These Bargaining Units. Represent about 50% of MAC workforce. Extremely difficult to change without cost because they will want something significant in return Police and Fire Units. Essential Bargaining Units. Ultimately Arbitrator Decides. Represent almost 40% percent of union workers

11 SEVERANCE BY THE NUMBERS Number of Retirees who Qualified for Severance Retirees Year Q.ualified % of all Retirees 15% of all Exiting Employees

12 SEVERANCE BY THE NUMBERS Severance Program Costs Program Year Costs $ 87,420 $ 94,939 $ 105,756 $ 119,928

13 MARKET COMPARISON Local Jurisdictions League of Minnesota Cities 2015 Pay and Benefits Survey -Sick Leave Program Surveyed -Severance Program Surveyed -Jurisdictions with populations over 15K -36 jurisdictions reporting

14 MARKET COMPARISON Local Jurisdictions Sick Leave Accrual Rate in Days MAC 11 Mean 12 Mode 12 Range 5-15 Maximum Accumulation Allowed in Hours Unlimited Mean and Range is of jurisdictions with a cap 13 Jurisdictions do not have a cap 10 Jurisdictions have a cap of 960 hours

15 MARKET COMPARISON Local Jurisdictions Severance Payout Allowed in Straight Time Hours MAC 280 Mean 692 Mode 480 and Unlimited Range Average and Range is of jurisdictions with a cap 5 Jurisdictions with unlimited payout allowed 5 Jurisdictions have a maximum payout of 480 hours

16 MARKET COMPARISON SEVERANCE AT AIRPORTS 22 Airports Responded to Survey. 17 airports pay some sort of severance - 9 airports paid out unused sick leave at rates between 25% and 100% of unused leave - 5 airports applied unused sick leave to improve pension payment or service credit - 3 Airports paid severance based on years of service with most common method being one week of severance for each year of service up to 6 months.

17 MARKET COMPARISON Multiple Surveys Reviewed Private Sector GENERAL SURVEY INFORMATION SHRM, World at Work, Compdata, CBG Benefits, - Surveys generally cover thousands of organizations nationwide - Generally surveys small companies predominantly. Often between 60 and 85% of organizations reporting have 500 or less employees with some surveys having about 60%~of organizations reporting with less than 100 employees - Surveys are very broad in scope so hard to know the details and break down to like size companies and industries - However, can glean several trends

18 MARKET COMPARISON Private Sector GENERAL SURVEY INFORMATION - 65 to 90 percent of organizations provide paid leave that can be used for sick leave - About 60% use Traditional Sick/Vacation type systems and 40% use a Paid Time Off programs or PTO - Sick Leave Accrual Rate appears to be about 9 days with 3 additional Personal Days (12 total) - Majority of companies allow rollover - About 15% of Traditional Sick plans allow payout on termination in some fashion - More than 80% of PTO programs allow payout on termination - CompData survey of 3700 employers found 61% have a severance policy in place

19 Conclusion MAC has already made changes to its policies that places its Sick Leave and Severance obligations at the low end of the local public sector market. Changing the union contracts to limit the current obligations will be extremely difficult to accomplish. Given the relatively low cost of the current plan and the current organized vs non-organized gap any policy change further diminishing this benefit will be problematic. Sick Leave and Severance Policies are reasonable relative to the organizations that MAC competes with for employees.

20