GovernmentExecutive.com

A bill introduced in the House on Tuesday would allow workers in the Federal Employees Retirement System to cash out their unused sick leave upon retirement.

The benefit also would apply to employees covered under the Foreign Service Pension System and U.S. Postal Service retirement plan.

FERS employees currently cannot count unused sick leave toward their retirement annuity. Employees hired before 1984 are covered under the Civil Service Retirement System and do receive such credit for unused sick leave. The new legislation, introduced by Rep. James Moran, D-Va., would provide FERS employees with a benefit equal to that of their CSRS counterparts, allowing them to add any unused sick leave to the number of years they have worked in the government to determine their annuity at retirement.

The House in July 2008 passed a similar provision as part of the Family Smoking Prevention and Tobacco Control Act. While the sick leave provision received overwhelming support in the House, a threat from Sen. Richard Burr, R-N.C., to block it and a veto threat from former President George W. Bush -- both unrelated to the sick leave provision -- helped stall the measure in the Senate.

Federal employees now receive 13 days of sick leave annually and can carry over unlimited amounts of sick leave annually. But the discrepancy between the two retirement systems has prompted more FERS employees to use up their sick leave as they approach retirement. For example, 85 percent of CSRS employees said they conserved most of their sick leave, while 75 percent of FERS workers reported they would use as much of it as possible as they neared retirement, according to a 2004 survey by FPMI Solutions, an Alexandria, Va.-based human resources staffing and training company.

"FERS' use-it or lose-it system for sick leave hampers productivity and increases training costs," Moran said. "We need to be incentivizing the accrual of sick leave, not encouraging employees to call in sick in the weeks leading up to retirement."

Federal employees' and managers' associations have long supported the sick leave measure.

"The federal government got the unused sick leave issue right under CSRS," said Richard Brown, president of the National Federation of Federal Employees. "They gave employees a modest benefit for their time, and absentee rates remained very low. The system worked well for everyone. It makes a lot of sense to return to a system where the judicious use of sick leave is rewarded, not penalized."