CPS Spends Millions on Workers For Unused Sick and Vacation Days

BY BARBARA ROSE AND PATRICK REHKAMP

Better Government Association

CHICAGO SUN-TIMES

Last Modified: Feb 3, 2012 02:13AM

The cash-strapped Chicago Public Schools system spends tens of millions of dollars annually on a perk that few other employers offer: cash to departing employees for unused time off.

Since 2006, the district paid a total $265 million to employees for unused sick and vacation days, according to an analysis of payroll and benefit data obtained by the Better Government Association under the Illinois Freedom of Information Act.

By far the largest share — $227 million — went to longtime employees for sick days accumulated over two or three decades.

Mayor Rahm Emanuel recently ordered a halt on paying unused sick time to non-union employees at City Colleges of Chicago after the BGA found at least $3 million in such payouts to former employees over the last decade. Among the biggest beneficiaries was former Chancellor Wayne Watson, who has received $300,000 of a promised $500,000 payout for 500 unused sick days.

“This policy is unacceptable to the mayor and not consistent with the city’s sick day policies for its own employees,” said Jennifer Hoyle, a spokeswoman for Emanuel. The mayor also directed other city agencies, including CPS, to halt such payments, review their policies and devise plans to end the practice permanently.

At CPS, the top payouts went to top brass, including more than 300 longtime principals and administrators, who received more than $100,000 during the six-year period from 2006 to 2011, the BGA found. The highest payment topped $250,000.

Beneficiaries included former schools CEO Arne Duncan, now U.S. Secretary of Education, who received $50,297 for unused vacation time when he left in January 2009, according to the data. Duncan now believes the policy should be re-evaluated.

“People should take a good hard look at whether or not that policy makes any sense and whether it should be kept in place in these tight budget times,” Duncan said through a Washington D.C.-based department spokesman.

The district’s policy of paying for accrued sick and vacation time drains an average of $44 million annually at a time when CPS is struggling to balance its nearly $6 billion budget by hiking property taxes, cutting staff and dipping into reserves. The obligation to pay this accumulating benefit contributes to the district’s long-term debt, showing up as a fast-growing liability on CPS’ balance sheet.

Moreover, payouts increase the Chicago Teachers’ Pension Fund’s liabilities because employees are allowed to use sick leave payouts to boost their final average salaries, which in turn increases their annual pensions.

In all, about 19,000 employees received sick and vacation payments during the six-year period. The average payout was just under $14,000.

Most private employers adopt a “use or lose it” policy for sick and vacation days to hold down costs and limit future obligations. Many question the wisdom of rewarding employees when they leave.

“What you’re doing is paying someone when they’re walking out the door, and that’s basically money walking out the door,” said Mark Schmit, vice president of research for the Alexandria, Va.-based Society for Human Resource Management.

Only 6 percent of employers pay for unused sick leave, while 16 percent pay unused vacation time, according to the association’s 2011 employee benefit survey of 600 human resources managers, largely at private employers.

CPS may be alone among Illinois school districts in paying cash for unused sick leave, said Thomas Kersten, professor emeritus of educational leadership at Roosevelt University.

“I’m not familiar with any district besides Chicago that pays for sick days,” he said.

Members of the Teachers’ Retirement System, which includes Downstate and suburban teachers, can accumulate as many as 340 uncompensated sick days for up to two years of credit, allowing them to retire two years early with full pension benefits.

CPS employees can accumulate as many as 325 days. They become eligible for payouts after working at least 20 years or reaching age 65. Depending on their tenure, they receive between 85 percent and 100 percent of their accumulated sick leave value.

Here are the top recipients of the practice, according to the data:

◆ Ascencion Juarez, CPS’ former chief human resources officer, collected $250,787 after he retired in 2009 after 38 years, including $200,285 in sick pay. Juarez declined to comment.

◆ Former Chief Education Officer Barbara Eason-Watkins collected $239,849 after she retired in 2010 after 35 years, including $159,843 in sick pay.

◆ Former Lake View High School Principal Scott Feaman received $211,641 after he retired in 2011 after 36 years, including $171,604 in sick pay.

Eason-Watkins and Feaman each used sick days to sweeten their pensions. As a result, Eason-Watkins collects an additional $7,440 annually in pension payments for the rest of her life, and Feaman collects $4,425 more, according to the Chicago Teachers’ Pension Fund.

Niether Eason-Watkins nor Feaman returned calls seeking comment.

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