Can you imagine if your small business had a policy that allowed your employees to bank hundreds of unused sick days, and in some cases paying them out upon retirement? Well that’s what’s happening at city halls near you.
New research recently released by CFIB shows the practice of government employees “banking” sick days have created a liability of $90 million in Metro Vancouver which taxpayers could be on the hook for.
Banking sick days means if an employee doesn’t use all their allotted sick days in a year, they can save them for later. For example, in both Richmond and Vancouver, employees get 20 paid sick days per year which are bankable up to 261. In addition, many municipalities offer additional benefits in their sick day plans, such as cash payouts, extra vacation, or early retirement. The result? Massive costs which fall on taxpayers’ shoulders.
These practices are rare for private companies, yet those private employers’ and employees’ taxes go towards paying these expensive benefits. While it makes sense to have a safety net for ill employees, this is an expensive and ineffective method. It contributes towards the unsustainable spending path the vast majority of BC municipalities are on, with spending outpacing population growth four-fold over the past ten years across BC municipalities (after adjusting for inflation).
This practice is not isolated to just Metro Vancouver, and is common across the province. CFIB is calling on local governments to control costs and replace these plans with
- 15 of the 17 sick leave plans examined allow banking of sick days, compared to less than 3 per cent in the private sector. This practice lets employees roll over sick days, to accumulate to use in future years. Almost half the municipalities examined allowed banking of 250 or more days.
- The report finds that collectively, Greater Vancouver residents are on the hook for $90 million due to employee banked sick days.
- More than half of the sick day policies provide extra perks, such as cash payouts, extra vacation, or early retirement. For example, in Vancouver, employees can receive up to an additional four days vacation or days pay annually, known as “gratuity days”.
- Only Burnaby and New Westminster have moved away from sick day banks, with employee-funded short-term disability plans instead.