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Vancouver, December 6, 2016 – The practice of government employees “banking” sick days has created a liability of $90 million in Metro Vancouver, according to the latest research from the Canadian Federation of Independent Business (CFIB).
Banking means that 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 and can bank up to 261 and up to an additional 120 “gratuity” days which can be cashed out when leaving the service (after minimum 2 or 3 years service, respectively; see table below for details on other municipalities). The result is municipalities accumulate massive liabilities. In Vancouver, the liability in 2014 for its sick day bank was nearly $36 million, or $55 per resident, while in Richmond taxpayers are on the hook for a liability of about $17 million, or $84 per resident.
“It makes sense to have a safety net in place for cases where employees fall ill in the short-term,” said Richard Truscott, vice-president for BC and Alberta. “Unfortunately, many of the policies in Metro Vancouver go far beyond this, allowing employees to bank hundreds of sick days, and many also providing cash or additional vacation days totally unrelated to illness.”
15 of the 17 municipal government plans examined in Metro Vancouver allow for banking sick days, versus only three per cent of private sector plans. Burnaby and New Westminster are the two municipalities that have moved away from the practice, introducing affordable short-term disability plans. Unlike sick day banking policies which provide unequal benefits based on seniority, short-term disability plans offer equal benefits to all employees.
“It’s good to see at least a couple municipal governments have recognized that this is an ineffective, costly and unfair way to deal with employee illness. These plans cost millions, resulting in tax increases,” notes Truscott. “Many municipal governments in the region are currently negotiating new collective agreements with unions. It’s beyond time to remove sick day banking and introduce affordable short-term disability plans to better align sick leave provisions with those in the private sector.”
To arrange an interview with Richard Truscott, vice-president for BC and Alberta, please contact 604-684-5325 or [email protected].
CFIB is Canada’s largest association of small- and medium-sized businesses with 109,000 members across every sector and region, including 10,000 in B.C.