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City attorney warns payout of banked sick time could expose city to legal and fiscal risk
Summary
At an Oct. 21 personnel special meeting, officials debated whether to pay out accrued sick leave to employees deemed disabled. The city attorney warned such payouts could be treated as wages under state law, risking penalties; members deferred action and plan an executive session on the personnel case.
The Personnel Special Meeting on Oct. 21 considered whether the city should change its sick-leave policy to pay out accrued sick time to employees deemed disabled. City Attorney Miss Grove urged caution, saying the proposal raises legal and fiscal questions and recommending a uniform policy rather than ad-hoc payouts.
"When you start paying out for leave, it becomes wages," City Attorney Miss Grove said, warning the change could trigger the West Virginia Wage Payment and Collection Act and its penalties. She told the committee the options include paying out to everyone, not paying out sick leave, or paying at a reduced rate.
The Chair expressed concern about the scale of potential liability if the city were to pay out banked hours that have accumulated over years. "That is a massive liability to consider," the Chair said, noting some employees have accrued very large balances.
A committee member offered an illustrative example: "there's, you know, about 1900 hours" for one employee, which participants used to estimate potential long-term costs. Staff also noted short-term disability arrangements that can allow sick leave to "supplement" insurance benefits: "the short term pays out 900 maximum," staff said, and accrued sick time can be used to bring earnings closer to full salary for a limited period.
Legal counsel reviewed how PEIA and federal law interact with local policy. Miss Grove said PEIA guidance and disability-accommodation law can allow an employer to hold a position open and provide leave for up to a year if there is a credible doctor’s note indicating the employee can reasonably return to work. She cited a state case in which an extended absence related to pregnancy led a court to require a longer accommodation: "As a reasonable accommodation, we should have given her the 21 weeks," she said.
Committee discussion distinguished three sequential phases for an extended absence: the 12-week FMLA protection period, a short-term disability phase that can be supplemented with sick leave, and a long-term disability phase that often results in separation and reposting the position. Members debated whether the city should allow supplementation during long-term disability or instead provide a one-time payout to close out obligations; Miss Grove cautioned that one-off payouts that treat accrued sick time as wages could prompt claims from other employees and create equal-protection issues.
Officials also compared the city's practice with other local governments. Miss Grove observed that most nearby municipalities do not pay out sick leave at termination; Loudoun County was cited as an example that sometimes pays at a reduced rate while others (named in the discussion) do not pay out.
After extended discussion about legal exposure, administrative burden, and fiscal impact, the committee agreed it was not ready to make a recommendation to the council that night. The Chair said the personnel matter required a closed session and proposed bringing the individual case to executive session for further personnel-level discussion. No formal policy change or vote was taken at the meeting.
The committee also noted the sick-leave donation program as a separate item for staff follow-up.
