Payout of Leave Balances Upon Final Separation

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Lump Sum Payout (Final Entitlement) for Non - Pedagogical Administrative Management Employees

Upon retirement, resignation, or any other final separation from employment (including death) of an administrative employee covered by the Management Pay Plan (MPP), a lump sum payment will be generated which may include annual leave, sick leave, vested annual leave, vested sick leave, and compensatory time, as described in the relevant sections of the rules and policies pertaining to managerial accrual, vesting, carryover, and rules for payout of leave balances in these policies.

Managers intending to separate from DOE service do not have the option of being compensated for unused leave balances by remaining on the DOE payroll after their last day of work in DOE service.

Managerial Lump Sum payments are calculated according to, and subject to the limitations of City rules and policies and are audited by the Office of the NYC Comptroller before payment is issued to the employee.

This payment shall not be creditable for the purposes of computing compensation for pension benefits.

The maximum total lump-sum payment for all entitlements shall not exceed the compensation earnable in the 12-month period immediately preceding separation from service.

Note: Pedagogic Managers such as Superintendents, Administrative Assistant Superintendents, etc., are covered by Chancellor’s Regulation C-605.

Last Day of Work

A manager’s “last day of work in DOE service” is the last day a manager actually works all of their regularly scheduled daily work hours. For example, if a manager is regularly scheduled to work for seven hours per day, their last day of work is the last day they worked at least seven hours.

Charges to leave balances made immediately before a manager’s last day of work in DOE service are      subject to the regulations governing lump sum payments contained in these rules and regulations.  If leave is charged after the last day of work in DOE service, the following actions will be taken:

  • The retirement date will be adjusted as if the retirement occurred on the last date of in-person service;
  • Any annual and sick leave accrued after the adjusted retirement date will be deducted;
  • The leave used after the adjusted retirement date will be added; and
  • The salary received after the adjusted retirement date will be deducted.

Negative Leave Balances Upon Final Separation

A manager who has negative leave balances upon final separation from DOE service will receive a bill which represents the monetary equivalent of the negative leave balances owed to the agency.

Payment Options

Retirement

In the case of retirement, lump-sum payments shall be made under one of the following optional methods, as elected by the employee:

  1. One lump-sum payment in the calendar year of retirement if retirement takes place prior to July 1 of such year, and in two installments with the first payment made in the calendar year of retirement and the second installment in the next following calendar year if retirement takes place on or after July 1 of the calendar year of retirement.
  2. In one lump-sum payment in the calendar year of retirement.
  3. In one lump-sum payment in the calendar year immediately following the calendar year of retirement.
  4. In two installments, with the first payment made in the calendar year of retirement, the second installment in the next following calendar year.
  5. In three installments, with the first payment made in the calendar year of retirement, the second installment in the next following calendar year, and the third installment in the second calendar year following the calendar year of retirement.
  6. In two installments, with the first payment made in the calendar year immediately following the calendar year of retirement, and the second installment in the next following calendar year.
  7. In three installments, with the first payment made in the calendar year immediately following the calendar year of retirement, the second installment in the next following calendar year, and the third installment in the third calendar year following the calendar year of retirement.

In all cases, selection of the foregoing options must be made at least ten days prior to the time application for retirement is filed. If no such selection is made, the employee shall be deemed to have selected option #1.

Other than Retirement

An employee may elect to receive lump-sum payment upon termination of services other than retirement under one of the following optional methods:

  1. In one lump-sum payment in the calendar year of termination services.
  2. In one lump-sum payment in the calendar year immediately following the calendar year of termination of services.
  3. In two installments, with the first payment made in the calendar year of termination of services and the second installment in the next calendar year.

Where the employee makes no election before the effective date of termination of services, the employee shall be deemed to have elected option #1.

Vested Leave Balances – Change in Status

Non-Managerial to Managerial 

All annual leave, sick leave, and compensatory time balances of a non-managerial employee who is subsequently promoted, assigned, or reassigned to a managerial position covered by these regulations will be vested and transferred to vested leave banks. Such leave banks may be utilized in accordance with relevant regulations regarding use of leave and are applicable towards lump-sum payment as set forth in section Lump Sum Payout (Final Entitlement) for Non - Pedagogical Administrative Management Employees.

Leave balances are to be utilized in the following manner:

  1. Current annual leave balances must be depleted before utilizing vested annual leave.
  2. Current sick leave balances must be depleted before vested sick leave balances can be utilized.
  3. Current annual leave must be depleted before utilizing vested compensatory time. 

Managerial to Non-Managerial 

If an employee in a managerial position is subsequently demoted or voluntarily accepts a non-managerial administrative position covered by these regulations, all previously vested balances earned as a non-manager will be transferred to their current leave banks, and the leave balances earned as a managerial employee will be transferred into vested leave banks. Such leave banks may be utilized in accordance with relevant regulations regarding use of leave. 

Leave balances are to be utilized in the following manner:

  1. Current annual leave balances must be depleted before utilizing vested annual leave.
  2. Current sick leave balances must be depleted before utilizing vested sick leave.
  3. Compensatory time must be utilized before annual leave (for non-sick requests). 

10-Month Pedagogue to Managerial Position

A 10-month pedagogical employee transitioning into a position covered by the Management Pay Plan during July or August will be entitled to retain pro-rata summer pay earned during the preceding work year.

Note: There is no vesting of vacation days for CSA-covered pedagogues, other than an Education Administrator, who subsequently becomes a manager.

Payment for Unused Annual Leave

Managerial lump-sum payments based on continuous service in the Department of Education and/or in City agency service for all current unused annual leave carried over pursuant to the provisions of the sections titled Normal Maximum Annual Carryover and Carryover of Foregone Annual Leave shall be limited as follows:

  1. Managers with up to 5 years of continuous service - up to a maximum of 3 years of accrual.
  2. Managers with between 5 years and 10 years of continuous service - up to a maximum of 4 years of accrual; and
  3. Managers with more than 10 years of continuous service - up to a maximum of 5 years of accrual.

This is in addition to payment for vested or banked annual leave as permitted in the section titled Vested Leave Balances – Change in Status.

Continuous service as a DOE/City employee, regardless of pay plan, shall be the basis for determining the annual leave accrual rate for employees covered by the Pay Plan for Management Employees. If a manager uses more annual leave than can be earned in one year during the twelve (12) months preceding final separation, the lump-sum payment may require adjustment to reflect any difference between the salary at which they were paid for the additional leave used and the salary at which such leave was earned.

However, if the manager has been approved to carry over more than two years accrual of annual leave, the amount of annual leave that can be used without reduction of the final lump-sum payment is one year's accrual of annual leave plus the amount of such approved excess carryover.

Sample Scenario: A manager accrues 25 annual leave days per year and has 15 approved carryover days. That manager may utilize 40 days of annual leave (subject to supervisory approval) in their final year of service without a reduction to their lump sum payment, even if the 15 carryover days were accrued at a lower salary.

  1. Current Annual Leave - Effective January 3, 2000, compensation for annual leave accruals earned as a managerial employee shall be as follows:
    • All current unused leave earned during the six-year period immediately preceding separation shall be paid at the salary rate at which it was earned. In using annual leave, that which was earned first shall be used first either as time or as pay. Vested or banked annual leave may be used only after current annual leave has been exhausted.
    • All current unused annual leave earned more than six years prior to the date of final separation shall be paid at the average weighted salary rate received or receivable during the year ending six years prior to the date of final separation.
  2. Vested Annual Leave
    • An employee in a management position as of April 1, 1979, shall be compensated at the rate of pay he or she was earning in the twelve-month period preceding March 31, 1979, or the current minimum rate of pay for the managerial level held at that time, whichever is greater.
    • Annual leave accruals earned as a non-managerial employee who subsequently enters the management service shall be compensated at the current minimum rate of pay for the position in which the employee was serving immediately preceding entry in the management position or the rate at which the employee was paid, or the current rate of pay the employee would have been earning in the permanent title held prior to entering the managerial service, whichever is greatest.

Payment for Unused Sick Leave

The number of sick leave days allowable for lump-sum payment is determined as follows:

  1. Vested Days - All employees with at least ten years of continuous service may be credited with one day for each two days of sick leave earned. The amount of vested time on which this benefit is based may not exceed 200 days. Accordingly, the maximum payment possible is 100 days.
  2. Days Earned Subsequent to Vesting - Only employees with more than 10 years of continuous service and a final balance of at least 60 days after vesting may be credited with one day for each three days earned.
  3. The total payment for vested sick leave accruals and sick leave earned subsequent to vesting may not exceed 120 days.
  4. Transfer contributors to the New York City Teachers' Retirement System shall be credited one day for every two days of earned but unused sick days up to a maximum of 200 days. Therefore, the maximum payment shall not exceed 100 days. The dollar amount shall be calculated at the rate of 1/200th of their final salary.

Payments made under this policy for unused sick leave shall be made in the following manner:

  1. Current Sick Leave - Effective January 3, 2000, sick leave accrued subsequent to vesting is creditable toward lump-sum payment as follows:
    • All current unused sick leave earned during the six-year period immediately preceding the date of final separation shall be paid at the salary rate at which it was earned. In using sick leave, that which was earned first shall be used first either as time or as pay. Vested or banked sick leave may be used only after current sick leave has been exhausted.
    • All current unused sick leave earned more than six years prior to the date of final separation shall be paid at the average weighted salary rate received or receivable during the year ending six years prior to the date of final separation.
  2. Vested Sick Leave
    • A non-managerial employee entering a management position after April 1,1979, shall be compensated at the current minimum rate of pay for the position in which the employee was serving immediately preceding entry in the management position, or the rate at which the employee was paid, or the current rate of pay the employee would have been earning in the permanent title held prior to entering the managerial service, whichever is greatest.
    • Effective January 3, 2000, sick leave accrued subsequent to vesting is creditable toward lump-sum payment as follows:
      • All current unused sick leave earned during the six-year period immediately preceding the date of final separation shall be paid at the salary rate at which it was earned. In using sick leave, that which was earned first shall be used first either as time or as pay. Vested or banked sick leave may be used only after current sick leave has been exhausted.
      • All current unused sick leave earned more than six years prior to the date of final separation shall be paid at the average weighted salary rate received or receivable during the year ending six years prior to the date of final separation.

Determinations on Managerial Carryover Letters for Lump Sum Processing

In the absence of a letter which authorizes the carryover of excess annual leave, the Chief Human Resources Officer (CHRO) of the Division of Human Resources has the authority to review supporting documentation and, if appropriate, can authorize the carryover of such excess annual leave. If the CHRO does not find sufficient merit to approve the carryover of such excess annual leave, such time must be transferred to the employee’s sick leave balance at the end of the employee’s leave year. This section shall not be construed as authorizing the use of such excess balances for the purpose of lump sum payment beyond the normal limits prescribed in the Lump Sum Payment Procedures.

Financial Disclosure Termination Reports

No Department of Education employee who is a Conflict of Interest (COIB) Annual Financial Disclosure Filer will receive a lump sum payment to which they may be entitled until they have filed a Financial Disclosure Termination Report with the COIB. The employee must file within 60 days of their last day of DOE service and obtain a Certificate of Compliance from the COIB, which must be furnished to the agency. Failure to file the termination report may result in civil penalties, as outlined in the Conflicts of Interest (COIB) Financial Disclosure section of this policy.

Payout of Leave Balances Upon Final Separation: Non-Managerial and Original Jurisdiction Employees

Upon retirement, resignation, or any other final separation from employment (including death) of a non-managerial or original jurisdiction administrative employee, a lump sum payment will be generated which may include annual leave, sick leave, and compensatory time as described in the relevant sections of the rules and regulations pertaining to the accrual, vesting, and carryover of leave balances in these policies.  

Lump sum payouts will be generated in accordance with applicable collective bargaining agreements. The lump sum payment shall not be creditable for the purposes of computing compensation for pension benefits. 

Annual Leave 

Annual leave balances (including excess annual leave approved for carry over) will be paid to the employee.

Sick Leave 

Employees will be paid out for their sick leave balances (if available) per the criteria listed below:

  • Employees hired prior to 7/1/04 are eligible to be paid half of their sick leave balances, provided they have ten years of City service.  Employees must have a minimum of two (2) sick days accumulated to qualify.
  • Employees hired on or after 7/1/04 are eligible to be paid for one third of their accumulated sick leave balances, provided they have ten years of City service. Employees must have a minimum of three (3) sick days accumulated to qualify.
  • UFT members are eligible to be paid one half (1/2) of their accumulated sick leave balances regardless of start date, provided they meet the ten-year service requirement. Employees must have a minimum of 2 sick days accumulated to qualify.

The maximum payout of sick leave is capped at 100 days regardless of the payout formulas listed above. Any accumulation of sick leave days over 200 days will not be considered in the payout calculation for sick leave balances.  

Compensatory Time

All compensatory time balances will be paid to an employee. 

Floating Holiday 

Any days credited as floating holidays must be used in the calendar year in which they were earned and may not be carried over into a succeeding year. Floating holidays are not eligible for payout upon final separation. If a floating holiday is not used prior to an employee’s last day of work, the day is considered forfeited.

Terminal Leave – Non-Managerial Employees

The Division of Human Resources (DHR) will grant terminal leave with pay to non-managerial and original jurisdiction staff who are retiring as an alternative to a lump sum payout of accrued sick leave balances. These payouts will be made in accordance with all applicable collective bargaining agreements, regulations and pay plans.

Employees must have ten (10) years of consecutive City service to be eligible for terminal leave.

Once the terminal leave has been initiated, it cannot be reversed.

The terminal leave process is initiated when an employee notifies their Human Resources Director, Payroll Secretary, or Timekeeper that they intend to retire. An appointment will be scheduled with the employee to discuss next steps and payment options.

Terminal Leave Options

Terminal leave is only available after accrued annual and compensatory leave balances have been exhausted and is computed by one of the following methods:

Method A

  • Employees hired prior to 7/1/04 are eligible for one half of their sick leave balances. Must have a minimum of two (2) sick leave days accumulated.
  • Employees hired on or after 7/1/04 are eligible for one third of their sick leave balances. Must have a minimum of three (3) sick leave days accumulated.
  • Eligibility for terminal leave is based on the employee’s title and collective bargaining agreement.

Terminal leave computed by this method is not to exceed 100 workdays, which requires an accumulation of 200 sick leave days. Any accumulation of sick leave days over 200 is not eligible for payment and will be expired.

Method B

To be eligible for method B, employees must have a minimum of 22 sick leave days accumulated.

  • Years of service and sick leave balance are reviewed to determine the number of terminal leave days an employee is entitled to under Method B.
  • Employees with 22 or more sick leave days are, by default, eligible to choose either Method A or Method B.
  • Employees with less than 22 sick leave days are ONLY eligible for Method A.
  • Employees who were employed by the Department on or before January 1968, at the time of retirement, will receive a minimum of one (1) calendar month of terminal leave without regard to unused sick leave accumulation.
  • Employees receive one (1) calendar month of terminal leave for each terminal leave twenty-two (22) days of unused accumulated sick leave. Terminal leave computed by this method shall not exceed one (1) calendar month for every ten (10) years of service, prorated at three (3) calendar days per year of service, or major fraction thereof.

10-Month Employees

For 10-month employees, terminal leave must conclude by the end of the school year and before the summer break to avoid payroll processing disruptions. If a 10-month employee's terminal leave extends beyond the current school year, they have two options: either begin their terminal leave at the start of the next school year to prevent any disruptions or choose to receive a lump sum payout.

Should an employee choose the lump sum payment option, they will receive a lump sum payment equivalent to half of their unused sick leave. It is important to note that 10-month employees do not accrue annual leave; however, any remaining frozen annual leave will be paid out upon retirement.

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