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N.J. Comptroller: Toms River Inconsistent in Granting 'Compensatory' Time to Some Employees

N.J. Comptroller: Toms River Inconsistent in Granting 'Compensatory' Time to Some Employees
An investigation by the Office of the State Comptroller found Toms River granted compensatory time to high-level executive employees in a manner that does not comply with state law, though the township eventually came into compliance.

The OSC investigation, released Wednesday, looked at 14 municipalities and found 10 of those 14 municipalities – including Toms River – awarded their executives more than 4,000 hours of compensatory time between 2010 and 2011 without passing an ordinance.

In Toms River specifically, the municipal government awarded four of its department heads "hundreds of hours of compensatory time in a manner that was inconsistent with the township’s own adopted policies," the report stated.

"In some cases, compensatory time was awarded in a manner that was inconsistent with the township’s formally adopted employee handbook prohibiting such awards," according to the report.

The only individual named in the report was Business Administrator Paul Shives, who, according to the investigation, was given compensatory time despite no ordinance being on the books in town allowing such a practice.

While Shives' contract disallows overtime, compensatory time is "allowed on an hour-for-hour basis for hours worked over 40 hours in any work week.”

It further provided that, in the event that the township did not renew his contract at the end of five years, Shives would be paid for all accumulated and unused compensatory time.

"Awarding these benefits to the BA in his contract, even assuming the contract was attached to the resolution approved by the council, did not meet the transparency requirements of the statute," the report said, since Shives' contract was approved by a simple township council resolution, which does not carry the same level of transparency as an ordinance setting forth official policy.

Compounding matters, in 2010 – after Shives was hired – the township adopted an employee handbook that specifically prohibited the accumulation of compensatory time by department heads and salaried employees. The handbook did not except the position of the Business Administrator.

On December 19, 2011, according to the report, the mayor and Shives executed an addendum to the employment contract which expanded the circumstances under which Shives could receive the benefit of his accumulated compensatory time.

"Specifically, it permits him to utilize such time in the form of paid leave if he resigns, retires in good standing or is terminated, up to a maximum of 1,180 hours – potentially resulting in more than six months of such leave," the report stated. "In light of the BA’s salary – $172,600 in 2010 and $190,388 in 2011 – this is a potentially sizeable allowance."

The practice of awarding high-level employees compensatory time did not end with the BA's position, however. The Comptroller's office found another employee, who was not named, was awarded 40 hours of compensatory time after the handbook prohibiting the practice had been adopted.

State officials have said that the township has since complied with the law.

A Jan. 7, 2014 addendum to Shives' contract eliminates his compensatory pay and replaces it with 180 days' severance pay upon termination or non-renewal of his contract, and an ordinance passed earlier this year brought the township as a whole into compliance with state statutes by specifically allowing a single week of compensatory time for other employees.

"We encourage the township to similarly modify the employee handbook to resolve any inconsistencies with the new ordinance," the report said.

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