Bill To Cap Public Sector Golden Parachutes Introduced In Senate

SPRINGFIELD, IL — A new Senate bill looks to limit limit golden parachute payments for public officials, who can leave taxpayers picking up millions of dollars in compensation on their way out. Even when leaving in scandal, Illinois public executives can pocket exorbitant severance packages rivaling those in the private sector, the Better Government Association found.

In response, Sen. Tom Cullerton (D-Villa Park) Tuesday introduced the Government Severance Pay Act (SB 3604) to cap payment packages for departing public executives to a maximum of 20 weeks of compensation and stop employees who get fired for misconduct from getting any severance at all.

“It’s time to get control of these huge buyouts for public executives and institute some best practices,” Cullerton said. “Taxpayers deserve to have their hard-earned money protected. Let’s end these golden parachutes now.”

Attorneys for governmental entities often counsel elected officials to approve costly payouts to stave off potential employment litigation. The new bill attempts to make it easier for those in office to avoid ever having to make such decisions.

“Time and time again government officials who are found abusing the public's trust are allowed to walk away not just unpunished, but, in fact, rewarded," BGA CEO David Greising said. "The Government Severance Pay Act acknowledges that severance packages are a part of today’s competitive employment market, while at the same time protecting taxpayers from six-figure giveaways.”

A BGA analysis last year found nine recent instances at public bodies that cost taxpayers more than $5 million at state universities, transit agencies and elsewhere.

Since then, former Des Plaines District 62 Superintendent Floyd Williams Jr. picked up a $127,000 severance package after he resigned amid allegations of "inappropriate or offensive" comments. And in Vernon Hills, Village Manager John Kalmar was asked to resign for unspecified reasons, although the terms of his financial settlement have not yet been disclosed.

The proposed bill would allow government in Illinois to remain competitive while cutting out the abuses that cost taxpayers, according to the BGA. Florida has a similar severance cap on the books, while California's is limited to K-12 superintendents.

Read: more about Golden Parachutes in Illinois from the Better Government Association

Full Text: Government Severance Pay Act

Definitions. As used in this Act: "Misconduct" includes, but is not limited to, the following:

(1) Conduct demonstrating conscious disregard of an employer's interests and found to be a deliberate violation or disregard of the reasonable standards of behavior which the employer expects of his or her employee. Such conduct may include, but is not limited to, willful damage to an employer's property that results in damage of more than $50, or theft of employer property or property of a customer or invitee of the employer.

(2) Carelessness or negligence to a degree or recurrence that manifests culpability or wrongful intent, or shows an intentional and substantial disregard of the employer's interests or of the employee's duties and obligations to his or her employer.

(3) Chronic absenteeism or tardiness in deliberate violation of a known policy of the employer or one or more unapproved absences following a written reprimand or warning relating to more than one unapproved absence.

(4) A willful and deliberate violation of a standard or regulation of this State by an employee of an employer licensed or certified by this State, which violation would cause the employer to be sanctioned or have its license or certification suspended by this State.

(5) A violation of an employer's rule, unless the claimant can demonstrate that:

(A) he or she did not know, and could not reasonably know, of the rule's requirements;

(B) the rule is not lawful or not reasonably related to the job environment and performance; or

(C) the rule is not fairly or consistently enforced.

(6) Other conduct, including, but not limited to, committing criminal assault or battery on another employee, or on a customer or invitee of the employer, or committing abuse or neglect of a patient, resident, disabled person, elderly person, or child in her or his professional care.

"Severance pay" means the actual or constructive compensation, including salary, benefits, or perquisites, for employment services yet to be rendered which is provided to an employee who has recently been or is about to be terminated.

"Unit of government" means and includes all boards, commissions, agencies, institutions, authorities, and bodies politic and corporate of the State, created by or in accordance with the constitution or statute, of the executive branch of State government and does include colleges, universities, and institutions under the jurisdiction of the governing boards of the University of Illinois, Southern Illinois University, Illinois State University, Eastern Illinois University, Northern Illinois University, Western Illinois University, Chicago State University, Governor State University, Northeastern Illinois University, and the Board of Higher Education.

"Unit of government" also includes units of local government, school districts, and community colleges under the Public Community College Act.

Section 10. Severance pay.

(a) A unit of government that enters into a contract or employment agreement, or renewal or renegotiation of an existing contract or employment agreement, that contains a provision for severance pay with an officer, agent, employee, or contractor must include the following provisions in the contract:
(1) a requirement that severance pay provided may not exceed an amount greater than 20 weeks of compensation; and
(2) a prohibition of provision of severance pay when the officer, agent, employee, or contractor has been fired for misconduct by the unit of government.
(b) Nothing in this Section creates an entitlement to severance pay in the absence of its contractual authorization or as otherwise authorized by law.