These NJ Towns Haven’t Corrected Massive Sick Leave Payouts: State

NEW JERSEY — Nine New Jersey municipalities refused to correct their sick and vacation leave payout policy, and the Office of the State Comptroller said they could lose state funding.

This comes more than a year after Acting State Comptroller Kevin D. Walsh ordered a review of 60 towns' policies, and found all but three of them continued making large payouts to public workers for accrued sick time, he said. Walsh asked these towns to make an action plan to correct these overpayments, and said a majority of them have begun to do so.

However, Walsh named nine towns that he said have failed to cooperate "in the development of a corrective action plan by evaluating and addressing deficiencies in their sick and vacation leave policies.” In a letter sent Sept. 28 to Gov. Phil Murphy and the state Legislature, Walsh said his office could request that the state "withhold the expenditure of state funds that may be due" to these towns.

Walsh's office ordered a review of sick and vacation leave policies last July in five dozen municipalities, to determine if they were in full compliance with two laws, which revamped sick leave and accrued vacation time payouts.

A 2007 law limited some senior state employees to a $15,000 payout for accrued sick time and barred annual payouts for unused leave, rather than allowing them only at retirement. Lawmakers extended those rules to all employees hired after May 21, 2010 in 2010, saying that employees who are covered by the law "may be provided with one and only one form of sick leave payment: a payment of up to $15,000 at retirement from a pension system."

This 2010 law also extended a one-year cap on carryover of vacation leave to all employees of non-civil service municipalities and school districts.

The review found more than half of the towns paid out accumulated unused sick days in amounts greater than the cap of $15,000, and a majority had policies and contracts that would violate the 2007 law, Walsh said. He said there are potential cost savings for taxpayers and municipalities by correcting these overpayments.

Of those 60 municipalities, 57 of them failed to fully comply with the laws, with Walsh's office saying the review "generally found that the laws have been ignored, sidestepped, or undermined." So, the Office of the State Comptroller required that these towns provide a corrective action plan (CAP) "to address these failures." Towns were also required to do a legal review, have an independent fiscal assessment, provide a specific course of action to correct the failures, and get approval for the CAP from the municipality's governing body.

"Generally, most municipalities have begun the process of making corrections to sick and vacation leave policies," Walsh said.

However, Walsh said the following nine towns have not responded to his office's requests in recent months:

• Bridgewater
• Hamilton (Mercer County)
• Pennsville
• Piscataway
• Red Bank
• Rutherford
• Sparta
• Wantage
• West New York

"The failure of the nine municipalities to prepare a CAP, as directed by OSC, creates risks that taxpayer funds will be wasted and that unlawful policies will remain in effect," he said.

In his letter, Walsh his office may ask that the state withhold state funds due to these municipalities in 30 days.

Below are all the municipalities surveyed as part of the state comptroller's review.

Atlantic County

• Egg Harbor Township

Bergen County

• Hackensack City
• Lyndhurst Township
• Mahwah Township
• Ridgefield Park Village
• Rutherford Borough

Burlington County

• Burlington Township
• Evesham Township
• Lumberton Township
• Moorestown Township
• Pemberton Township

Camden County

• Bellmawr Borough
• Gloucester City
• Gloucester Township
• Haddonfield Borough
• Winslow Township

Cape May County

• Upper Township

Essex County

• Belleville Township
• East Orange City
• Verona Township
• West Orange Township

Gloucester County

• Franklin Township
• Mantua Township
• Woolwich Township

Hudson County

• Hoboken City
• Union City
• Town of West New York

Hunterdon County

• Raritan Township

Mercer County

• Hamilton Township
• Hopewell Township
• West Windsor Township

Middlesex County

• Monroe Township
• Old Bridge Township
• Piscataway Township
• South Brunswick Township
• South Plainfield Borough

Monmouth County

• Freehold Township
• Holmdel Township
• Middletown Township
• Red Bank Borough
• Wall Township

Morris County

• Town of Dover
• Florham Park Borough
• Lincoln Park Borough

Ocean County

• Beachwood Borough
• Lakewood Township
• Little Egg Harbor Township
• Toms River Township

Passaic County

• Clifton City
• West Milford Township
• Woodland Park Borough

Salem County

• Pennsville Township
• Somerset County
• Bridgewater Township
• Franklin Township
• Montgomery Township

Sussex County

• Sparta Township
• Wantage Township

Union County

• Berkeley Heights Township
• Plainfield City
• Town of Westfield