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Payment of Unused Sick Leave

Background
During the 2008 Legislative Session, regulations were passed permitting eligible employees to sell unused sick leave. Employees are eligible to sell unused sick leave if they are eligible to convert unused sick leave into extended retiree health insurance benefits. Generally speaking, employees hired prior to July 1, 2001 are eligible to convert unused sick leave into extended retiree health benefits.

On October 28, 2008, the West Virginia Department of Administration issued procedural rules specifying the process employees and state agencies were to follow to permit employees to surrender a portion of their unused sick leave for a taxable cash benefit. In the 2009 Legislative Session the provisions of the program were modified to their current form.

Eligibility
Employees who accrue sick leave and typically were hired in a benefits-eligible position prior to July 1, 2001 are eligible to sell sick leave. Nine-month faculty who previously were in a 12 month position and have a sick leave balance from prior service are specifically excluded upon passage of Senate Bill 695 in the 2009 Legislative Session.

Requirements
Employees who meet the eligibility guidelines are required to have a sick leave balance of at least sixty-five (65) days, or 487.50 hours, in order to sell sick leave. In addition, employees are required to have a balance of at least fifty (50) days, or 375.00 hours, upon selling their sick leave.

Details of the Program
Employees are not permitted to reacquire any sick leave days that are sold. Participation in the program does not restrict future accruals of sick leave nor the ability to use any unused and unsold sick leave to purchase retiree health insurance. Please see the Procedural Rules or WV State Code 5-5-6 for the specific details of the program. If any conflict between the description here or the Procedural rules or WV State Code 5-5-6 arises, the WV State code will prevail.

Repayment of Sick Leave to the State
If an employee leaves the benefits-eligible employment of the State of West Virginia within five (5) years, or 60 months, he/she must reimburse the State Employee Sick Leave Fund the amount of their gross payment plus 12% interest per year. Death or Retirement are not considered separation of employment for purposes of the sick leave buyout program.

How the payment is determined
The employee is paid 25% of their “daily rate of pay” for each day of sick leave sold to the State. The daily rate of pay is generally determined by dividing the employee’s current budgeted base annual salary by the number of working days in the current calendar year as determined by the WV Department of Administration. In 2015 there are 261 working days.

Example: An employee with a current base salary of $25,000 would be paid approximately $23.94 per day of unused sick leave.

$25,000/261 = $95.78, $95.78 X 25% = $23.94 the Daily Rate of Pay

Senate Bill 695 placed limitations on the maximum salary that may be considered determined upon the employee’s date of hire in a benefits-eligible position. Employees hired prior to July 1, 1988, the maximum salary that may be used to determine the daily rate of pay is capped at $80,400. Employees hired on and after July 1, 1988 and before July 1, 2001, the maximum salary that may be used to determine the daily rate of pay is capped at $50,400.

Maximum Lifetime Payment
Employee’s may not be paid more than $25,000 cumulatively.

The Application Process
Employees wishing to apply to sell unused sick leave to the State of West Virginia must complete the Application for Payment of Unused Sick Leave and the optional Federal and State Tax withholding certificates. Upon completion and having forms requiring a notary’s signature, return the forms to Benefits Administration in the Division of Human Resources. Benefits Administration will then produce another form which will indicate the number of days of unused sick leave the employee applied for to sell and the approximate amount of what the State will pay the employee for the unused sick leave. This second form will need to be signed by the employee and notarized, then returned to Benefits Administration. Upon receipt of the application, tax forms, and the form specifying the approximate amount of the payment, the employee’s application will be certified by WVU and submitted to the West Virginia Department of Administration for approval.

Payment
Upon receipt of the application certified by WVU and the other required documents, the West Virginia Department of Administration will review the application and determine if the application can be approved. If approved, the West Virginia Department of Administration will send Benefits Administration the approval for payment. WVU Payroll will then process the employee’s payment with the next applicable regular pay date.

Questions regarding this program may be directed to Benefits Administration at 293-5700×4.