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Annual Leave

Annual Leave

The annual leave program provides eligible employees a combined pool of "annual leave" credits instead of separate vacation and sick leave credits. Annual leave covers the same kinds of absences that otherwise would be covered by vacation or sick leave.


Advantages of Annual Leave

  • More discretionary leave each year (in lieu of sick leave)

  • Cash value upon retirement or separation from State service

  • Higher disability benefits if you suffer a serious non-work-related injury or illness


Frequently Asked Questions About Annual Leave


In some cases, bargaining unit contracts contain more details about annual leave for employees in that unit. If you want to read the CalHR Rules on annual leave, refer to Rules 599.752-599.753 and 599.766


Am I eligible for annual leave?

With few exceptions, most employees are eligible for annual leave.



  • Managers, supervisors, confidential, and other "excluded" employees

  • All rank-and-file employees

  • Part-time, permanent-intermittent, limited term, and temporary employees

  • Non-elected members of certain boards and commissions whose salaries are fixed by law (CalHR Rule 599.752.1)



  • Seasonal employees

  • Statutory exempt employees who don't accrue vacation or sick leave


How do I enroll?

Enrollment in the annual leave program is subject to the following conditions, unless you're in bargaining unit 6 or one of the SEIU-represented units (1, 3, 4, 11, 14, 15, 17, 20, and 21):


  • If you're a new employee hired for a position that's eligible for annual leave, you may enroll in the annual leave program when you're hired.

  • If you've always accrued separate vacation/sick leave, you may switch to annual leave anytime. If you decide later you want to switch back to vacation/sick leave, you can but only after you've been in annual leave at least 24 months.

  • If you've always been in the annual leave program but want to switch to separate vacation/sick leave, you're permitted to make that change. If you decide later you want to switch back to annual leave, you can but only after you've been in vacation/sick leave at least 24 months.


Enrollment is effective the first day of the pay period for the month when your employer received your form, i.e., if you submit the form in January, your enrollment will be effective in January.


Bargaining unit 6 employees: Your contract requires new employees to serve a six-month waiting period before you can enroll in annual leave.


SEIU bargaining unit employees: Your contract requires an open enrollment period every April for you to opt in or out of annual leave.


How much annual leave do I accrue?

To compare the different accrual rates for vacation vs. annual leave, refer to the Vacation vs. Annual Leave Comparison Chart. The chart reflects accrual rates for full-time employees. If you work less than full-time, your accrual rate is pro-rated according to your time base. If you're new to State service and enroll in the annual leave program, you begin accruing annual leave credit after one qualifying pay period.


What can I use annual leave for?

You can use annual leave for paid time off for any management-approved absence that otherwise would be covered by sick leave or vacation. Because you can use it for either purpose, annual leave allows you to accrue more "vacation time" if you seldom are out sick, or vice versa.

When you use annual leave for a sick leave purpose, your employer may require you to provide documentation including, but not limited to, a statement from your physician.


What are the higher disability benefits?

Most enrollees in Annual Leave automatically become eligible for Enhanced Non-Industrial Disability Insurance. NDI is a form of insurance that provides income in case you suffer a non-work-related disability and can't work for an extended period.
Exception: employees in bargaining units represented by SEIU are covered by State Disability Insurance in lieu of NDI benefits.
Normally, NDI pays $135/week for up to 26 weeks. Under Enhanced NDI, you receive 50 percent of your gross salary for up to 26 weeks. You also may supplement Enhanced NDI benefits using leave credits (e.g., annual leave and sick leave) or partial employment to reach 100 percent of your income level.
The examples below show the advantages of Enhanced NDI over the basic NDI benefit.
An illustration of Enhanced NDI Benefits
John, a therapist, is enrolled in annual leave.  Mary, a painter, is enrolled in vacation/sick leave.  Each of them earn $4,000/mo.
On March 1, John developed a serious illness and was unable to return to work for 16 weeks (until June 22).  The same day, Mary was in a serious car accident and was also unable to return to work for 16 weeks.
At the time he became ill, John had 320 hours of annual leave (8 weeks of time off).  Mary had 200 hours of sick leave and 120 hours of vacation (8 weeks of time off).
John applied for Enhanced NDI.  He chose the 50% benefit rate, allowing him to receive NDI payments equal to half his salary ($2,000/mo.) for the entire 16 weeks he was out.  John received the other half of his salary by spreading his 8 weeks of annual leave over the 16 week period he was out.  By supplementing his Enhanced NDI benefits with his annual leave, John received 100% of his monthly income for the 16 weeks he was out.  He also continued accruing leave time and his other benefits during this time.
Mary, who was not eligible for Enhanced NDI, used her sick leave and vacation during March and April.  During this time, she continued to receive her normal paycheck.  By May, with both her vacation and sick leave exhausted, Mary's pay consisted of the Basic NDI benefit of $135/week, or about $540/mo.  While she was on Basic NDI, Mary did not earn any additional leave credit, seniority credit, or any other benefits.
Bargaining Unit 6: If you're in Bargaining Unit 6 and voluntarily enroll in annual leave, you must serve a 90-day waiting period before you're eligible for Enhanced NDI, unless you enrolled in annual leave on a mandatory basis. ("Mandatory" refers to unit 6 employees who were required to enroll in annual leave by moving from a rank-and-file position to a position excluded from collective bargaining. That requirement, since dropped, was in effect from November 1995 to August 1999.)
If you're in Unit 6 and file a claim for NDI benefits between the effective date of your annual leave enrollment and the end of the 90-day waiting period, you receive the standard NDI benefit.

How much annual leave can I accumulate?

You're allowed to accumulate up to 640 hours of annual leave as of January 1 of each year. Exceptions are allowed only in extremely unusual situations. (Refer to your contract and CalHR Rule 599.742.1.)
Bargaining Unit 5 employees may accumulate up to 816 hours of annual leave.
When you separate from State service or retire, you may receive a taxable lump sum payment for any unused annual leave you have accumulated, based on your salary when you separate/retire. You also have the option to transfer a portion or all of this lump sum payment (tax deferred) to a Savings Plus 401(k) and/or 457 plan, subject to annual contribution limits for these plans.

How does my vacation/sick leave convert to annual leave?

If you switch from vacation/sick leave to annual leave, any unused vacation credit you have is converted to annual leave credit. (If you switch from annual leave to vacation/sick leave, your annual leave converts to vacation.)
However, if you have any unused sick leave when you convert to annual leave, it will be maintained separately; you may continue to use it for sick leave purposes. (You don't accrue separate sick leave once you convert to annual leave.) Both sick leave and annual leave can be used to supplement your Enhanced NDI benefits.
When you retire, unused sick leave is converted to retirement service credit. At the current formula, 2,000 hours of sick leave equals one year of CalPERS service credit.

Annual Leave Form

  Updated: 4/29/2014
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