The Excluded Employee Buy-Back Program (Program) authorizes payment of leave credits to employees who are excluded from Collective Bargaining. On an annual basis, the California Department of Human Resources (CalHR) will determine whether or not the Program will be offered. Eligible employees may receive payment at their regular salary rate in exchange for accrued vacation, annual leave, personal leave, and/or personal holiday credits.
CalHR Rule 599.744
Employees designated Managerial, Supervisory, Confidential, or employees who are otherwise excluded from collective bargaining are eligible to participate.
The maximum amount of buy-back for eligible employees is up to 80 hours. Departments cannot exceed these limits in any combination of various leave categories. Under the Program, employees are to be cashed out in 8-hour increments (any combination of leave types).
Program payments are subject to state and federal taxes, Social Security, and Medicare (if applicable). The State Controller's Office (SCO) is responsible for providing instructions for requesting pay. Payroll processing questions should be directed to SCO's Personnel/Payroll Services Division (PPSD), Payroll Liaison Unit.
The current Program is being enhanced to allow excluded employees with vacation or annual leave balances in excess of 640 hours, as of December 1, 2016, the option to transfer future leave accruals into a Savings Plus 457(b) and/or 401(k) Plan account. The Program will allow excluded employees the option to transfer the number of leave accruals elected into Savings Plus, take as a cash payment, or a combination of the two. For the purpose of this new option, eligible leave is either vacation or annual leave.
This enhancement provides the following benefits: (1) if electing the pre-tax option, allows employees the opportunity to reduce their future leave accruals without increasing their taxable income, (2) reduces the state's long term liability by paying out leave accruals at the employees' current salary instead of at a potentially higher rate at retirement, (3) increases employees' retirement savings without impacting their net pay, and (4) increases employees' retirement savings by investing the assets now, allowing time for potential market growth prior to retirement.
To participate in the Savings Plus option, all eligible employees wanting to participate must complete the irrevocable Transfer Future Leave Accruals to Savings Plus Request form. Employees must submit the completed form to their Human Resources office by December 31, 2016.
Employees may elect to transfer up to the number of hours they accrue during the January through May pay periods, in increments of 8 hours, not to exceed 80 hours. However, the actual number of hours converted will be subject to the number of hours approved by the state and authorized by each department. If the Program is not offered, the form becomes null and void and the employee's leave accruals will be available for use. If the Program is offered for an amount less than the employee elected, the lower amount of hours will transfer to Savings Plus based upon the following hierarchy: (1) 457(b) pre-tax, (2) 401(k) pre-tax, (3) 457(b) Roth, and (4) 401(k) Roth, in accordance with the employee's election until each plan and deferral type is satisfied. Excess leave accruals will be available for use.
If departments are authorized to participate in the Program, employees may elect to receive the cash value for any excess leave accruals not already allocated to transfer to Savings Plus (up to the total hours authorized by the department).
PML 2016-032 - 2017 Excluded Employee Leave Buy-Back Program
Enhancement for Fiscal Year 2016/17 - Frequently Asked Questions
Sample Email for HR to send to Excluded Employees | Text Only (RTF)
CalHR-271 - Transfer Future Leave Accruals to Savings Plus Form
Tracking Tool (for Personnel Specialists)