Towns Violate NJ Law – Unused Sick & Vacation Time Payouts


Imagine getting a 6 figure bonus check for all those unused sick and vacation days when you retire. Pretty sweet deal, huh?

Too bad that’s only a possibility if you’re a public employee in New Jersey.

Results of a recent NJ State survey reveal that many public employees still receive large payouts for un-used sick and vacation days. Often, the payouts are well over $100,000.

There could be hundreds of New Jersey towns breaking the law. We recommend all local governments evaluate whether they are violating these laws.

NJ Comptroller Kevin Walsh

“Year after year, towns spend taxpayer money to fund costly, wasteful year-end bonuses for public employees that are hidden from taxpayers. The laws on sick leave payments are being ignored by a lot of towns, and this is putting a financial strain on taxpayers. Mayors and council members who want to lower property taxes are missing an opportunity to do so.”   – Acting State Comptroller Kevin D. Walsh

Virtually all of the 60 NJ towns audited by the state Comptroller’s office don’t cap sick and vacation payouts to employees. That’s a violation of NJ law.

Brigantine’s Unsustainable Comp Plans.

NOTE: Laws do not apply to most employees hired before May 21, 2010. Public union contracts may need scrutiny to determine if terms are NJ State law compliant.

Press of Atlantic City coverage: Officials who let the illegal payments continue should be held accountable, Comptroller Walsh said. Misappropriating public funds can be a criminal offense, he said, especially if senior municipal employees are found to have enriched themselves through such violations. “If I were a resident I would want to know how did it happen? Who let it happen?” Walsh said.

NJ has 564 municipalities. New Jersey found that 57 of those 60 municipalities audited, failed to fully comply with current laws. 

NJ public employees get large payments for unused sick and vacation days. Some get longevity pay as well. Critics see these ‘boat checks’ as bonuses. 

New Jersey Law: there’s a hard cap on amount paid out for unused sick time to $15,000 and limits payment to retirement, not annually or upon leaving a job. Employees may not carry over more than one year’s worth of vacation time.

Few Towns Follow Law on Sick Leave Payouts

Terminal Leave:  A sick leave payment in disguise. Towns give employees months off before retirement. South Jersey shore towns like Brigantine under former Mayor Phil Guenther were reported to have provided ‘terminal leave’ payments to certain retiring employees.

In other fiscal malfeasance a few years back, Brigantine employees were caught signing off on each other’s overtime paperwork.

Watch Brigantine Overtime Video >

Former Brigantine Mayor Phil Guenther supported a revolving door of Police Chiefs in his town.

Many past Brigantine Police Chiefs only served 2 years before retiring. Critics call this ‘pension padding’.


Jersey shore towns are more prone to less-than-prudent financial management. This could be due in part to the small number of full-time residents with voting rights. Elected officials along the shore often face little or no opposition at election time.

During the last election cycle, the three Margate incumbents, Becker, Amodeo and Blumberg faced only one challenger. In Ventnor, there were no challengers to the three incumbents.

Majority of Jersey shore taxpayers are second homeowners with no voting rights.

Municipalities provided documentation that showed actual unlawful payments made at resignation, termination, or departure. These short-term employees who are far from retirement, and thus should have received nothing, receive payments of thousands of dollars when they resign or are discontinued after a few years of working with a municipality.

See: Review of Sick & Vacation Leave Policies in New Jersey Municipalities

NJ Assemblywoman Nancy Munoz: “Sick leave is an insurance policy in the event you are too ill to work. It’s not meant to be a bonus, but public employees have been paid hundreds of thousands of dollars when they cash in their accrued time. These payouts may count toward compensation when public employee pension benefits are calculated.”

Non-voting, Jersey shore second-homeowners provide 75% of tax revenue needed for these unlawful payouts.

Read more at NJ Spotlight News.

Submit a tip if you suspect fraud, waste or abuse in New Jersey government. Call, email, or fill out the form on website.

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