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According to a report released this week by  New Jersey State Acting Comptroller Kevin Walsh, Lakewood Township signed union contracts which includes provisions which violate the State's Sick Leave Payment laws and wastes taxpayer funds.

The state passed several laws in 2007 and 2010 which limit how employees who did not utilize paid sick leave during their careers can get paid, how much can be paid, and to whom.

As part of a statewide survey, the Office of the State Comptroller (OSC) reviewed Lakewood Township's ordinances, policies, and contracts to see if the municipality is following the provisions of the state laws.

Both Lakewood’s Ordinance and Policy Manual cap accrued sick leave payments at $15,000. The Ordinance allows the payment at “separation” and its Policy Manual allows it at resignation or retirement. Its union contracts all consistently cap accrued sick leave at $15,000. All allow payment upon separation of service, not just retirement. Two of its contracts allow terminal leave, stating, “[a]n Employee may use the above earned and accumulated sick days, vacation days and holidays immediately preceding retirement or termination for any reason, but during this time of running out these earned and unused sick days, an Employee shall not accrue or accumulate sick [days/hours], vacation [days/hours] and/or holidays.”

While three of Lakewood’s contracts have no provisions concerning vacation accrual, Lakewood’s Policy Manual and the other four union contracts are consistent in accruing vacation leave to the following year only. One of its contracts allows employees to receive payment for ten unused vacation days. Another contract allows employees to receive payment for up to 40 hours of unused holiday and vacation time.

Based on Lakewood’s response to OSC’s survey, its ordinances, Policy Manual, and union contracts, OSC found that:

1. The terms of Lakewood’s personnel manual do not comply with the 2007 law (N.J.S.A. 11A:6-19.1) with regard to sick leave payments. Its personnel manual allows for payment of accrued sick leave at a time other than retirement for covered employees.

2. The terms of Lakewood’s union contracts do not comply with the 2010 law (N.J.S.A. 11A:6-19.2) regarding sick leave payments. Its union contracts all allow sick leave payments at a time other than retirement for employees hired after May 21, 2010. Two of its contracts also allow payment of terminal leave for employees hired after May 21, 2010.

"The laws have been ignored, sidestepped, and undermined,” the report stated.

Walsh also noted that the illegal payments (for other than the times permitted) represent a missed opportunity for mayors and town councils to lower property taxes in their communities.

"It is disappointing to see the municipality disregarding state law and wasting taxpayer funds" he said.

Municipalities need to request a legal review of contracts and amend them to follow state law, the OSC suggests.

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