Sick Leave: How it Works, Accumulates, and Impacts Your Retirement

In what situations can you use sick leave? Can you use annual leave instead if you’re sick? How is sick leave credited when calculating your FERS or CSRS pension?

In this series on types of leave for federal employees, we’ll be exploring the numerous categories of leave available to the government’s workforce, including how it can be used, how it works, and if it applies to a federal employee or survivor’s annuity. In part one, we’ll start by examining the ins and outs of sick leave for feds.

Accumulation of Sick Leave

For full time employees, a ½ day off for sick leave is accrued each pay period (4 hours every 2 weeks), totaling about 13 days off every year, or 104 hours. Unlike annual leave, where only 240 hours can be carried over into the next calendar year, sick leave hours accumulate throughout your federal career.

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Part-time employees earn 1 hour of sick leave for every 20 hours worked in a given biweekly pay period. For uncommon tours of duty, the accrual rate for a two-week period equals the average number of hours per a biweekly timeframe multiplied by 4 and then divided by 80.

Retirement Calculation

When it comes to unused sick leave and your retirement calculation for either FERS or CSRS, it is best to keep in mind that the sick leave counts toward creditability and not eligibility. To retire from the government, you need a certain number or years, depending on your age, to be eligible for retirement (such as age 62 with 5 years). Sick leave will not factor into your length of service in terms of eligibility. They will, however, add service hours to your retirement calculation, which looks like this:

“years of service” multiplied by “high-3 salary” multiplied by “X percentage”.

The percentage is dependent on several factors, and the high-3 is based on your individual pay, but years of creditable of service includes both actual service hours and accrued sick leave. Each full month of accumulated sick hours (that OPM says is 174 hours) can be added to the years of service component in your retirement equation, whether that’s for FERS or CSRS. A year of sick leave (2087 hours) effectively adds around 1% to the pension income of either a federal retiree or a survivor receiving a FERS pension, and 2% for a CSRS pension.

If you retire under CSRS, or leave a survivor a CSRS annuity, 100% of unused sick leave can be credited toward the income calculation. FERS employees could not credit their unused sick leave until October 28^th, 2009. Any FERS calculations where the effective retirement date is before this time could not include sick leave balances. From 10/28/09 to 12/31/13, FERS employees and survivors could credit up to 50% of their remaining sick leave to their annuity calculation. For all government workers that effectively retired on January 1^st, 2014, or later, 100% is creditable.

For breaks in service, no matter the duration, any sick leave remaining that wasn’t utilized in a FERS computation can be fully recredited to your current sick leave balance.

When Can Sick Leave Be Used?

In accordance with federal law, sick leave can only be used to take time off for the following situations:

• • Treatments or procedures for medical, dental, and optical purposes.
  • Incapacitation due to an illness, either physical or mental, injury, or childbirth.
  • Communicable disease that jeopardizes the health and safety or others.
  • If an employee’s child or dependent is sick, up to 13 days per year can be taken to care for that individual.

Can you use annual leave instead of sick leave for one of the above circumstances? This can make sense because, as aforementioned, only a portion of annual leave carries over each year while sick leave has no such cut-off. And the answer is yes, however keep in mind that annual leave requires supervisor approval and thus the request could be denied at your manager’s discretion.

Also, because sick leave can only be taken for the listed purposes, OPM accentuates that alternative options are available for other circumstances. These include annual leave, advanced annual and sick leave, paid parental leave available through the Family and Medical Leave Act (FMLA), alternative work schedules and telework, donated emergency leave from the voluntary leave transfer program, leave without pay, flexible work schedules, compensatory time off, and voluntary leave bank programs, which are available at some agencies. We’ll touch on all these types of leave later in the series.

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Until Next Time,

The information has been obtained from sources considered reliable but we do not guarantee that the foregoing material is accurate or complete. Any opinions are those of Serving Those Who Serve writers  and not necessarily those of RJFS or Raymond James. Any information is not a complete summary or statement of all available data necessary for making an investment decision and does not constitute a recommendation. Investing involves risk and you may incur a profit or loss regardless of strategy suggested. Every investor’s situation is unique and you should consider your investment goals, risk tolerance, and time horizon before making any investment or financial decision. Prior to making an investment decision, please consult with your financial advisor about your individual situation. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional. **

Sick Leave for Federal Employees