Request By:
Mr. Otto Ingram
Deputy Secretary/Commissioner
Department of Rural and Municipal Aid
Transportation Cabinet
Frankfort, Kentucky 40601
Opinion
Opinion By: David L. Armstrong, Attorney General; By: Martin Glazer, Assistant Attorney General
You pose several interesting questions relative to personnel and retirement law evolving out of the following facts:
On July 31, 1980, at close of business or August 1, 1980, at beginning of business, you retired as Deputy Commissioner of Rural Highways, having accumulated 573.5 hours of sick leave or approximately 76.5 days. You state, "According to KRS 61.546, Section 1, the statutes indicated that I could not recover this sick leave accumulation as an additional service credit add-on for retirement benefits. "
Your corrected P-1 on August 21, 1980, showed that your sick leave was expunged. You remained in retirement until December 14, 1983, when you returned to state government in your present position.
On January 22, 1984, you were hospitalized and the payroll section of the Transportation Cabinet informed your office that you had 573.5 hours of sick leave and you were placed on paid sick leave for the months of February, March, and April, 1984.
On September 15, 1984, you were informed that such payment was in error in that sick leave had been used in your retirement and that you were asked to reimburse your employer in the amount of payment made during your illness ($7,583.09).
You ask the following questions:
1. Did my retirement officially begin at close of business on July 31, 1980, or at beginning of business on August 1, 1980? (I contend that I retired at close of business on July 31 and that sick leave should not have been added to my tenure.)
2. Since the Retirement Board and the Payroll Section added my accumulated sick leave to my retirement and thus enhanced my retirement benefits by a very meager amount, do I have the right to pay back to the Retirement Board the difference and thereby recover my total accumulated sick leave?
3. Is it mandatory that the sick leave be credited toward retirement?
To answer your specific questions:
1. Your retirement began BOB August 1, 1980, not COB July 31, 1980, because KRS 61.590(5) provides:
The effective date of normal retirement shall be the first month following the month in which employment was terminated from regular full-time position. The effective date of disability retirement shall be the first month following the month in which the member's last day of paid employment occurred. The effective date of early retirement shall be the first month following the month the notification of retirement form is filed with the retirement office, provided employment has been terminated. (Emphasis supplied. )
So, whether under normal or early retirement in your case, the first month following the last day of paid employment or notification of retirement would be August 1, 1980.
We shall reserve question two for discussion after we have answered question three.
3. The sick leave credit is mandatory. The language of KRS 61.546 states that the eligible employe " shall, on retirement, receive credit for unused sick leave. . . ." Under construction of statutes in KRS 446.010(29), the term "shall" is mandatory.
2. The real question to be answered here is whether an employee's sick leave, having been credited or added on to years of service to determine the amount of retirement, can be used again when the member reinstates his employment in state service. In other words, does such mandatory use of sick leave a la retirement, extinguish its further use in reemployment following such retirement?
The retirement law does not state that sick leave once used to figure benefits and eligibility is extinguished for all other purposes. It is merely silent on that subject. So, we must look at the personnel law and regulations as they deal with sick leave. KRS 18A.115(1)(d) for the unclassified service authorizes the Commissioner of Personnel to prepare rules covering sick leave. Personnel Rule 101 KAR 1:200 dealing with non-merit positions provides in Section 2(10):
Employees shall be credited for accumulated sick leave when separated by proper resignation, layoff, retirement, or when granted leave without pay in excess of thirty (30) working days. Former employees who are reinstated or re-employed shall have unused sick leave balances revived upon appointment and placed to their credit. (Emphasis supplied. )
At first blush, this rule could be interpreted to allow reinstatement of accumulated sick leave when reemployed even though the employee had previously left by reason of retirement and such prior sick leave had been used for computing retirement benefits. Of course, that rule was promulgated before the General Assembly decided to allow unused sick leave to be added on to service for retirement purposes and did not contemplate such use.
But, a close analysis would preclude that interpretation. What if the employee retired a second time with the same available sick leave he had when first retired? Would he not be eligible for adding such sick leave to his additional service in computing his new or second retirement? That would result in using the same sick leave twice in computing years of service. Besides that point, the employer is charged by the retirement system on an actuarial formulated rate the amount of sick leave credited to the retiree's years of service. The present system is that the employer is charged for its contribution to the retirement system a rate based on salary and sick leave. If the sick leave is reinstated for those previously retired and subsequently rehired, the employer would pay the rate twice for the same sick leave.
The only logical interpretation is that once sick leave has been used in computing retirement, it is extinguished; it has been used. It cannot be reinstated by an employee once having retired, who becomes reemployed. Such sick leave was not "unused. " Therefore, it appears that you cannot pay back your increased retirement benefits which resulted from computing sick leave and recover your sick leave credit. The sick leave must be added on to retirement benefits.
Thus, for the period of February, March, and April, 1984, you did not have sick leave accumulated (other than possibly one day for January) to cover that period. You should have been on sick leave without pay as authorized by 101 KAR 1:200, Section 2(7).
A copy of this opinion is being sent to the Department of Personnel for consideration for possible drafting of clarifying language in the sick leave rule.