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Department of Employee Trust Funds
December 22, 2010

ASLCC/SHICC and Section 40.19

Many active state employees have asked the Department of Employee Trust Funds (ETF) about the Accumulated Sick Leave Conversion Credit Program (ASLCC) and the Supplemental Health Insurance Conversion Credit Program (SHICC). Since the employer submits an employee's sick leave information to ETF at (or soon after) the employee's termination, employees have inquired about the effect of any change to sick leave benefits prior to their actual retirement.

In particular, active employees have asked about section 40.19 of Wisconsin Statutes, which recognizes employee rights to benefits that have already accrued. They have asked: If statutes, the compensation plan or labor agreements are changed prior to the day a state employee chooses to retire, is the employee's sick leave balance protected under s. 40.19?

Section 40.19 says that rights exercised and benefits accrued under Chapter 40 for service rendered are due as a contractual right and cannot be cancelled by any subsequent act of the legislature. However, s. 40.19 does not protect the further accrual of benefits or the future exercise of rights for service rendered.

Although ETF administers the ASLCC and SHICC programs, we do not play a role in determining the amount of sick leave that employees receive, or whether and how much of it may be accrued. Those matters are defined in state law, the compensation plan for non-represented state employees and the labor agreements for represented state employees. While it is possible that s. 40.19 may protect the right of current employees to convert their sick leave upon retirement, this issue has not, to our knowledge, been tested in the courts. If attempts are made to change these programs, it will be very important to examine closely what those changes are and how they are made in order to assess whether and to what extent the changes affect current employees.

Finally, and this cannot be stressed enough, ETF has not seen any proposals regarding changes to the ASLCC or SHICC programs.


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