4.7 SR 08-05-2024city of
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1-.Uve
To
City Council
Meeting Date
August 5, 2024
Item Description
Severance Pay Policy
Request for Action
Item Number
4.7
Prepared By
Lauren Wipper, Human Resources Manager
Reviewed by
Cal Portner
Tina Allard
Action Requested
Approve, by motion, the updated Severance Pay Policy retroactive to August 7, 2023.
Background/Discussion
On August 7, 2023, the City Council approved a number of policies from the city's Personnel Policy Manual.
One of these was an update to our Severance Pay policy. We reduced the payout on the shorter years of
service and increased the payout on the longer years of service with anything paying out over 50% of the
maximum requiring PERA Retirement.
In reviewing this policy as resignations have occurred, it has become apparent that the PERA retirement
language was added in error. This update removes the retirement requirement and requires only eligibility to
retire under PERA.
Financial Impact
Financial impact for this change will be accounted for in the budget process.
Mission/Policy/Goal
The Elk River Mission.
Attachments
I . Severance Pay Policy Update
The Elk River Vision
A welcoming 6ommuni�, with revolutionary and spirited mourcyidnm, exceptional service, and community P� d W E R E D 0d
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Severance Pay
An employee resigning employment may be eligible for a cash payment for a portion of unused sick
leave. For the purpose of this section, sick leave is the combination of an employee's sick leave bank and
Earned Sick and Safe Time (ESST) bank. Accrual for the year of payment shall be based on 3.6924 or
2.4616 hours per pay period, whichever is applicable to employee. To receive a severance payout, the
following conditions shall be met:
• The employee must earn sick leave per the Sick Leave policy below; and
• The employee must leave in good standing, not terminated by the city; and
• S/he must provide proper notice of resignation as stated above with city administrator discretion;
and
• S/he must execute a release of claims.
Payment shall be based on the consecutive years of leave -eligible service completed by the employee
with the City of River and his/her accrued sick leave balance. Payment shall be at the rate of pay when
the resignation is submitted.
For Employees hired before August 8, 2023, and completing two (2) years of consecutive service, the
severance payment is calculated at fifty percent (50%) of the accumulated sick leave balance up to a
maximum paid of four hundred eighty (480) hours.
Employees hired August 8, 2023, or later, and completing five (5) years of consecutive service, will
receive a payout as outlined below:
5-9 consecutive years of service 40% of up to 960 hours
10 or more consecutive years of service 50% of up to 960 hours
An employee eligible for Severance Pay as noted above and eligible for PERA benefits will receive payout
as outlined below.
15-19 consecutive years of service 60% of up to 960 hours
20-24 consecutive years of service 65% of up to 960 hours
25-29 consecutive years of service 70% of up to 960 hours
30-32 consecutive years of service 75% of up to 960 hours
33 or more consecutive years of service 80% of up to 960 hours
Accumulated leave in excess of nine hundred sixty (960) hours is not eligible for a severance payment.
Sick leave shall continue to accumulate in excess of nine hundred sixty (960) hours to be used in
accordance with the Family Medical Leave Act.
Due to unforeseen circumstances and in his/her sole discretion, the city administrator may grant
exceptions to provide partial payout prior to five (5) years of service.
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