3.8. SR 04-07-2008~/
Elk REQUEST FOR ACTION
M
River
To Item Number
City Council
Agenda Section Meeting Date 3.8.
Prepared by
Consent A ri17, 2008 Lori ohnson, Ci Administrator
Item Description Reviewed by
Severance Pa
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Action Requested
Consider adoption of updated severance pay section of the Elk River personnel policy.
Background/Discussion
This item is on the agenda to formalize previous Council direction; at the March 10, 2008, woxksession,
the CouncIl reviewed the City's severance pay policy and after discussion agreed to increase the severance
payout to 50% of the accumulated sick leave not to exceed 480 hours with eligibility beginning after two
years of employment. This change does not affect union contracts unless the contract specifies that it
folloevs the City's personnel policy and no specific severance pay language is included in the contract.
Financial Impact
There is no immediate fmancial impact as there is no cost until an employee resigns employment and
meets the terms of the severance pay policy.
Attachments
• Proposed severance pay policy
• Cuxxentsevexance pay policy
Action b4otion by _ Second by _ Vote
Follow Up
S:ACouned\LociA2008\Seveiance Pay 04 07 08.doc
Proposed (from Council discussion March 10, 2008)
SEVERANCE PAY
An employee resigning his/her employment with the City may be eligible for a cash
payment for unused sick leave if the following conditions are met:
The employee must resign in good standing (not terminated by the
City); and
2. The employee must provide proper written notice of his/her
resignation (see Resignation Policy above); and
The employee must execute a release of claims.
Payment shall be based on the consecutive years of service completed by the
employee and his/her accrued sick leave balance.
1. An employee terminating after completing two (2) years of
consecutive service will receive payment for fifty percent (50%) of
his/her accumulated sick leave balance up to a maximum payment
for four hundred eighty (480) hours. Payment shall be at the
current rate of pay when the resignation is submitted.
Any accumulated sick leave in excess of nine hundred sixty (960) hours is not eligible for
payment under this policy. Employees may continue to accumulate sick leave in excess
of nine hundred sixty (960) hours to be used in accordance with the Family Medical
Leave Act.
Elk River Personnel Policy (as revised June 2006)
SEVERANCE PAY
An employee resigning his/her employment with the City may be eligible for a cash
payment for unused sick leave if the following conditions are met:
1. The employee must resign in good standing (not terminated by the
City); and
2. The employee must provide proper written notice of his/her
resignation (see Resignation Policy above); and
3. The employee must execute a release of claims.
Payment shall be based on the consecutive years of service completed by the
employee and his/her accrued sick leave balance.
1. An employee terminating after completing five (5) years of
consecutive service will receive payment for fifteen percent (15%)
of his/her accumulated sick leave balance up to a maximum
payment for one hundred forty-four (144) hours. Payment shall be
at the current rate of pay.
2. An employee terminating after completing fifteen (15) years of
consecutive service will receive payment for twenty percent (20%)
of his/her accumulated sick leave balance up to a maximum
payment for one hundred ninety-two (192) hours. Payment shall
be at the current rate of pay.
3. An employee terminating after completing twenty (20) years of
consecutive service will receive payment for twenty-five percent
(25%) of his/her accumulated. sick leave balance up to a maximum
payment of two hundred forty (240) hours of pay. Payment shall
be at the current rate of pay.
For example, if an employee satisfies the above conditions, has completed ten years of
service, and has accumulated 1,000 hours of sick leave and makes $10.00 per hour, the
employee will receive severance pay as follows:
1,000 hours x 15% = 150 hours
Maximum hours eligible for severance pay = 144 hours
144 hours x $10.00/hour = $1,440 severance pay
Any accruulated sick leave in excess of nine hundred sixty (960) hours is not eligible for
payment under this policy. Employees may continue to accumulate sick leave in excess
of nine hundred sixty (960) hours to be used in accordance with the Family Medical
Leave Act.