Opinion 89-1


This opinion represents the views of the Office of the State Comptroller at the time it was rendered. The opinion may no longer represent those views if, among other things, there have been subsequent court cases or statutory amendments that bear on the issues discussed in the opinion.


PUBLIC OFFICERS AND EMPLOYEES -- Compensation (authority to convert employee's accumulated leave time into cash upon death in service) -- Leave time generally (authority to convert into cash upon death in service) -- Sick Leave (authority to convert into cash upon death in service) -- Vacations (authority to convert into cash upon death in service)
MUNICIPAL FUNDS -- Appropriations and Expenditures (authority to convert employee's accumulated leave time into cash upon death in service)

GENERAL MUNICIPAL LAW, §92(1): The estate of a town employee who dies while in service generally is not entitled to payment of the cash value of the employee's accumulated vacation, sick and personal leave, unless the payment is authorized by an appropriate local enactment or collective bargaining agreement provision. Prior opinions are superseded to the extent inconsistent.

You ask whether a town may pay to the surviving spouse of a deceased town highway department employee, who died while in service, the cash value of the employee's accumulated sick leave, vacation and personal leave time. Enclosed with your inquiry is a copy of the current contract between the town and its highway department employees which, among other things, provides for the employees to receive a certain number of sick, vacation and personal days. However, the agreement makes no reference to the disposition of accumulated leave time upon separation from service by reason of death.

As a general rule, a town may grant to its officers and employees only those fringe benefits which are authorized by statute, either expressly or by necessary implication, or which are provided for in a collective bargaining agreement (see 1987 Opns St Comp No. 87-54, p 81). Among the statutes which authorize the provision of fringe benefits to town officers and employees is General Municipal Law ("GML"), §92.

GML, §92(1) provides that:

The governing board of each county, city, town, village, school district, and of each fire district or other district corporation and of each civil or political division of the state by local law, ordinance or resolution, or in the city of New York the mayor by order may grant vacations, sick leaves and leaves of absence to its officers or employees with or without pay and adopt rules and regulations in relation thereto. Notwithstanding any other provisionof law, any such governing board or mayor may also in like manner provide for cash payment of the monetary value of accumulated and unused vacation time or time allowances granted in lieu of overtime compensation standing to the credit of its officers and employees at the time of their separation from the service, or in the case of death in service, to be paid to their beneficiaries. [emphasis supplied]

Thus, section 92(1) authorizes a town board, by resolution, to provide town officers and employees with vacations and sick leave, as well as "leaves of absence", a term which we believe is broad enough to include personal leave (see 1976 Opns St Comp No. 76-447, unreported; 1971 Opns St Comp No. 71-35, unreported). Section 92(1) also authorizes a town board to provide, by resolution, for the payment of the monetary value of an officer's or employee's accumulated and unused vacation time upon separation from service by reason of death, but does not authorize payment of the cash value of accumulated sick and personal leave under similar circumstances.

With respect to sick leave and personal leave, although section 92(1) does not authorize a town board to provide for the payment of the cash value of accumulated sick and personal leave upon separation from service by reason of death, it is our opinion that a town board may adopt a local law providing for such payments (1979 Opns St Comp No. 79-214, p 39) or provide for such payments in a collective bargaining agreement (1981 Opns St Comp No. 81-72, p 73; Opn No. 79-214, supra). Such a local law or collective bargaining agreement provision, however, must operate prospectively (Opn No. 81-72, supra; Opn No. 79-214, supra; Dow v Board of Trustees, Farmingdale Public Library, 75 AD2d 632, 427 NYS2d 298 [2nd Dept., 1980]).

In Dow, supra, which involved an employee's claim for payment for accumulated overtime, vacation and sick leave upon termination of employment, the court stated:

Prerequisite to a claim of entitlement to compensation for accumulated credits is a showing that the employing body had authorized such payment prior to the accumulation. (75 AD2d at 632, 427 NYS2d at 299)

The Dow court relied on Murray v Levitt, 47 AD2d 267, 366 NYS2d 674 (3rd Dept., 1975), which involved the payment of overtime compensation under General Municipal Law, §90 and which held that, in view of the constitutional prohibition against gifts and loans contained in article VIII, §1 of the State Constitution, the governing board must adopt an overtime plan prior to the performance of any overtime work for which the employee is to be compensated. Therefore, in the absence of a pre-existing local law or collective bargaining agreement provision, the estate of deceased town employee who dies while in service is not entitled to payment of the cash value of accumulated personal or sick leave (see 1982 Opns St Comp No. 82-311, p 397; Opn No. 81-72, supra; Opn No. 79-214, supra).

In the present instance, while the contract between the town and its highway department employees does not refer to the disposition of accumulated sick leave upon separation from service by reason of death, it does provide that:

Retiring employee must notify Highway Superintendent six (6) months prior to retirement date. Sick days must be used before retirement date, not to exceed 165 days. Employee will not be paid for accumulated sick days beyond retirement date. (emphasis supplied)

Although we leave the ultimate interpretation of the this language to the parties to the agreement (see Opn No. 82-311, supra), the apparent intent of this language is to preclude cash payments for accumulated sick days upon retirement. If this was the intent, we believe that the town may not pay to the estate of the deceased employee the cash value of accumulated sick leave, unless there is another pre-existing bargaining agreement provision or local law authorizing the payment.

With respect to accumulated vacation leave, we have previously expressed the opinion that a municipality must convert accumulated vacation leave into cash upon the death of an employee, even in the absence of a local enactment adopted pursuant to section 92(1) or a collective bargaining agreement provision authorizing the payment (see Opn No. 82-311, supra; Opn No. 81-72, supra; Opn No. 79-214, supra; 32 Opns St Comp, 1976, p 13). In reaching this conclusion, we relied on Clift v City of Syracuse, 45 AD2d 596, 360 NYS2d 356 (4th Dept., 1974). In Clift, supra, the court considered whether a municipal employee was entitled to the cash value of accumulated vacation leave, where the employee was promised the opportunity to utilize the accumulated vacation leave, but was involuntarily terminated without being given that opportunity. In these circumstances, the court held that the employee was entitled to the cash value of the vacation leave, even in the absence of a local enactment or collective bargaining agreement authorizing the payment, on the theory that vacation leave is a vested property right subject to constitutional due process protection. We extended the rationale in Clift to situations involving the death of an employee on the theory that death constitutes involuntary separation from service. However, several court decisions subsequent to Clift cause us re-examine this conclusion.

In Smith v City of New York, 120 Misc 2d 868, 467 NYS2d 504 (1983), the court held that a municipal employee, who was terminated without fault on her part, was subject to executive orders issued pursuant to GML, §92(1) limiting cash payments for unused vacation days and overtime to 54 days. In reaching this conclusion, the court stated that, absent a statutory or contractual basis for recovery, an employee is not entitled to cash payment on separation from service for other than his or her scheduled salary entitlement. The court also rejected the employee's claim, based on Clift, supra, that where separation occurs without fault, a refusal to pay all unused time would constitute a taking of property without due process of law. The court stated that:

The result in Clift appears not to be in accord with the earlier cited weight of authority in this subject are and, in any event, is distinguishable, in that plaintiff therein was not permitted to use his vacation time as it was accrued and was promised by his superiors that he would be able to take the time 'when it became convenient.' There is no claim that this plaintiff was lured into such a disadvantageous position here. (120 Misc 2d at 869, 467 NYS2d at 505)

In accord with Smith, supra, is Rubenstein v Simpson, 109 AD2d 885, 487 NYS2d 77 (2nd Dept., 1985), in which the court held that an employee of the New York City Transit Authority, who was dismissed on the basis of misconduct, was not entitled to the cash value of his accrued vacation time. The court stated that, in the absence of any statutory or contractual authority, a public employee whose appointment has terminated is not entitled to payment of the monetary value of unused vacation time, and, that the dismissed employee in that case failed to establish the existence of a statute, regulation or contractual provision authorizing that payment. The court also distinguished the holding in Clift, supra, noting that the employee in Clift was not permitted to take his vacation time, due to the demands of his particular job, but had been promised that he would be permitted to accumulate his vacation time over a period of years and would be allowed to use the time at some future date, if and when convenient to do so. The Rubenstein court said that:

... Clift involved equitable considerations that are simply not present in the case at bar. There is no claim here that the petitioner ever refrained from using vacation time on the basis of representations or promises by his superiors, and it cannot be said that he 'was lured into such a disadvantageous position' as the employee in Clift [citation omitted]. In sum, we perceive no basis in the case for departure from the rule barring a public employer from paying its terminated employee the cash value of accrued unused vacation time in the absence of statutory or contractual provision to the contrary. (109 AD2d at 887-888, 487 NYS2d at 80)

Lastly, in Gendalia v Gioffre, 606 F Supp 363 (S.D.N.Y., 1985), the court dismissed a Federal civil rights action, brought pursuant to 42 USC §1983, on the ground that there is no constitutionally protected right to be paid for unused vacation leave in the absence of a local law adopted pursuant GML, §92(1). The court observed that in order for an individual to have a constitutionally protected property interest, he or she must have a "legitimate claim of entitlement" derived from "existing rules or understandings that stem from an independent source such as state law-rules or understandings that secure certain benefits and that support claims of entitlement to those benefits". The court then concluded that GML, §92(1) is "purely permissive in nature" and rejected the argument in Clift, that a municipal employee may acquire a constitutionally protected entitlement to the cash value of vacation leave in the absence of a local law authorizing the payment. The court stated:

Although Clift, supra, held that payment was warranted, despite the absence of statutory authorization, it followed cases which 'have advanced a variety of theories on which to circumvent the absence of express statutory authorization' [citations omitted]. In light of the statute's [GML, §92] permissive language, the absence of any proof or allegation of the enactment of any Town Ordinance to implement a system of payments for unused vacation and sick leave, and the holding in the state courts that payments are beyond the authority of townships in the absence of such ordinances, I refuse to find a constitutionally protected property right to the back pay. (606 F Supp at 367)

The decisions in Smith, Rubenstein and Gendalia, supra, reaffirm the general rule, presumably not followed in Clift because of equitable considerations, that, absent a statutory or contractual obligation to the contrary, a municipal employee is not entitled to the cash value of accumulated vacation leave upon separation from service. The decision in Gendalia also squarely rejects the central legal premise in Clift, that municipal employees acquire a constitutionally protected property interest or vested right to the cash value of accumulated vacation leave in the absence of an obligation on the part of the municipality to pay the same arising from a state or local enactment, or a collective bargaining agreement. Moreover, the decisions in Smith and Rubenstein, both involving involuntary separation from service, distinguish Clift on the facts, noting that Clift involved extraordinary equitable considerations not normally present upon involuntary separation from service.

Based on these considerations, we now believe that Clift should be construed narrowly and not extended to significantly different factual situations. Therefore, we now conclude that, in the absence of extraordinary equitable considerations, a municipal employee who is involuntarily separated from service is not entitled to be paid the cash value of accumulated vacation leave unless the payment is authorized by a pre-existing local enactment or collective bargaining agreement provision. This is true regardless of whether separation is for cause (see Rubenstein, supra), without cause (see Smith, supra), or by reason of death (see Lombardi v City of New York 78 Misc 2d 1057, 359 NYS2d 154 [1974], mod on other grnds 46 AD2d 750, 361 NYS2d 1 [1st dept, 1974], affd 38 NY2d 727, 381 NYS2d 38, 343 NE2d 756 [1975]; Biondi v City of New York, NYLJ, 4/12/74, p 15, col. 3-4; Simpson v City of New York 165 AD 539, 151 NYS2d 218 [1956]; but see Konig v McCoy, 63 Misc 2d 1038, 314 NYS2d 223 [1970]).

In the present instance, the contract between the town and its highway department employees appears to be silent with respect to the payment of the cash value of accumulated vacation leave upon separation of service by reason of death. Therefore, assuming there is no pre-existing collective bargaining agreement provision or local enactment authorizing the payment, the town may not pay to the estate of the deceased employee the cash value of the accumulated leave.

Accordingly, in our opinion, the estate of a town employee who dies while in service generally is not entitled to payment of the cash value of the employee's accumulated vacation, sick and personal leave, unless the payment is authorized by an appropriate local enactment or collective bargaining agreement provision. The following opinions of this Office are hereby superseded to the extent that they are inconsistent with this conclusion: Opn No. 82-311, supra; Opn No. 81-72, supra; Opn No. 79-214, supra; 32 Opns St Comp, 1976, supra).

January 24, 1989
Douglas C. Henry, Supervisor
Town of Orwell