It is the responsibility of terminating employees (Faculty, Faculty Associate, A/P, and Civil Service) to schedule an exit interview with the Office of Human Resources.
Accumulated sick time cannot be paid out unless the employee terminates employment. Pursuant to PA 83-0976, at the time of termination, employees on a continuing contract are eligible for payment of their unused accumulative sick leave days earned from January 1, 1984 through December 31,1997.
This liquidating compensation shall be equal to one-half of the number of all unused accumulative sick leave hours multiplied by the hourly rate of pay applicable to the employee at the time of termination of a continuing contract. An employee may elect, however, to forego payment for all or a portion of unused accumulative sick days so that such designated days are eligible for additional service credit in the State Universities Retirement System.
Unless the employment contract specifies otherwise, unused vacation is eligible for payment as well. These payments are usually based on the employee's regular hourly rate at the time of termination. Vacation time accumulated is normally paid out when an employee takes an extended leave of absence, or may be held until such time as the employee terminates.
Employees who have a balance of compensation time will have their time also paid out at the time of termination.
The hourly rate for full-time (100%) Faculty, Faculty Associates, A/P, and salaried Civil Service is computed by dividing the regular monthly pay rate by 162.5. If an academic employee works during the summer session and is terminated immediately after, the regular monthly rate will be based on the spring semester earnings.
The Termination Payout form is the authorization to process a termination pay out. All Benefit Usage Reports are also required from Faculty, Faculty Associates, A/P, and Civil Service exempt employees.
Once this paperwork is properly submitted to the Payroll Office, the pay out of unused sick and vacation time could appear as early as the employee's last regular pay check. Please note: Since many circumstances surround pay outs, the Payroll Office will not guarantee the timing of pay outs.
However, if the employee returns to employment in any capacity with the same agency or department within 30 days of the termination of his or her previous State employment, the employee must, as a condition of his or her new State employment, repay the lump sum amount within 30 days after his or her new State employment commences.
In case of death, amounts owed at the time of death are part of the employee's estate and must be paid to the estate. A death certificate and a will (or small claims affidavit) must be turned into the Payroll Office, 101 Hovey Hall, before the death pay out can be processed. Any miscellaneous deductions and final retirement contributions will be withheld and submitted. A letter detailing this information will be sent to the executor of the estate.
The pay out balance due will be paid to the estate of the employee and cannot be included in that employee's federal or state taxable income. A pay out at death is not subject to federal or state income tax withholding. Medicare and Social Security tax may be applicable. Any taxable amount and withholding of the above will be reported under the employee's social security number on the W-2. A Form 1099 will be issued to the estate to report the amount of pay out.
In most cases, the Payroll Office will charge a termination payout to the employee's regular position and account number (generally, this is the current employing department). It is the responsibility of the department to fund this. If an employee works for two or more departments the charge will be prorated based on FTE (Full Time Equivalency). In most cases, if an employee transfers from one department to another, the last department the employee worked in is responsible for the full payout.
Policy Owner: Vice President for Finance and Planning
Contact: Payroll Office (309-438-7677)
Revised on: 05/2003
