Payroll 110 Badge #06 - Sick Leave Conversion, Vacation Cashout, VEBA-Payroll 110 Badge #6

Video Transcription

Video Summary

This WASBO Payroll 110 Badge 6 session covers rules and best practices for sick leave cash out, vacation/personal leave cash out, and Voluntary Employees’ Beneficiary Association (VBAA) plans for Washington school districts. The instructor reviews RCWs/WACs governing leave accrual, transfer between WA districts, maximum accumulation (generally 180 days; up to 260 for some year-round employees), and the importance of written board policy and collective bargaining language. Districts may front-load or allocate sick leave monthly; monthly allocation helps avoid overuse when employees terminate early. Strong internal controls and audit documentation are emphasized, including proof that leave balances are reduced when cash outs occur.<br /><br />Annual sick leave conversion (buyback) requires a board attendance incentive program. Employees must retain at least 60 days after conversion, and eligible prior-year sick leave is converted at 25% of the daily rate (1 day paid for each 4 days converted). At retirement/death, cash out is capped at 180 days and is not reportable to DRS.<br /><br />Initiative 1433 requires paid sick leave for all non-exempt employees (including substitutes) at 1 hour per 40 hours worked, with required employee notice.<br /><br />Vacation cash out is typically at full value per local agreements and also not reported to DRS.<br /><br />VBAA (IRS 501(c)(9)) allows voluntary, tax-free contributions (often from cash outs) used only for qualified medical expenses under an annual MOU. COVID-related leave and shared sick leave impacts are briefly addressed.

Keywords

WASBO Payroll 110 Badge 6

Washington school district payroll

sick leave cash out rules

vacation and personal leave cash out

RCW WAC leave accrual compliance

sick leave conversion attendance incentive program

Initiative 1433 paid sick leave accrual

leave transfer and maximum accumulation limits

VEBA (501(c)(9)) contributions and qualified medical expenses