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PDFWAC 415-108-456

Leave payments earned over time.

(1) Sick and annual leave usage.
(a) Leave accrues at a prescribed rate, usually a certain number of hours per month.
(b) You earn a leave day by providing service during the month the leave accrued.
(c) Sick leave and annual leave are accumulated over time and paid to you during a period of excused absence.
(d) When you use your accrued leave by taking a scheduled work day off with pay, the payment is deferred compensation for services previously provided.
(e) The payment is a salary or wage earned for services provided and is reportable.
(2) Annual leave cash outs. Annual leave cash outs, like payments for leave usage, are deferred compensation earned for services previously provided. Whether, and to what extent an annual leave cash out qualifies as reportable compensation depends upon the PERS plan to which you belong and the type of employer.
(a) Plans 2 and 3: Annual leave cash outs are not reportable compensation. Although the payments are for services provided, they are excluded from the definition of compensation earnable by statute. See RCW 41.40.010 (8)(b).
(b) Plan 1, state government employees: A cash out of up to thirty days of annual leave for state government employees is reportable compensation. See RCW 43.01.040. A cash out in excess of thirty days of annual leave:
(i) Qualifies as reportable compensation if the leave is authorized by a letter of necessity under RCW 43.01.040. Annual leave qualifies as authorized under a letter of necessity only if the leave was earned after the letter of necessity was issued;
(ii) Does not qualify as reportable compensation if the leave is earned between the date that you accrued thirty days of annual leave and your anniversary date under RCW 43.01.044.
(c) Plan 1 employees not covered by (2)(b): All annual leave cash outs received by PERS Plan 1 members who are not state employees qualify as reportable compensation.
(3) Sick leave cash outs. Sick leave cash outs are deferred compensation for services previously provided.
(a) Sick leave cash outs are excluded from the definition of compensation earnable for PERS Plan 2 or 3 members by statute. See RCW 41.40.010 (8)(b).
(b) Sick leave cash outs are reportable compensation for PERS Plan 1 members other than state, school district, and educational service district employees.
(c) Sick leave cash outs are excluded from reportable compensation for:
(i) State employees by RCW 41.04.340;
(ii) School district employees by RCW 28A.400.210; and
(iii) Educational service district employees by RCW 28A.310.490.
See RCW 41.40.010 (8)(a).
[Statutory Authority: RCW 41.50.050(5) and 41.40.010(8). WSR 02-03-120, § 415-108-456, filed 1/23/02, effective 3/1/02. Statutory Authority: RCW 41.50.050. WSR 98-09-059, § 415-108-456, filed 4/17/98, effective 5/18/98.]
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