5-306: Cash for Accrued Vacation Leave

Purpose​

To establish the Sacramento County (County) "vacation cash-in" benefit.

Authority

• Board of Supervisors Resolution 2024-0768
• Memorandum of Understanding (MOU) Labor Agreement

Scope

This policy applies to all regular County employees. ​

Policy

It is the policy of the County to permit eligible employees to exchange accrued and unused vacation leave for the equivalent cash compensation.

Eligible employees must declare the number of hours they intend to “cash in” for any given calendar year no later than December 31st of the year before the intended vacation “cash in” using the Vacation Payment Request form. Failure to complete and submit this form between December 1st and December 31st to the Department of Personnel Services will result in the request being denied. A new request must be submitted for each calendar year. 

The vacation hours to be “cashed in” must be hours accrued in the year after the request; therefore, the employee must have accrued sufficient hours during the year of “payment for cash in” in order to receive payment at the time of distribution. If at the time of “cash in” payment, the employee has not accrued sufficient hours as indicated on the Vacation Payment Request form, the employee’s request shall be denied. 

No more than the maximum hours of vacation referenced below can be cashed in during any 12-month period. For example, an employee cashes out in December 2024 cannot select June 2025. They would have to select December 2025 or wait until December 2025 to select June 2026. 

Payment will be made once a year, either in June or December. The employee must specify which payment date at the time of election in December of the prior year.​

The vacation payment request is irrevocable once accepted by the Department of Personnel Services. Requests for fractions or parts of an hour are not permitted. 

For the purposes of this policy, years of service are based on actual time worked, rather than on calendar years. 

Eligibility

Executive Management, who are defined as Department Head level or higher: 

• At least ten (10) years of full-time continuous or non-continuous service within a public jurisdiction at the time of payment 
• 240 hours of accrued vacation leave available at the time the request is made 

A maximum of 80 vacation hours and a minimum of 8 vacation hours may be "cashed in" per calendar year. 

Represented employees (subject to inclusion in applicable MOU) and all other unrepresented employees: 

• At least ten (10) years of full-time continuous service at the time of payment 
• 240 hours of accrued vacation leave available at the time the request is made 

A maximum of 40 vacation hours and a minimum of 8 vacation hours may be "cashed in" per calendar year. ​

Standards of Application

“Cash-in” compensation will be included as part of the employee’s regular paycheck and therefore, will be issued as part of the normal County payroll. 

Vacation leave is to be compensated at full cash value. The value of vacation leave is based on the rate of pay received by the employee at the time the payment is made. 

Cash compensation for vacation leave is fully taxable and the County shall withhold from payments such sums as are required to be withheld from employees by the Federal Internal Revenue Code; the Federal Insurance Compensation Act; the State Personal Income Tax Law and the State Unemployment Insurance code. 

Cash compensation for vacation leave is not counted toward service credits used in determining retirement benefits. However, the cash payment is considered a compensation element for compensation earnable in calculating retirement benefits and subject to retirement deductions for some retirement tiers. 

Cash compensation paid to employees for vacation “cash in” will be charged to employing departments.