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In determining ?final average salary,? including additional payments for working on vacation days would credit the hours in a paid vacation day twice

In determining ?final average salary,? including additional payments for working on vacation days would credit the hours in a paid vacation day twice
Matter of Port Authority Police Benevolent Association, Inc. v Anglin, 12 NY3d 885

For a period of time after the events of September 11, 2001, members of the Port Authority Police Department of New York and New Jersey, were required to work 12-hour shifts and all vacation, regular days off, personal days, and compensatory time off were cancelled. Pursuant to the collective bargaining agreement, such personnel were paid time-and-a-half for all overtime hours and for all paid vacation days worked. When a unit member retired in 2003, the New York State and Local Police and Fire Retirement System excluded a part of the payments made to the individual for working scheduled vacation days in determining the member?s final average salary.*

The PBA, on behalf of its members, challenged the Retirement System's exclusion of the time-and-a-half payments arising from the first eight hours of work performed on a day that would have otherwise been a paid vacation day.

The Court of Appeals noted that General Municipal Law §90 states that overtime compensation may be paid to public employees "for all time such [employees] are required to work in excess of their regularly established hours of employment" and "[t]he amounts received as overtime compensation . . . shall be regarded as salary . . . for any of the purposes of any pension or retirement system."

However, said the court, the Retirement and Social Security Law specifically excludes from the computation of retirement benefits "lump sum payments for deferred compensation, sick leave, accumulated vacation or other credit for time not worked" (RSSL §431 [1]), "or any form of termination pay" (RSSL §302 [9] [d]).

The Court of Appeals ruled that the Retirement System?s exclusion of the first eight hours and inclusion of the last four hours of time-and-a-half pay are consistent with the plain language of General Municipal Law §90 as the first eight hours of work on a paid vacation day do not constitute "work in excess of . . . regularly established hours of employment."

Therefore, said the court, the System correctly distinguished the disputed payments from the payments which were included in the unit member's final average salary (i.e., payments for working regular days off, four extra hours on scheduled work days, and four extra hours on vacation days worked) as the latter payments were for work outside of the employee's regularly scheduled hours of employment while the former payments were for work within those hours.

The Court of Appeals explained that the inclusion of additional payments for working vacation days, whether compulsory or not, would amount to crediting the hours in a paid vacation day twice: once, because the eight hours of straight time as a part of the regular salary is already included in final average salary for pension purposes, and again, because any additional payments for working those same hours would also be included. Thus, the court concluded, the Retirement System?s ?exclusion of the disputed payments avoids this anomalous result and is consistent with the RSSL and General Municipal Law.?

* Port Authority Police Officers are members of the New York State Employees? Retirement System.

Full post as published by New York Public Personnel Law on March 15, 2010 (boomark / email).