A county will have to adopt written personnel policies addressing paid time off. Paid time off includes vacation, sick, and compensatory (comp) time. A policy should  address the rate that time off is accrued, the maximum amount of time that each  individual employee is able to accrue, and what type of leave is guaranteed to be paid upon termination or retirement of an employee.   

While there is no state or federal law requiring that vacation or sick leave be provided for county employees, management should note that federal labor laws require accrued comp time to be paid out in full to employees upon retirement or termination. Comp time accrues at one and one-half hours for each hour of overtime worked, and the maximum amount of comp time that can be accrued by an  individual employee in public safety, emergency response, or seasonal activities is 480 hours, which represents 320 hours of overtime actually worked.   

Employees in other types of job classifications can accrue up to a maximum of 240  hours of comp time, which represents 160 hours of actual overtime worked. Comp  time accruals for individual employees should never exceed these maximum  amounts. See Employee Leave under the Personnel topic for more information on the legal aspects of paid time off.

Once a county adopts a written personnel policy addressing paid time off, county  management will have to prepare an annual report that presents accumulated dollar values by function for all leave, sick, and comp time if guarantee payment provisions for this paid time off exist in the county’s personnel policy. The annual report must  present the beginning of fiscal year accumulated leave, sick, and comp time liability balances, amount of time earned by employees during the current fiscal year, amount of time used by employees during the current fiscal year, and the end of year accrued time liability. Management also will have to provide an accurate estimate of  the amount of time off that will be expensed in the next fiscal year. Sample Leave Accrual Spreadsheet.

Note:   
One of the most common and avoidable mistakes that some counties make when preparing the annual accrued time off report is to use a beginning of current year (July 1) balance that is different than the prior fiscal year’s ending balance (June  30). These amounts should always be the same. If a prior period correction is  needed, make the adjustment in the current fiscal year and make your auditors  aware of this adjustment.