Automatic Cash-Out of Excess Leave set to Return March 31, 2022

The Professional Association of Foreign Service Officers is pleased to announce that we have negotiated and signed a memorandum of understanding (MOU) with Treasury Board that lifts the moratorium on vacation and compensatory leave cash-outs imposed as a result of ongoing issues with the Phoenix Pay System.

By design, this MOU smooths out the payment of excess leave in such a way as to reduce the payments made by the employer and also to reduce the tax burden for our members. For all vacation leave from 2021 through to 2026, automatic cash-outs will take place in two steps on March 31, the end of the fiscal year:

STEP 1 Of the excess leave accrued in your bank over the 300-hour limit, 20% will be cashed out automatically.

STEP 2 Up to 100% of any unused vacation leave will be cashed out based on what excess leave remains beyond the 300-hour limit.

Total cash-outs will never leave you with less than the 300-hour limit in your bank.

Below are a few examples.

EXAMPLE 1
Hours accrued in leave bank as of March 31, 2022:
200 (100 under limit)
20% cash-out from excess leave: 0 hours
Remaining portion of leave earned in 2021–22 as of March 31: 37.5 hours
Cash-out of unused vacation leave from previous year: 0 hours
Total cash-out: 0 hours
Leave balance remaining for 2022­–23: 200 hours

EXAMPLE 2
Hours accrued in leave bank as of March 31, 2022:
310 (10 over limit)
20% cash-out from excess leave: 2 hours
Remaining portion of leave earned in 2021–22 as of March 31: 150 hours
Cash-out of unused vacation leave from previous year: 8 hours (more would leave you with less than 300 banked hours)
Total cash-out: 10 hours
Leave balance remaining for 2022­–23: 300 hours

EXAMPLE 3
Hours accrued in leave bank as of March 31, 2022:
310 (10 over limit)
20% cash-out from excess leave: 2 hours
Remaining portion of leave earned in 2021–22 as of March 31: 0 hours (all vacation allotment for 2021–22 was used)
Cash-out of unused vacation leave from previous year: 0 hours
Total cash-out: 2 hours
Leave balance remaining for 2022­–23: 308 hours

EXAMPLE 4
Hours accrued in leave bank as of March 31, 2022:
400 (100 over limit)
20% cash-out from excess leave: 20 hours
Remaining portion of leave earned in 2021–22 as of March 31: 75 hours
Cash-out of unused vacation leave from previous year: 75 hours (100% cash-out)
Total cash-out: 95 hours
Leave balance remaining for 2022­–23: 305 hours

EXAMPLE 5
Hours accrued in leave bank as of March 31, 2022:
400 (100 over limit)
20% cash-out from excess leave: 20 hours
Remaining portion of leave earned in 2021–22 as of March 31: 150 hours
Cash-out of unused vacation leave from previous year: 80 hours (more would leave you with less than 300 banked hours)
Total cash-out: 100 hours
Leave balance remaining for 2022­–23: 300 hours

 

Though you can still request a cash-out of your entire excess vacation leave balance, we encourage our members to enjoy all the leave they are entitled to in the year it was earned. Annual leave is vital to maintaining good work-life balance and in managing our mental health.

In cases where there may be issues concerning the completeness or accuracy of eave data, the mandatory leave cash-out can be paused until the issue is resolved.

As always, when additional details become available, we will let you know. If you have any questions about the MOU, or leave cash-out in general, please contact info@pafso.com

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