The union has continued to receive many questions about “use or lose” annual leave. Here is an update on the issue.

What Are the Basic Rules for Use or Lose Leave?

Federal employees are permitted to carry over from one leave year to the next a maximum amount of annual leave. Generally, federal employees may carry over up to 240 hours of annual leave. At the SEC, in late 2018 the union negotiated the right to carry over up to 360 hours of annual leave.

“Use or lose” annual leave is the amount of accrued annual leave that is in excess of that 360-hour maximum annual leave limitation for carry over into the next leave year. Generally, employees must “use” this excess annual leave by the end of the leave year or they will “lose” (forfeit) that leave.

According to the Office of Personnel Management (OPM), employees are required to schedule their use or lose annual leave before the start of the third biweekly pay period prior to the end of the leave year. In 2021, the third biweekly pay period prior to the end of the leave year (pay period 24) occurs November 7-20, 2021. Thus, SEC employees are required to schedule all of their use or lose leave for 2021 by no later than November 6, 2021. The union recommends that employees schedule their use or lose leave well in advance of November 6, to ensure that they create a solid record regarding such scheduling, and due to the fact that there will be a lot of employees scheduling such leave this year. Let’s not overburden the Office of Human Resources (OHR) if we can avoid it!

SEC management may deny all or a part of an employee’s timely scheduled use of their use or lose annual leave due to an “exigency of the public business” (i.e., an urgent need for the employee to be at work). If the agency does this, they will “restore” the use or lose leave for the employee, because he or she earned that leave and shouldn’t be compelled to give it up against his or her will. The employee will be required to schedule and use that leave down the road, typically not later than the end of the leave year ending two years later (in this case, that would be the end of the 2023 leave year).

What Is the Current Problem with Use or Lose Leave During the Pandemic?

With the declaration of a worldwide pandemic by the World Health Organization in March 2020, the union convinced SEC management to shift to our mandatory telework posture that month (which was earlier than almost all other federal agencies). Since that time, the employees we represent have been successfully working from home, often juggling work and family needs by utilizing other union-negotiated pandemic scheduling flexibilities.

The COVID-19 pandemic obviously has led to many consequences, including sequestration of employees and their families, various travel restrictions, concerns by SEC employees about being exposed to others, and employees’ desire to ensure that they get their work done while dealing with other personal concerns created by the pandemic emergency. As a consequence, in many cases, employees had far more use or lose annual leave in 2020 than usual. The union attempted to deal with this by negotiating a combination of leave “buyback” and “carryover” with former SEC Chairman Jay Clayton. Ultimately, we were able to obtain from management a full carryover of all use or lose leave from 2020 to 2021, with the requirement that the carried over leave be used by the end of 2021. This was not our first preference. As we explained to management last year, we projected that the pandemic situation would not be “over” during the winter of 2020-2021, and in fact would likely get worse during that period, and thus that the use or leave situation would continue to compound during 2021.

Based upon information that the union received pursuant to an information request to the agency earlier this year, the union’s repeatedly expressed concerns from 2020 have been realized. Many SEC employees carried over a lot of annual leave from 2020 into 2021. In some cases, this amounted to as much as 208 hours of 2020 annual leave carry over beyond their standard 360-hour carry over allotment. Due to continuing pandemic issues in 2021, this amount of annual leave has continued to grow at the agency during 2021. Many SEC employees are on pace to have anywhere from 20 to 416 hours of use or lose leave by the end of 2021.

We assure you that the union has been proactively raising this issue weekly with SEC management during the entire pendency of the pandemic, including for the first several months of this year. The prospect of a large portion of our workforce taking up to 10.4 weeks of annual leave at the end of 2021 could, at least in some cases, create problems. By the same token, SEC employees should not be penalized for not taking their annual leave during a worldwide, once-in-a-century pandemic emergency.  SEC employees earned this leave and should not be forced to waste it, or forfeit it, due to circumstances entirely beyond their control.

The union has repeatedly made clear to SEC management that the employees that we represent want a rational solution to this entirely predictable problem—a solution that will meet the institutional interests of the SEC as well as the interests of the employees. So far, management has indicated that it continues to “consider the issue,” but union leadership has received no tangible proposals to address it. This has led to frustration on the part of many employees, as they continue to struggle to make their personal plans.

What Is the Union’s Position on Use or Lose Leave?

The union has repeatedly communicated to management that the SEC should provide a combination of a use or lose “buyback” and a use or lose “carryover” with rational sunset dates. This solution seems rather obvious to us.

Annual leave “buyback” is not a new concept. The Consumer Financial Protection Bureau, for example, has the following provision in their Collective Bargaining Agreement:

At the end of a leave year, all employees who have an annual leave balance in excess of their personal leave ceiling will receive a lump-sum payment at their regular hourly rate for the number of excess hours up to a maximum of 40 hours of annual leave. Any accumulated leave above their personal leave ceiling in excess of 40 hours will be forfeited.

It is our understanding that CFPB increased this buyback provision to 80 hours for 2020 due to the pandemic. We are not sure at this point whether CFPB will increase its buyback amount again for 2021. However, employees in this sister federal financial regulator obviously will be able to sell back to their agency at least 120 hours of use or lose leave during the pandemic, and possibly as much as 160 hours by the end of 2021.

The union has repeatedly communicated to SEC management that a buyback constitutes a rational solution to at least a part of the use or lose problem at our agency. Employees would be compensated for the annual leave that everyone agrees they have earned and should not be compelled to forfeit. And the agency could eliminate a substantial portion of the amount of excess annual leave that employees have accumulated due to a worldwide pandemic emergency that obviously is not their fault. Going forward, this will lead to a smaller reduction in agency productivity due to employee annual leave absences. The union also is fully committed to advocating for the necessary budget from our allies on the Hill to address this rather obvious need, with the actual buyback occurring after September 30 and thus in FY 2022, if necessary to meet management’s financial planning requirements.

The other component advocated by the union to address this issue is additional carryover of use or lose annual leave. However, merely carrying over the excess use or lose leave for yet another year into 2022, with a sunset at the end of 2022, will merely continue to compound the problem. Employees obviously will continue to earn and accumulate even more annual leave in 2022. Dealing with this problem each year on an individual case by case basis will be administratively burdensome for OHR, as well as for our staff. Furthermore, a large portion of our workforce taking lots of leave in 2022 will not be an optimal result for agency management either. For these reasons, union leaders have made it clear to management that the portion of COVID-19 related accumulated use or lose annual leave for 2020 and 2021 that is not subject to a buyback should be set aside with a predetermined sunset date that is more than one year beyond the end of 2021. This is just a commonsense proposal.

During the prior administration, SEC officials would not agree to a longer term solution to the use or leave problem, primarily because they appeared unwilling to acknowledge that the COVID-19 pandemic would last even to the end of 2020, let alone into 2021. We can all draw our own conclusions why that might have been the case, but in any event, the union obviously disagreed with this posture. We did the best we could by obtaining a full carryover of 2020 use or lose leave into 2021. We hope that during the current administration, SEC management will agree to a more coherent, rational response to address a very real issue that is of importance to SEC employees.

What Are Your Current Options for Dealing with Use or Lose Leave?

Unfortunately, at present, although we are already roughly 40% of the way through the 2021 leave year (we are currently in pay period 10), SEC management has yet to act decisively to deal with the obvious use or lose leave problem that has existed for over a year now. For that reason, we cannot yet report to you with precision what will happen this year so that you can make rational decisions for you and your family. You will have to do the best you can for now.

Given the SEC’s current posture, here are some of your options for planning purposes:

• Use some of your projected use or lose leave for a “staycation” at home. While many employees have expressed to the union that they do not want to waste annual leave sitting on their couch at home streaming even more TV than they already have been for over a year now, this nevertheless remains an option for you (perhaps you never got around to watching Game of Thrones, for example). It may be the case that SEC management is attempting to “force” this outcome by not immediately addressing the use or lose issue in a rational fashion—we do not know for sure. However, we do know that some SEC managers in some offices have been directly messaging to their employees, as recently as this week, to schedule their use or lose leave or risk forfeiture, making the union question management’s motivations regarding the issue when they have repeatedly told the union that they are seriously considering our proposals.
• In any event, if SEC management has not taken action by the end of the summer, make sure that you schedule all of your use or lose leave for use by the end of the year, well prior to the November 6, 2021 deadline. This is the only way to ensure that management will "restore" this leave with a two-year time horizon to use it by the end of 2023. You should not be required to forfeit time that you earned—annual leave is an important part of your compensation for your dedicated work at our agency. For employees still holding the full amount of use or lose leave, this means scheduling the full 10.4 weeks of annual leave by late September/early October for all of the remainder of the 2021 leave year (N.B.: the end of the leave year is January 1, 2022).
• Towards the end of the leave year, consider donating some or all of your use or lose annual leave to the union-negotiated “Leave Bank.” The Leave Bank makes donations to participating SEC employees who are members of the bank (membership requires opting in and making a donation of one pay period of annual leave per year) who need it to address a shortage of sick leave.

Thank you, and thanks for your union membership, which makes our continued advocacy on your behalf possible.