Use or Lose Leave Update (8-23-21)


Since Chair Gensler’s notice last week regarding his agreement with the union to extend “use or lose” annual leave into 2022, the union has received a number of questions about the issue from SEC employees, so we are providing an update.

This latest extension means that any SEC employee who has use or lose leave from 2020 and/or 2021 (i.e., annual leave above the 360-hour annual carryover) is not required to use it all by the end of leave year 2021 (January 1, 2022). The carried over leave will not be forfeited, but will instead remain as category 020 annual leave for use by the employee. If the employee continues to have use or lose leave at the end of 2022, he or she may schedule all of that remaining leave for use at the end of 2022 prior to the start of pay period 24 on November 6, 2022. Under OPM rules, the agency will then have the option of either (a) granting the leave for much of the last few months of 2022 or (b) denying all or part of the leave request and reinstating the denied leave for use by the end of leave year 2024.

This is not the optimal resolution of the COVID related use or lose leave situation at the SEC, as it is only marginally preferable to requiring all employees to use all of their accumulated use or lose leave by the end of this year. The union advocated strongly for a combination of a partial leave “buy back,” similar to what is provided to employees at the Consumer Financial Protection Bureau, while simultaneously allowing employees a longer period of time to use their remaining accumulated leave over the next few years. Such a resolution would benefit the agency by ensuring that there would not be a marked decrease in productivity at the agency from hundreds of employees taking a lot of time off in a shorter period of time. For that reason, most senior managers supported the union’s position on this issue.

In effect, the SEC’s COVID related use or lose policy amounts to “kicking the can down the road” for another year. Employees with high COVID related annual leave balances will continue to earn additional annual leave during 2022. For that reason, Chair Gensler’s desire that all employees use all of their use or lose annual leave that they accumulated during the pandemic by December 2022, as well as their not yet accrued 2022 annual leave, would result in hundreds of employees taking approximately a week off per month from now until the end of 2022. Given Chair Gensler’s desire to advance an ambitious regulatory agenda at the SEC in the coming months, this policy choice is difficult to understand.

Ironically, the SEC’s use or lose carryover notice was announced in the same all staff email that contained the announcement of the termination of COVID related admin leave on September 7, 2021. Presumably, Chair Gensler terminated the COVID related admin leave because he was concerned about the small decrease in productivity reflected by the 3%-4% total employee staff time spent using that admin leave (the union is speculating here, since management has never actually identified a specific interest for terminating the admin leave). However, if SEC employees in fact use all of their use or lose leave by the end of 2022, it would presumably result in a much larger impact on employee productivity—without the concomitant benefit of permitting employees with dependents necessary scheduling flexibility if daycare centers and schools close due to Delta variant COVID outbreaks this fall.

In any event, SEC employees will still retain the option of scheduling all of their remaining use or lose leave at the end of 2022, as described above. We will continue to keep you posted on this issue and our efforts to change the policy.