After the Arkansas Valley Tech merger into Arkansas Tech, who is eligible for unused sick leave payouts at retirement?

Plain-English summary

When Arkansas Valley Technical Institute merged into Arkansas Tech University on July 1, 2003, Act 452 of 2003 included a savings clause: "Employees of [Valley Tech] as of June 30, 2003 who are eligible for payment of accrued sick leave upon retirement or death under Arkansas Code § 21-4-501 shall retain that benefit." A decade later, Arkansas Tech's president asked three questions about how that clause works in practice.

The AG's answers, simplified:

1. On the merger date itself, was § 21-4-501 in effect for any Valley Tech employees? No. The 1999 act that created § 21-4-501 explicitly excluded "state-supported institutions of higher learning." So when the merger took effect July 1, 2003, the statute did not apply to any higher-ed employee.

2. Are former Valley Tech employees who are still working at Arkansas Tech today eligible?

   • For classified employees, yes. The current version of § 21-4-503(a)(3) makes § 21-4-501 apply to "[c]lassified employees of state-supported institutions of higher education." So if a former Valley Tech employee is a classified Arkansas Tech employee at retirement or death, the lump-sum payout applies.
   • For non-classified employees, it depends. Higher-ed institutions have discretion under § 21-4-505 about whether to pay accumulated sick leave to non-classified employees. But § 21-4-503(b) preserves any "benefits or agreements established under § 6-57-103," which is the Valley Tech merger statute. If Valley Tech had agreements in place with non-classified employees on June 30, 2003 to pay sick leave under § 21-4-501, then those agreements were carried into Arkansas Tech and the non-classified former Valley Tech employees retain that benefit.

3. For non-classified employees who never worked at Valley Tech, does Arkansas Tech have discretion? Yes. Section 21-4-505 leaves that decision entirely to the institution.

The opinion uses in pari materia construction to read § 21-4-501, § 21-4-503, and § 6-57-103 together. The merger statute's reference to "benefits" Valley Tech employees would "retain" only makes sense if there were pre-merger agreements to pay sick leave; otherwise the savings clause would have nothing to save.

Currency note

This opinion was issued in 2016. Subsequent statutory amendments, court decisions, or later AG opinions may have changed the analysis. Treat this page as historical context, not current legal advice. Verify current law before relying on any specific rule, deadline, or remedy mentioned here.

Common questions

Q: What is the sick leave payout under § 21-4-501?
A: A lump sum at retirement or death, based on a sliding scale tied to accumulated unused sick days. The percentages step up: 50% at 50-59 days, 60% at 60-69 days, 70% at 70-79 days, and 80% at 80+ days. The payment is calculated against daily salary (annual salary / 260). The total payout is capped at $7,500.

Q: Why didn't the higher-ed exclusion in the 1999 act change things permanently?
A: Because the legislature later amended § 21-4-503 to include classified higher-ed employees. So the operative law for retirement and death events occurring after that amendment captures classified employees at Arkansas Tech, including those who came over from Valley Tech.

Q: What does "classified" versus "non-classified" mean in this context?
A: Classified employees fall within the state's classified pay-plan system. Non-classified employees, often faculty, certain administrators, and others, are paid outside that system and are subject to institutional discretion on benefits like the sick-leave payout.

Q: What does the pre-merger agreement look like in practice?
A: The statute does not specify the form. An agreement at Valley Tech could be a written contract, a policy statement, or a course of dealing recognized by the institution. Arkansas Tech HR (with university counsel) would have to look at Valley Tech's records as of June 30, 2003 to determine what was in place.

Q: What about non-classified employees who joined Arkansas Tech after the merger?
A: They get whatever Arkansas Tech decides under § 21-4-505. The merger savings clause does not reach them.

Q: The opinion mentions two other mergers (NPC and ANC). Why?
A: Because § 21-4-503(b) preserves benefits or agreements established under § 6-57-103 (Valley Tech merger), § 6-58-105 (Garland CC and Quapaw Tech merged into National Park Community College), and § 6-59-105 (Cotton Boll Technical Institute merged into Arkansas Northeastern College). The NPC and ANC statutes are clearer because they directly entitle employees to lump-sum sick leave payments. By contrast, § 6-57-103 talks about "retained" benefits, which is what created the ambiguity for Arkansas Tech and required this opinion.

Background and statutory framework

Section 21-4-501 was enacted by Act 1127 of 1999 and originally excluded "state-supported institutions of higher learning." That exclusion was later modified so that classified higher-ed employees are now covered under § 21-4-503(a)(3).

Section 21-4-503(b) preserves "any employee benefits or agreements established under § 6-57-103, § 6-58-105, or § 6-59-105." Those three statutes are merger statutes for the consolidation of technical institutes into existing higher-ed institutions in 2003. Each merger created a category of carryover employees with potentially distinct sick-leave entitlements.

Section 6-57-103 governs Valley Tech, which became part of Arkansas Tech. It is structured differently from the other two: rather than entitling employees directly to a lump-sum payment, it provides that "[e]mployees of Arkansas Valley Technical Institute as of June 30, 2003, who are eligible for payment of accrued sick leave upon retirement or death under § 21-4-501 shall retain that benefit." The "retain" language tells us there must have been a benefit in place at Valley Tech to retain, and § 21-4-503(b) anchors that benefit despite § 21-4-505's general discretion for non-classified higher-ed employees.

Under the in pari materia rule (Central Okla. Pipeline; Mays v. Cole), statutes on the same subject must be read together harmoniously. Reading § 21-4-501, § 21-4-503, and § 6-57-103 together yields the layered answer the AG provided.

Citations and references

Statutes:

• Ark. Code Ann. § 21-4-501 (sick leave compensation)
• Ark. Code Ann. § 21-4-503 (application to listed agencies, classified higher-ed employees, and preserved agreements)
• Ark. Code Ann. § 21-4-505 (higher education discretion for non-classified employees)
• Ark. Code Ann. § 6-57-103 (Valley Tech merger sick leave clause)
• Ark. Code Ann. §§ 6-58-105, 6-59-105 (NPC and ANC sick leave provisions)

Cases:

• Central Okla. Pipeline, Inc. v. Hawk Field Srvs., LLC, 2012 Ark. 157, 400 S.W.3d 701 (in pari materia)
• Mays v. Cole, 374 Ark. 532, 289 S.W.3d 1 (2008) (in pari materia)

Source

• Landing page: https://arkansasag.gov/divisions/opinions-foia/attorney-general-opinions-search/

Original opinion text

Opinion No. 2016-067
November 2, 2016
STATE OF ARKANSAS
ATTORNEY GENERAL
LESLIE RUTLEDGE

Dr. Robin E. Bowen
Office of the President
Arkansas Tech University
1509 N. Boulder Ave., Suite 210
Russellville, AR 72801

Dear Dr. Bowen:

This is in response to your request for my opinion on several questions concerning the payment of accumulated, unused sick leave to certain employees of Arkansas Tech University.

As you have noted in the background information submitted with your questions, Arkansas Valley Technical Institute ("Valley Tech") was merged into Arkansas Tech University ("Arkansas Tech") by Act 452 of 2003, which included a provision stating that "[e]mployees of [Valley Tech] as of June 30, 2003 who are eligible for payment of accrued sick leave upon retirement or death under Arkansas Code § 21-4-501 shall retain that benefit." You have also recited some of the legislative history of the subchapter of the Arkansas Code governing compensation for state agency employees' unused sick leave. You have pointed out that a state-supported institution has the discretion to compensate non-classified employees for accumulated sick leave; and you have stated that currently, Arkansas Tech does not provide such compensation.

Against this background, you ask:

1. When Act 452 of 2003 was enacted, were the individuals employed as of June 30, 2003 at Arkansas Valley Technical Institute, whether classified or non-classified, eligible for compensation for unused sick leave upon the employee's retirement or death under Ark. Code Ann. § 21-4-501?
2. If the answer to question #1 is "no", are current Arkansas Tech University employees, who were employees of Arkansas Valley Technical Institute on June 30, 2003, whether classified or unclassified, eligible upon retirement or death for compensation for unused sick leave under Subchapter 5 - Financial Incentives to Decrease Use of Sick Leave - as it exists today?
3. If the answer to question #1 is "yes", [then] with regard to unclassified employees only, is it permissible for Arkansas Tech University to compensate upon retirement or death only those individuals who were unclassified employees of Arkansas Valley Technical Institute on June 30, 2003, but not other non-classified employees of Arkansas Tech University?

RESPONSE

Valley Tech was merged into Arkansas Tech on July 1, 2003. I take your first question to be asking whether Ark. Code Ann. § 21-4-501 applied to Valley Tech employees at the time of the merger. The answer to that question is "no" because at that time, section 21-4-501 did not apply to any employees of state-supported institutions of higher education. In my opinion, however, the inapplicability of section 21-4-501 on July 1, 2003, to employees of higher education is not relevant to what appears to be your main concern. I take it from your remaining questions that you are mainly concerned about what happens in the future when current employees of Arkansas Tech who were employees of Valley Tech as of June 30, 2003, retire or die.

In this regard, and in response to your second question, it is my opinion that the unused sick leave compensation requirement of section 21-4-501 applies to classified employees of Arkansas Tech, including those who were employees of Valley Tech on June 30, 2003. But in my opinion, the eligibility of non-classified Arkansas Tech employees who were employees of Valley Tech as of June 30, 2003, for this compensation depends upon the existence of agreements prior to the July 1, 2003 merger to pay Valley Tech employees the accrued sick leave benefits provided under section 21-4-501. It is my opinion in response to your third question that Arkansas Tech has discretion to decide whether to provide the unused sick leave compensation under 21-4-501 to non-classified employees of Arkansas Tech who were not employees of Valley Tech on June 30, 2003.

DISCUSSION

Question 1: When Act 452 of 2003 was enacted, were the individuals employed as of June 30, 2003 at Arkansas Valley Technical Institute, whether classified or non-classified, eligible for compensation for unused sick leave upon the employee's retirement or death under Ark. Code Ann. § 21-4-501?

Section 21-4-501 requires that accumulated, unused sick leave be paid "upon retirement or death" to "any employee or beneficiary of any employee of any agency of the State of Arkansas" based on a sliding scale depending on the number of sick leave days accumulated. This provision did not apply to any employees of state-supported institutions of higher education on July 1, 2003, when Valley Tech was merged into Arkansas Tech pursuant to Act 452 of 2003. Section 21-4-501 was enacted under Act 1127 of 1999, and that act excluded "state-supported institutions of higher learning" from its provisions.

The answer to your first question is therefore "no." In my opinion, however, the inapplicability of section 21-4-501 on July 1, 2003, to employees of higher education is not relevant to what appears to be your main concern.

Question 2: If the answer to question #1 is "no", are current Arkansas Tech University employees, who were employees of Arkansas Valley Technical Institute on June 30, 2003, whether classified or unclassified, eligible upon retirement or death for compensation for unused sick leave under Subchapter 5 - Financial Incentives to Decrease Use of Sick Leave - as it exists today?

In my opinion, there is no direct correlation between the response to your first question and this question. The subchapter you have referenced, Ark. Code Ann. §§ 21-4-501 through 505, addresses compensation for accumulated, unused sick leave for state agency employees. Although section 21-4-501 refers to "any employee" of a state agency, the application of section 21-4-501 is governed by Ark. Code Ann. § 21-4-503, which states in relevant part:

(a) The provisions of §§ 21-4-501 and 21-4-504 apply to:
(1) Employees of the Arkansas State Game and Fish Commission;
(2) Employees of the Arkansas State Highway and Transportation Department;
(3) Classified employees of state-supported institutions of higher education; and
(4) Employees of all agencies of this state whether in the executive, legislative, or judicial branch of government.
(b) The provisions of this section or any amendments to this section shall not change any employee benefits or agreements established under § 6-57-103, § 6-58-105, or § 6-59-105.

Section 21-4-501's unused sick leave compensation requirement thus plainly applies to "[c]lassified employees of state-supported institutions of higher education," pursuant to subsection 21-4-503(a)(3). This would include classified employees of Arkansas Tech who were employees of Valley Tech on June 30, 2003.

With regard, however, to non-classified employees of state-supported higher education institutions, the institutions generally have discretion, pursuant to Ark. Code Ann. § 21-4-505, to decide whether to provide the compensation for unused sick leave that must be provided to classified employees under section 21-4-501. Thus, based solely on the provisions of sections 21-4-501 through 505, non-classified employees of Arkansas Tech who were employees of Valley Tech on June 30, 2003, are not eligible for the unused sick leave compensation under section 21-4-501 unless Arkansas Tech decides to provide such compensation.

But consideration must also be given to Ark. Code Ann. § 6-57-103 when dealing specifically with non-classified employees of Arkansas Tech who were employees of Valley Tech on June 30, 2003. According to subsection 21-4-503(b), "any employee benefits or agreements established under § 6-57-103, § 6-58-105, or § 6-59-105" are unchanged by section 21-4-503. Subsection 21-4-503(b) thus plainly contemplates that some "benefits or agreements" might be established in connection with accrued sick leave compensation under the referenced statutes. The rules of statutory construction require that this language be considered together with the referenced statutes in order to identify those "benefits or agreements."

Arkansas Code Annotated § 6-57-103 is part of the body of the law governing the July 1, 2003 merger of Valley Tech with Arkansas Tech. It provides in relevant part as follows regarding the "payment of accrued sick leave" for "[e]mployees of Arkansas Valley Technical Institute as of June 30, 2003":

(a)(1) Employees of Arkansas Valley Technical Institute as of June 30, 2003, who are eligible for payment of accrued sick leave upon retirement or death under § 21-4-501 shall retain that benefit.
(2) This benefit shall be paid upon the employee's retirement or death from the funds restricted to expenditures in support of Arkansas Valley Technical Institute.
(3) Individuals employed after June 30, 2003, shall not be entitled to receive compensation under § 21-4-501.

Section 6-57-103 thus distinguishes between "[e]mployees of Arkansas Valley Technical Institute as of June 30, 2003" and "[i]ndividuals employed after June 30, 2003." The latter presumably refers to those first employed at the Valley Tech campus after the merger. The statute does not actually establish any benefits, but instead contemplates the existence of benefits which Valley Tech employees as of June 30, 2003 will "retain." With regard, specifically, to sick leave compensation, it contemplates some of these employees being "eligible for payment ... under § 21-4-501 ...."

When section 21-4-503(b) is read together with section 6-57-103, it becomes clear that these statutes contemplate the possible existence of agreements prior to the July 1, 2003 merger of Valley Tech with Arkansas Tech to pay Valley Tech employees the accrued sick leave benefits provided under section 21-4-501. Under this reading, eligibility for the payment does not arise directly under section 21-4-501, but instead depends upon the existence of any such agreements.

This reading is reinforced, in my opinion, by a review of the other statutes referenced in section 21-4-503(b): "§ 6-58-105 [and] § 6-59-105." These statutes address sick leave compensation for employees of National Park Community College and Arkansas Northeastern College, respectively. The language regarding payment for sick leave is identical for both institutions:

The employees of [NPC and ANC] shall be entitled to lump sum payment for unused sick leave under a program similar to that authorized by §§ 21-4-501 and 21-4-502.

When section 21-4-503(b)'s reference to "employee benefits or agreements established under § 6-57-103, § 6-58-105, or § 6-59-105" is considered in light of the above language, it is apparent that the "employee benefits" are the lump sum payments required by sections 6-58-105 and 6-59-105. The "agreements" reference is then properly interpreted to apply to section 6-57-103.

It is therefore my opinion that the answer to your question with regard to non-classified employees depends upon the existence of agreements, prior to the July 1, 2003 merger of Valley Tech with Arkansas Tech, to pay Valley Tech employees the accrued sick leave benefits provided under section 21-4-501. As noted above, state-supported higher education institutions generally have discretion to decide whether to provide non-classified employees the compensation for unused sick leave that must be provided to classified employees under section 21-4-501. But if Valley Tech had an agreement with its non-classified employees on June 30, 2003, to pay for this sick leave compensation, then in my opinion, any current, non-classified Arkansas Tech employees who were employees of Valley Tech on June 30, 2003, are entitled to retain that benefit.

Question 3: If the answer to question #1 is "yes", [then] with regard to unclassified employees only, is it permissible for Arkansas Tech University to compensate upon retirement or death only those individuals who were unclassified employees of Arkansas Valley Technical Institute on June 30, 2003, but not other non-classified employees of Arkansas Tech University?

In my opinion, Arkansas Tech has discretion under Ark. Code Ann. § 21-4-505 to decide whether to provide sick leave compensation for non-classified employees of Arkansas Tech who were not employees of Valley Tech on June 30, 2003.

Sincerely,

LESLIE RUTLEDGE
Attorney General

cc: Thomas W. Pennington, University Counsel