Can a Florida school board pay out more than 60 days of accrued vacation leave for employees on contracts signed before July 2001?

Plain-English summary

General counsel for the Osceola County School Board asked Attorney General Bill McCollum whether section 1012.65, Florida Statutes, limited the board to paying out no more than 60 days of accrued vacation leave when employees were on multi-year contracts signed before July 2001 and ending June 30, 2004.

The AG's answer turned on the history of the statute. Section 1012.65 sets a 60-day cap on terminal pay for accrued vacation leave, but says that cap took effect July 1, 2001, and "does not impair any contractual agreement established before July 1, 2001." Read alone, that might suggest pre-2001 contracts have no cap. But the AG pointed out that the predecessor statute, section 231.481, had already imposed the same 60-day cap back in 1995, applying to employees hired on or after July 1, 1995. So the cap did not first appear in 2001.

Putting the two together: terminal pay for vacation leave accrued before July 1, 2001, is governed by the school board's policies, contracts, or rules in effect on June 30, 2001. But because a 60-day cap already existed in the law for contracts entered after July 1, 1995, any such contract would still be limited to 60 days. The AG noted it had not been told the actual date the Osceola contracts were signed, so it framed the answer by date ranges rather than resolving the specific contracts.

Currency note

This opinion was issued in 2010. 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.

Background and statutory framework

District school boards have broad home rule powers under section 1001.32(2), Florida Statutes, to operate, control, and supervise public schools and to exercise any power not expressly prohibited by the constitution or general law. Within that authority, a board may adopt policies providing lump-sum terminal payments for accrued vacation leave when an employee leaves, retires, or dies.

Section 1012.65, part of the 2002 revision of Florida's Education Code (Chapter 2002-387, Laws of Florida), caps that terminal payment at 60 days effective July 1, 2001, while expressly preserving contractual agreements made before that date. The AG explained that the impairment-preserving language reflects that accrued annual leave can carry both property and contractual rights, so the Legislature made the change prospective to avoid impairing the obligation of contracts under Article I, section 10 of the Florida Constitution.

The key point the informal 2005 advice had not squarely resolved was the older cap. Section 3, Chapter 95-381, Laws of Florida, provided that "[e]ffective July 1, 1995, terminal pay for accrued vacation leave may not exceed a maximum of 60 days of actual payment for employees hired on or after that date." A Florida Senate interim report confirmed there was no statutory limit on terminal vacation pay for school employees hired before July 1, 1995, but a 60-day cap for those hired on or after that date. That history is why the AG concluded contracts entered after July 1, 1995 carry the 60-day limit even though they predate the 2001 statute.

Citations and references

Statutes and session laws:

• § 1012.65, Fla. Stat. (terminal pay for accrued vacation leave)
• § 231.481, Fla. Stat. (2001) (predecessor statute)
• § 1001.32(2), Fla. Stat. (school board home rule powers)
• Ch. 95-381, § 3, Laws of Fla. (1995 amendment adding the 60-day cap)
• Ch. 2002-387, § 741, Laws of Fla. (2002 Education Code revision)
• Art. I, § 10, Fla. Const. (no law impairing the obligation of contracts)

Source

• Landing page: https://www.myfloridalegal.com/ag-opinions/school-districts-payment-of-vacation-leave
• Original PDF: https://www.myfloridalegal.com/print/pdf/node/1672

Original opinion text

Ms. Suzanne D'Agresta

Brown, Garganese, Weiss &

D'Agresta, P.A.

Post Office Box 2873

Orlando, Florida 32802-2873

RE: ANNUAL LEAVE – VACATION LEAVE – TERMINAL PAY – SCHOOL DISTRICTS – terminal pay for vacation leave accrued prior to July 1, 2001. s. 1012.65, Fla. Stat.; s. 231.481, Fla. Stat. (2001).

Dear Ms. D'Agresta:

On behalf of and as General Counsel to The School Board of Osceola County, Florida, you have requested my opinion on substantially the following question:

Does section 1012.65, Florida Statutes, limit the school board to paying no more than 60 days of accrued vacation leave as terminal pay for leave for school board employees holding multi-year employment contracts entered into prior to July 2001 and ending June 30, 2004?

In sum:

The 60-day cap for the lump sum payment of accrued vacation leave established by section 1012.65, Florida Statutes, applies to contracts entered into after July 1, 2001. Section 231.481, Florida Statutes (2001), the predecessor statute to section 1012.65, however, also imposed a 60-day cap for contracts entered into after July 1, 1995. For school board employees holding multi-year employment contracts entered into prior to July 1, 2001, and ending June 30, 2004, such payments are governed by the terms of the contract. However, if such contract was entered into after July 1, 1995, the payments would be limited to 60 days.

In 2005, you contacted this office regarding whether the limitations on terminal pay contained in section 231.40, Florida Statutes (now section 1012.65, Florida Statutes), for accrued sick leave applied to terminal pay for vacation leave accrued under a contractual agreement entered into prior to July 1, 2001, and which expired on June 30, 2004. This office responded with an Informal Attorney General Opinion in which it was concluded that

"the limitations on terminal pay contained in section 231.40, Florida Statutes (2001), for accrued sick leave did not apply to terminal pay for vacation leave accrued under a contractual agreement entered into prior to July 1, 2001 and which expired on June 30, 2004. Rather, terminal payment for unused vacation leave accumulated before July 1, 2001, under a contractual agreement enter into prior to July 1, 2001, would be made pursuant to the district school board's policies, contracts, or rules that are in effect on June 30, 2001."[1]

However, you have been advised by the Auditor General's Office that the question regarding terminal pay for accrued vacation leave remains and that our informal opinion does not address the issue. You have asked for this office's assistance in resolving this matter.

Section 1001.32(2), Florida Statutes, provides that "district school boards shall operate, control, and supervise all free public schools in their respective districts and may exercise any power except as expressly prohibited by the State Constitution or general law." This has been acknowledged as giving school boards broad home rule powers to exercise any power for school purposes in the operation and supervision of the free public schools unless expressly prohibited by the constitution or general law.[2]

Section 1012.65, Florida Statutes, currently provides:

"Terminal pay for accrued vacation leave.—A district school board may establish policies to provide for a lump-sum payment for accrued vacation leave to an employee of the district school board upon termination of employment or upon retirement, or to the employee's beneficiary if service is terminated by death. Effective July 1, 2001, terminal pay for accrued vacation leave may not exceed a maximum of 60 days of actual payment. This limit does not impair any contractual agreement established before July 1, 2001. For unused vacation leave accumulated before July 1, 2001, terminal payment shall be made pursuant to the district school board's policies, contracts, or rules that are in effect on June 30, 2001."

This language was part of the 2002 revision of Florida's Education Code.[3] Section 1012.65, Florida Statutes, however, is substantially similar to its predecessor provision, section 231.481, Florida Statutes (2001), which imposed a 60-day cap for terminal pay for accrued vacation leave prospectively from July 1, 1995. The language in section 1012.65 specifically addressing the impairment of contractual agreements appears to acknowledge that school districts may have had outstanding contractual obligations predating the amendment and therefore imposes a continuing obligation on the districts to honor those contracts.[4] The right to accrued annual leave may implicate both property rights and contractual rights and the language of section 1012.65, Florida Statutes, thus, specifically recognizes the prospective nature of any such determination of terminal pay[5] by providing that the statutory changes do not affect contracts entered into prior to July 1, 2001.

A 60-day cap on terminal pay for accrued vacation leave, however, existed in the Florida Statutes prior to the enactment of section 1012.65, Florida Statutes. As noted above, section 231.481, Florida Statutes (the predecessor to section 1012.65, Florida Statutes), was amended in 1995 to include a 60-day cap on the maximum payment for terminal pay for accrued vacation leave.[6] A multi-year contract entered into after July 1, 1995, and prior to July 1, 2001, would be subject to the same 60-day limit as is currently codified in section 1012.65, Florida Statutes.

Thus, while section 1012.65, Florida Statutes, authorizes school boards to make terminal payments for vacation leave for unused vacation leave accumulated before July 1, 2001, pursuant to the district school board's policies, contracts, or rules in effect on June 30, 2001, or pursuant to a contract entered into before July 1, 2001, it would appear that a 60-day cap was legislatively imposed on those contracts entered into by school boards after July 1, 1995. This office has been provided no information on exactly when any contract with which you are concerned was originally entered into by the school board and a board employee. However, policies, contracts, or rules originating on or after July 1, 1995, would have been subject to the 60-day cap.

In sum, it is my opinion that section 1012.65, Florida Statutes, requires that the 60-day cap for the lump sum payment of accrued vacation leave established by section 1012.65, Florida Statutes, applies to contracts entered into after July 1, 2001. Section 231.481, Florida Statutes (2001), the predecessor statute to section 1012.65, however, also imposed a 60-day cap for contracts entered into after July 1, 1995. For school board employees holding multi-year employment contracts entered into prior to July 1, 2001, and ending June 30, 2004, such payments are governed by the terms of the contract. However, if such contract was entered into after July 1, 1995, the payments would be limited to 60 days.

Sincerely,

Bill McCollum

Attorney General

BM/tgh

[1] See Inf. Op. to D'Agresta, dated November 18, 2005.

[2] See Ops. Att'y Gen. Fla. 87-18 (1987), 89-87 (1989), 95-67 (1995), and 03-40 (2003).

[3] See s. 741, Ch. 2002-387, Laws of Fla.

[4] See s. 2, Ch. 2001-103, Laws of Fla.

[5] As the legislative history provided for SB 708 (amending s. 231.481, Fla. Stat.) indicates "[g]enerally, an employee is considered to have a property right to any annual or sick leave time he or she may have accrued, and is entitled to payment for the time if it is required to be relinquished. Because of this, changes in employee leave policies are usually prospective and are made effective on a date certain." See p. 2, Senate Staff Analysis and Economic Impact Statement for SB 708, dated March 12, 2001. And see Art. I, s. 10, Fla. Const., stating that "[n]o bill . . . impairing the obligation of contracts shall be passed." And see Art. I, s. 2, Fla. Const., providing that "[a]ll natural persons . . . are equal before the law and have inalienable rights, among which are the right to . . . possess and protect property[.]"

[6] Section 3, Chapter 95-381, Laws of Fla., provides that "[e]ffective July 1, 1995, terminal pay for accrued vacation leave may not exceed a maximum of 60 days of actual payment for employees hired on or after that date." As is noted in Interim Project Report 00-34 of The Florida Senate, "[t]here is no statutory limit on terminal payments for annual leave accumulated by school district employees hired before July 1, 1995, but for employees hired on or after that date the amount is capped at 60 days." See "Leave and Terminal Pay Provisions for Education Employees," p. 4, Interim Project Report 00-34, The Florida Senate, September 1999.