Can the South Dakota Board of Finance lawfully say that a state employee stops earning new annual leave once they put in notice that this vacation is the last thing before they quit?

Plain-English summary

A state administrator named Mr. Sell asked AG Gordon Mydland about two Board of Finance regulations. The setup: SDCL 3-6-6 said every state employee earned a set number of vacation days per year, accruing monthly, cumulative for two years. The regulations (40.00800 and 40.00801) said an employee who took a vacation and came back to work continued to accrue leave during the vacation, but an employee who scheduled a vacation as the final stretch of employment before terminating would not accrue any new leave after their last actual working day.

The AG ruled against the regulations. SDCL 3-6-6 gave the right to accrue leave to every state employee. The Board of Finance had no statutory authority to distinguish between an employee on vacation who returned to work versus one whose resignation took effect at the end of the vacation. Two earlier AG opinions (49 AGR 386 and 65 AGR 114) had already concluded that an employee whose resignation became effective at the end of a vacation remained a state employee throughout the vacation. Mydland concurred, and noted the unfairness: a conscientious employee who delayed vacation until work was finished would be punished, while one who took vacation first and resigned at the end would be rewarded.

The AG concluded that an employee could accrue annual leave during any period of state employment, including this final vacation, despite those two regulations. He expressly made that conclusion subject to other annual leave regulations.

Currency note

This opinion was issued in 1971. 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. State employee leave administration may have been restructured since 1971; current Bureau of Human Resources rules and the modern equivalent of SDCL 3-6-6 should be checked before applying this opinion's reasoning to a present-day situation.

What the opinion meant at the time

For state employees planning a resignation, the opinion said annual leave could accrue through a vacation ending on the termination date, subject to other annual leave regulations. It did not address payment for unused leave at separation.

For the Board of Finance and state personnel administrators, the opinion was a clear "you cannot do that by regulation." Distinguishing between employees based on what they would do at the end of vacation was administrative line-drawing that the statute did not authorize.

For personnel administrators, the opinion explained why the two cited regulations could not deny accrual solely because an employee had given notice of resignation effective at the end of vacation. Other annual leave regulations still applied.

Common questions

Q: Did the AG set aside every annual leave regulation?
A: No. He rejected the distinction in Regulations 40.00800 and 40.00801 between employees who return from vacation and those whose employment ends then. He said accrual remained subject to other annual leave regulations.

Q: Does giving notice end state employment on the last day worked?
A: The AG relied on earlier opinions saying an employee whose resignation became effective on the last vacation day remained a state employee during the vacation.

Q: Did the opinion address the cumulative-for-two-years cap?
A: The opinion mentions that leave was cumulative for two years but does not analyze how that limit applies to a particular employee. It says accrual remained subject to other annual leave regulations.

Q: What about sick leave?
A: No. The opinion addresses annual leave under SDCL 3-6-6 and the two cited Board of Finance regulations.

Q: Can a current employee rely on these old regulations?
A: The opinion addresses the statute and regulations quoted at the time. Check current annual leave rules before applying its conclusion today.

Background and statutory framework

SDCL 3-6-6 allowed every state employee annual vacation leave with pay, accrued monthly and cumulative for two years. The two Board of Finance regulations addressed in the opinion denied accrual during a vacation ending in termination, while allowing it for an employee who returned to work.

The AG said the statute gave the Board of Finance no guidelines authorizing this distinction between employees. He concluded that a state employee retained the rights and responsibilities of employment while on vacation, and could accrue leave during employment, subject to other annual leave regulations.

The two earlier opinions (49 AGR 386 and 65 AGR 114) had already drawn the line: an employee on a vacation that ended with resignation remained a state employee throughout. Mydland's opinion simply applied that conclusion to the specific Board of Finance regulations.

Citations and references

Statutes:

• SDCL 3-6-6 (state employee annual leave; cumulative two years)

Prior AG opinions:

• 49 AGR 386
• 65 AGR 114

Board of Finance regulations addressed:

• Regulation 40.00800
• Regulation 40.00801

Source

• Landing page: https://atg.sd.gov/OurOffice/OfficialOpinions/opinionhtml.aspx?id=500

Original opinion text

Validity of Board of Finance Regulation No. 40.00800-01

Dear Mr. Sell:

You have asked whether Board of Finance Regulation No. 40.00800 and 40.00801 are in violation of SDCL 3-6-6. The regulations in question provide that an employee may not accrue annual leave when he is on annual leave and terminating employment. In other words, an employee may accrue annual leave, even when he is on vacation, if he returns to his job. However, if he gives notification that he is terminating employment at the end of his vacation, he cannot accrue additional annual leave after the last day he works, even though he remains an employee of the state until his annual leave is used up.

SDCL 3-6-6 is the statute which provides that every state employee shall be allowed a certain number of days leave of absence for vacation with pay each year. Such leave of absence is to be accrued on a monthly basis and is cumulative for two years.

Although this exact question has never been answered by an Attorney General's Opinion, 49 AGR 386 and 65 AGR 114 are pertinent. In those opinions, the Attorney General held that an employee whose resignation was to become effective on the last day of his vacation, remained an employee of the state during his vacation.

I concur in those opinions, and it is further my opinion the statute in question does not give the Board of Finance any guidelines authorizing discrimination between employees on this basis. An employee of the state retains all the rights and responsibilities of his employment irrespective of the fact that he is on vacation. To discriminate against those who delay their vacation until their work is completed would place the conscientious employee in an unfair position with an employee who takes his vacation and gives notice of resignation on the last day of his vacation.

To reiterate, it is my opinion that irrespective of Board of Finance Regulations 40.00800 and 40.00801, an employee may accrue annual leave during any period of time in which he is employed by the state, subject, of course, to other annual leave regulations.

Respectfully submitted,

Gordon Mydland

Attorney General