OVERVIEW Sick Leave/Short- and Long-Term Disability

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1 OVERVIEW Sick Leave/Short- and Long-Term Disability

2 BACKGROUND Employer has been telegraphing for many years their desire to negotiate changes to the current system. TBS has stated that a new short-term disability plan and a modernized long-term disability plan should be developed in line with existing practices from large public sector employers in Canada.

3 BACKGROUND cont d Varying numbers related to absenteeism rates in the Public Service have been tossed around by many media outlets, think tanks and government agencies. WHAT S OUR TAKE?

4 DATA ANALYSIS In order to get our own picture of the situation in January 2013 the Classification, Compensation and Analysis Section of the Institute made formal requests to Treasury Board, CFIA and CRA for more comprehensive than usual sick leave data for the most recently completed fiscal year. This request was partially completed by all three Employers.

5 DATA ANALYSIS cont d Data was a breakdown of sick leave usage rates and banked sick leave by classification, across demographic factors. Data on unpaid sick leave was only provided by CFIA. No Employer provided any information on the usage of LTD plans or waiting periods. CRA only provided total hours of utilization with no demographic or population data. Unable to analyse.

6 DATA ANALYSIS cont d Other sources of data which formed part of the analysis included the TBS website and summary reports provided to the NJC members by SunLife Financial (regarding performance and usage of the LTD plan).

7 DATA ANALYSIS cont d Treasury Board groups: FY 11/12:Average sick leave usage for PIPSC members 9.43 days. FY 05/06:Average sick leave usage for PIPSC members 7.93 days. Increase of almost 19%. TB website quotes total paid sick leave for top 20 departments averaged 11.6 days for FY 11/12. CFIA usage rate for all PIPSC members was 9.1 days.

8 DATA ANALYSIS cont d Breakdown of sick leave usage by bargaining unit: Bargaining Unit Uncertified Leave (days) Certified Leave (days) TBS AV TBS CS TBS NR TBS RE TBS SH TBS SP CFIA IN CFIA S&A CFIA VM Total Paid Sick Leave (days)

9 DATA ANALYSIS cont d Breakdown of average sick leave usage by age for TB groups: Age Group Avg. Total Sick Leave Usage (days)

10 DATA ANALYSIS cont d Breakdown of average sick leave usage for CFIA groups: Age Group Avg. Total Sick Leave Usage (days) Under

11 DATA ANALYSIS cont d Breakdown usage TB & CFIA by gender: TBS Groups CFIA Groups Male Female

12 DATA ANALYSIS cont d Average Total Sick Leave Usage by years of service TBS Groups: Years of Service Avg. Total Sick Leave Usage (days)

13 DATA ANALYSIS cont d Average Total Sick Leave Usage Rate by CFIA Members: Years of Service Avg. Total Sick Leave Usage (days)

14 DATA ANALYSIS cont d Banked leave demographic breakdown: NOTE: 65 days required to qualify for LTD Bargaining Unit Avg. Sick Leave Bank (days) TBS AV TBS CS TBS NR TBS RE TBS SH TBS SP CFIA IN 87.9 CFIA S&A CFIA VM 96.3

15 DATA ANALYSIS cont d SH GROUP data: SH classification DE MD ND NU OP PH PS SW VM Avg. Sick Leave Bank (days)

16 LONG-TERM DISABILITY PLAN DATA Total plan population for non-management employees: 232,900 members* 12,124 currently receiving benefits Usage rate of 5.2% *SunLife Financial. Federal Government Disability Insurance Plan Summary Financial Report. January 1 to December 31, 2012.

17 CURRENT SYSTEM Federal Public Service employees currently accumulate 15 sick days per year. Unused days are banked for future use. Unused credits are non-pensionable. Unused credits cannot be cashed out, used as vacation or pre-retirement leave.

18 CURRENT SYSTEM cont d LONG-TERM DISABILITY(70% of income) If a long-term illness occurs, employees can/must apply for LTD benefits. 65 day waiting period must be completed before SunLife benefits begin. Entire sick leave bank must be exhausted before SunLife benefits begin. If an employee has less than 65 days banked sick leave can/must apply for EI sick leave benefits(55% of income to a set maximum).

19 PLANS FROM OTHER JURISDICTIONS A wide variety of other options exist. CONSIDERATIONS: Insurance provider or an Employer-sponsored plan? Who pays the premiums? (or what is the split?) Taxable/Non-Taxable benefit? Amount of income protection (typically range from 70 to 100% for short-term plans). Maximum time period? Waiting period? Link to Long-Term Disability?

20 SICK LEAVE vs. DISABILITY INSURANCE Under current sick leave provisions, employees are able to bank unused sick time, which can be beneficial in the event of longer-than-average sick periods. Two scenarios that could leave a member without coverage in the case of serious illness or disability: Member does not have enough sick time banked to cover the waiting period. Member is suffering from a recurring illness or disability: the first bout forces the liquidation of banked sick leave, subsequent bouts result in a shortage of credits available to provide coverage.

21 SICK LEAVE vs. DISABILITY INSURANCE Short-Term Disability: Usually not a lengthy waiting period to access income replacement benefits. Beneficial to those with recurring illness. Could be an easier transition to long-term disability. Coverage varies (70% to 100% of earnings). May have a premium to member.

22 EXAMPLES Situation Employee is initially ill for a period of 6 months (130 days/26 weeks). CS-02 earning $75,000. Returns to duty for a period of 6 months (130 days/26 weeks). Second/subsequent illness for a period of 6 months (130 days/26 weeks). Total period 18 months.**

23 EXAMPLES cont d Long-service Federal Public Servant with 15 weeks banked sick leave: Must utilize entire 15 weeks to attain the waiting period requirements of the Long-Term Disability Plan. Remaining 11 weeks will be covered by Long-Term Disability. Second period of disability will have exhausted sick leave bank. Short-term Federal Public Servant with 3 weeks banked sick leave: Must utilize entire 3 weeks of sick leave. Must apply for and obtain Employment Insurance Benefits for the remaining 10 weeks of the waiting period. Remaining 11 weeks will be covered by Long-Term Disability. Second period of disability will have exhausted sick leave bank.

24 EXAMPLES cont d Ontario Employee covered by HOODIP 5 years+ 15 weeks at 100% of salary Remaining 11 weeks must apply for and obtain Employment Insurance Benefits Second period covered under same requirements as first as it is Short-Term Disability University of Ottawa IT Professional (PIPSC member) 119 days of sick leave at 100% upon completion of probationary period Beyond 119 days moves to LTD at 66 2/3 percent Second period covered under same requirements as first Canada Post PSAC 5 days at 100% coverage Weeks 2 to 16 at 75% of salary Weeks 17 and up at 55% of salary Second period covered under same requirements as first as it is Short-Term Disability

25 EXAMPLES cont d *Based on a CS-02 salary at $75,000/year or $112,500 over 18 month period EMPLOYEE Longservice Public Servant* Shortservice Public Servant* Ontario HOODIP* University of Ottawa* Canada Post PSAC* Jan/13 to June/13 July/13 to Dec/13 Jan/14 to June/14 TOTAL Percentage of Salary $32,688 $37,500 $20,254 $90,442 80%** $20,908 $37,500 $20,254 $78,662 70% $27,650 $37,500 $27,650 $92, % $36,384 $37,500 $36,384 $110,268 98% $24,480 $37,500 $24,480 $86,460 77%

26 Thank You