Abstract
Employees' fringe benefits packages have significantly increased as a percentage of total payroll costs. Business and governmental entities have developed benefit plans to provide their employees with compensated absences due to short-term illnesses. The instigation of an employee benefit plan also introduces the possibility of employee abuse. In response to this abuse, the State of Illinois developed a sick leave incentive plan which involves paying terminated employees cash for their accumulated unused sick days only for legitimate reasons. This paper discusses the State of Illinois' sick leave incentive plan as applied at a single state university. The discussion centers on the implementation of the incentive system, the development of three measures to evaluate the effectiveness of the system, the financial disclosure and lack of disclosure that presently occurs in the financial statements and budgets, and the long-term implications of the policy in terms of an unfunded liability.
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