1.  Eligibility.

All probationary and non-probationary employees shall be required to participate in the Banked Leave Time Program (Program) known as Part B hours under the State’s Annual and Sick Leave Program.

2.  Definitions and Description of Program.

An employee shall work a regular work schedule, but receive pay for a reduced number of hours. The employee’s pay shall be reduced by four hours per pay period. The employee will be credited with a like number of Banked Leave Time (BLT) hours for each biweekly pay period.

3.  Hours Eligible for Conversion to Program.

The number of BLT hours for which the employee receives credit shall be accumulated and reported periodically to participating employees. During the term of this Letter of Understanding, an employee shall not be able to accumulate in excess of 188 BLT hours. Accumulated BLT hours shall not be counted against the employee’s regular annual leave cap, known as Part A hours under the Annual and Sick Leave Program.

The employee shall be eligible to use the accumulated BLT hours in a subsequent pay period in the same manner as regular annual leave, pursuant to Article 28.

4.  Timing of Conversion of Unused Program Hours.

Upon an employee’s separation, death or retirement from state service, unused BLT hours shall be contributed by the State to the employee’s account within the State of Michigan 401(k) plan, and if applicable to the State of Michigan 457 plan. Such contributions shall be treated as non-elective employer contributions, and shall be calculated using the product of the following: (i) the number of BLT hours and, (ii) the employee’s base hourly rate in effect at the time of the employee’s separation, death, or retirement from state service.

If the amount of a projected contribution would exceed the maximum amount allowable under Section 415 of the Internal Revenue Code (when combined with other projected contributions that count against such limit), the State shall first make a contribution to the employee’s account within the State of Michigan 401(k) plan up to the maximum allowed, and then make the additional contribution to the employee’s account within the State of Michigan 457 plan.

5.  Insurances, Leave Accruals and Service Credits.

Retirement service credits, overtime compensation, longevity compensation, step increases, continuous service hours, holiday pay, annual and sick leave accruals, cleaning allowance, physical standards and fitness incentive, and other pro-rations that would disadvantage any employee will continue as if the employee had received pay for the BLT hours. Premiums, coverage and benefit levels for insurance programs (including LTD) in which the employee is enrolled will not be changed as a result of participation in the Program. Employees shall incur no break in service due to participation in the Program. The Program is not intended to have a negative effect on the Final Average Compensation calculations under the State’s Defined Benefit Plan nor the salary used for employer contribution calculations under the State’s Defined Contribution Plan. Banked Leave Time hours are to be treated as time worked and time paid for purposes of retirement.

 

6.  Relationship to Plan A and Plan C.

Before incurring unpaid Plan A or Plan C hours all BLT hours must be exhausted.

8.  Term.

The Program shall be effective beginning January 2, 2005 and shall be in effect through the pay period ending October 22, 2005. No additional blt hours will be requested by the Employer for the duration of this Agreement that expires on December 31, 2007.