The PTO payouts were more than five million dollars ($5,000,000)
Last March, Broward Health’s CEO Beverly Capasso and her executive team unilaterally decided to pay off all accrued employee time for tier 1 and tier 2 employees (about 300 managers), eliminate PTO accruals, and institute a policy of unlimited paid time off (as approved by their managers). The payouts were more than five million dollars ($5,000,000).
Newly appointed Commissioner Ray Berry discovered staff’s unilateral decision occurred without Board consultation because, as staff argued their decision related to “operations,” was budgeted and thus not in the purview of the Board.
Commissioner Berry wanted to talk about staff’s decision with his colleagues on the Board, so he asked that an agenda item be placed on the next meeting. The next meeting was the Jun/July regular board meeting scheduled for July 26th, 2018. When he arrived for the meeting, Commissioner Berry was surprised that the item was not on the agenda so, at the Board Finance Committee meeting held at 9:00 am, he moved that the item again be placed on the agenda for the board meeting scheduled for 3:05 pm that afternoon.
July 26, 2018, Broward Health Finance Committee Meeting Video
And so, at the end of the Jun/July regular Board meeting, there was a remarkably frank, open and professional discussion about the efficacy and provenance of a new policy – and, importantly – why the executive team should inform the Board about new policy initiatives (especially those involving significant cost, or changes in “liquidity”) before enactment.
The PTO policy change at Broward Health is one where reasonable people could differ reasonably – however, the PTO policy enacted by the staff was incomplete and implemented poorly from the perspective of a public fiduciary. There is little argument that before the implementation of such a dramatic policy change at Broward Health, it should have been brought to the Board’s attention, and the failure to do so was a staff stumble.
While everyone can have their own opinions, they cannot have their own facts – so, any thoughtful evaluation of the new PTO policy has to start with the facts as we know them.
First, before the new PTO policy, the affected employees accrued their earned time off and sick days at an escalating rate culminating at the daily rate at the time of separation. Thus, if an employee started at ten dollars ($10.00/hr) per hour and over a period of years reached one hundred dollars ($100.00/hr) per hour any vacation or sick days accrued at the ten dollars per hour rate would be paid out at one hundred dollars per hour. The financial argument for stopping the accruals is obvious and an appropriate staff financial goal.
Second, before determining the appropriate strategy for stopping the accruals – staff needed to evaluate the policies setting the accruals and some potential strategies to address the issue.
I do not know what those policies are for Broward Health but in other public organizations, there are many different approaches. One approach is for accruals to cap out. Another is for accruals to expire. In one public organization, the PTO accrual policy was not a policy at all but rather a practice. In that organization, accruals were simply eliminated by policy. In another public organization where a union represented the affected employees. In that organization, accruals were established through negotiation treating new employees according to the no accrual policy and existing and long-term employees could keep and continue to accrue, but at their earning rate at the time of the accrual and not at the time of their separation.
Third, “unlimited Paid Time Off” is misleading and inciting term. The proponents of the policy would say that the time must be “approved” and is not “guaranteed” and if abused (defined as not getting the job done – whatever that may mean) would result in termination.
Fourth, before changing the previous employment policy based on time to a job/performance standard, there was the necessary step of establishing objective standards for each job/performance and a minimum and maximum salary. These standards would need to include a minimum performance scorecard as well as the establishment of an appeal process for employees whose manager did not approve of the requested PTO.
Allegedly some of the PTO payouts were more than many times the annual salary of the average caregiver at Broward Health and a significant hit to the system’s liquidity. I have requested the list of PTO payments, but I have no idea when or if I will get it. When I do, I will post, however, the senior executive team of CEO Bev Capasso, Counsel Barrett, COO Gino Santorio and CFO Alan Goldsmith waived their payout to avoid the appearance of impropriety.
Correction: Counsel Barrett took her payout.
My sense of this issue is that staff miss-stepped and in so doing lost an opportunity to make additional and important structural changes at Broward Health. This action was well-meaning but was incomplete and implemented poorly. It is important to note that, although somewhat ill-advised – financially, the decision was neutral for Broward Health except for its cash liquidity which is not at risk.
Further, I noted that during the open and candid conversations with the Board, senior staff appeared to be open, honest, sincere and complete without either deception or avoidance. I hope this observation proves to be true because it would be refreshing.
You should note that before Chair Klein and Commissioner Berry, I don’t believe a public discussion would have occurred on this matter. I am seeing some evidence that Commissioner Wellins appears to be willing to join Commissioner Berry and Chair Klein in some honest, open and effective oversight. I encourage you to watch the PTO discussion at the end of the Jun/July Board Meeting video.