The Supreme Court for the State of New Jersey ruled that the State is legally permitted to limit the amount of unused sick time for administrators. A lawsuit was filed challenging the constitutionality of NJ public employee compensation regulations. The regulations cap the payment for accumulated sick time at $15,000 for certain school administrators. .
The restriction was enacted by the State Legislature in 2007. The Act sought to prevent the issuance of excess benefits for clothing allowances, chauffer services, and sick-time payments in the hundreds of thousands of dollars.
Employment lawyers for the New Jersey Association of School Administrators filed a lawsuit and challenged the law. The Association argued that the state could not arbitrarily reduce employee compensation.
The New Jersey Supreme Court disagreed with the Association. In New Jersey Association of School Administrators v. Schundler, the NJ Supreme Court stated: "We conclude that the Legislature had the authority to modify terms and conditions for future contracts for public employment in a manner that did not raise constitutional concerns," the court ruled in a 5-0 decision.