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California blew $413 Million last year on vacation payouts alone

Jacob Shelton April 21, 2025

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Sacramento, California – In a record-setting payout that has folks scratching their heads, California paid retired prison supervising dentist George Soohoo $1.2 million last year—not for extraordinary service but for unused vacation time. His payout marks the largest in state history and highlights a growing problem: ballooning leave liabilities that could destabilize budgets during a recession.

According to a Los Angeles Times analysis, Soohoo’s retirement cash-out places him at the top of a list of nearly 1,000 state workers who each received over $100,000 in unused time-off payouts in 2023. The state shelled out $413 million to departing employees last year for accrued leave.

But the financial risk doesn’t end there. According to the latest state controller’s report, California’s unfunded liability for unused vacation and leave time reached $5.6 billion in 2023—a 45% increase since 2019. The surge is largely attributed to overly generous time-off policies and poor enforcement of caps on vacation accruals, which are usually set at 640 hours.

“This is going to be a serious problem down the road,” said John Moorlach, director at the Center for Public Accountability at the California Policy Center. “I’m more disturbed than I am surprised.”

The Department of Corrections and Rehabilitation—Soohoo’s former employer—has the highest leave liability, with 22 million hours of unused time logged. Some of that time, like sick leave, can’t be cashed out but can still boost pension calculations.

Retired prison psychologist Victor Jordan, who received a $530,000 payout, said his leave balance grew steadily over his three-decade career, with time-off still banked from a 1992 budget cut plan. “I had hours sitting on the books for 30 years,” he said.

California’s policy allows time to be paid out at an employee’s final salary, not the rate at which the time was earned, creating massive payout disparities. In contrast, New York caps payouts at 30 days, and Texas limits vacation accruals far more strictly.

Former budget director Mike Genest called the current system “fiscally irresponsible,” noting that political resistance from powerful public-sector unions makes reform nearly impossible.

While some state departments have tried to offer vacation buybacks, the program was paused last year due to a worsening budget outlook. Officials, including Human Resources Director Eraina Ortega, say encouraging employees to take their vacation is key to improving fiscal stability and workforce wellbeing.

But as Jordan put it: “You start to earn so much vacation that there’s only so much you can take.”

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