In re Marriage of Abrell, Ill, No.107755 (per Thomas) (February 4, 2010)
During the course of his marriage, Appellee accrued 115 sick days and 42 vacation days through his employment, which were the subject of a potential division of property in an action for dissolution of marriage. The appellate court held the trial court erred in treating the accrued sick and vacation days as marital property, assigning a value to them, and including them in the marital estate. Appellant argued the appellate court’s decision reversed a 20-year practice in the courts of treating accrued vacation time and sick days as marital property subject to distribution.
As a question of law, are accrued vacation days and sick days marital property subject to distribution in an action for dissolution of marriage?
No. Although Appellee’s accumulation of vacation and sick days occurred during his marriage to Appellant, the accumulation of those days had only a future value that was indeterminate and speculative; thus, the days were not marital property. Affirmed.
Following Akers v. Akers, 729 N.E. 2d 1029 (Ind. App. 2000), the court found no present right to be paid for sick days other than by becoming ill. The court reasoned that Appellee’s accumulated, unused sick days had no present value and had only a future value that was indeterminate and speculative and, thus, were not capable of division as a marital asset. Following the reasoning in Thomasian v. Thomasian, 556 A.2d 675 (1989), the court found the entitlement to vacation and sick days is not the same as property rights in pension or retirement benefits, which are forms of deferred compensation. Because vacation and sick days replace wages on days when the worker does not work, they are only an alternate form of wages. They may be, and often are, dissipated when the employee takes sick or vacation time to which he or she is entitled. Underscoring the speculative nature of sick and vacation days as property, the court noted the possibility that Appellee’s employer could change its policy on the right to receive compensation for accrued sick and vacation days by limiting or eliminating the right entirely.
The dissent argued accrued vacation days are Appellee’s property because they are a debt due to him as part of the compensation he had earned for work already performed. If the compensation was earned during the marriage, it is marital property. Although this particular asset is not as liquid as money in the bank or stocks in a portfolio, the lack of liquidity does not mean the asset is not property.
Further, under the Illinois Wage Payment and Collection Act, (Wage Act) 820 ILCS 115/1 et seq.(West 2008), once days are earned, the employer is obligated either to grant the employee the vacation time with pay or to pay the employee for the accrued days upon termination of employment. No employment contract or employment policy shall provide for forfeiture of earned vacation time upon separation from employment. Furthermore, although the Wage Act does not protect sick days, sick days may also constitute the employee’s property. The mere fact they are difficult to value does not render them nonproperty; they are a form of deferred compensation that appellee had the right to receive either during his remaining years of employment or upon termination of employment. Appellee acquired the sick and vacation days while he was married to Appellant; therefore, they are marital property. 750 ILCS 5/503a (West 2004). The dissent would reverse the appellate court and affirm the circuit court’s judgment.
Intellectually, I probably agree more with the dissent here. Not unlike unvested stock options that are marital property (at least in part), these benefits have value and should be included as property–despite the difficulties valuing them. Countless marital assets are difficult to value, yet remain part of the marital estate. However, as a practitioner, this decision takes one more issue off the table—which is a good thing. I just can’t imagine trying to quantify sick days on a marital balance sheet. SNP