Question

A city allows employees one day of sick leave a month and permits them to accumulate any sick leave they do not take. If they terminate after at least 10 yrs of service, they will be paid for unused sick leave up to 30 days. In 2017, employees earned 10M of sick leave that they did not take during the year. The city estimates that of this amount 7M will be paid to employees in future years as sick leave, 2M will be paid to ten-year employees upon termination, 1M will not be paid. What is the total amount of sick leave that will be paid to employees in future years?

1) 7M
2) 2M
3) 1M
4) Cannot be determined

Answer 1

The total amount of sick leave expected to be paid to employees in future years is 9M, as it includes 7M estimated to be paid as future sick leave and 2M expected to be paid upon termination after at least 10 years of service.

Step-by-step explanation:

To calculate the total amount of sick leave that will be paid to employees in future years, we need to consider both the sick leave that will be taken by employees and the leave that will be paid upon termination for those with at least 10 years of service. The city has indicated that out of 10M of sick leave not taken in the year:

• 7M is estimated to be paid as future sick leave,
• 2M is expected to be paid to employees upon termination after 10 years,
• 1M is estimated not to be paid at all.

Therefore, the total amount of sick leave expected to be paid in the future is the sum of sick leave taken in the future and the leave paid upon termination, which is 7M + 2M, giving us 9M in total.