SB 229: State Employee Benefits Amendments - Utah

Substitute #4 → Enrolled · 7 edits · Mar 24, 2026

MODERATE

This bill finalizes a major overhaul of Utah's state employee benefits, replacing the old 'Annual Leave II' system with a new 'Paid Time Off' (PTO) program. It grants employees the choice to keep their current leave structure or switch to PTO, while simultaneously adjusting 401(k) matching rules and clarifying definitions for leave conversion and trust fund management.

Scope change

The bill expands the scope of the paid leave system by adding a new 'legacy program' option for current employees to retain their existing leave accruals, whereas previous versions only mandated a single PTO system for everyone.

DEFINITION

The definition of 'Division of Human Resources' was updated to 'Division of Human Resource Management' to reflect the correct agency name.

The reference for 'Paid time off' was changed from Section 63A-17-510.1 to Section 63A-17-515 to align with the newly enacted PTO statute.

ELIGIBILITY

A new 'legacy program' option was added, allowing current employees to elect to keep their existing annual leave and sick leave accruals instead of switching to the new PTO system.

TIMELINE

The deadline for the Division of Finance to establish the start date for the PTO program was extended from January 2, 2016, to July 1, 2027.

FISCAL

The State Employees' Leave Trust Fund was updated to explicitly include money set aside for accrued paid time off in addition to annual leave II.

REQUIREMENT

The 401(k) matching contribution rules were modified to differentiate between 'legacy qualifying employees' (who get a 100% match) and 'Tier II qualifying employees' (who get a tiered match based on contribution amount).

TECHNICAL

Several section numbers and cross-references were updated to reflect the new section numbers for the enacted PTO and leave bank statutes.

Introduced → Substitute #1 · 5 edits

MODERATE

This bill was amended to correct the House Sponsor's name, fix a typo in the effective date, and significantly update the 401(k) matching rules to provide better financial incentives for state employees. The most important change is the modification to the 401(k) match for Tier II employees, which now includes a 100% match on the first $26 contributed and a 50% match on contributions above that amount, replacing the previous flat 50% rate. Additionally, the automatic enrollment for new employees was clarified to ensure they contribute at least $26 biweekly to receive the full employer match.

Scope change

The bill's scope of applicability regarding the 401(k) match was expanded to provide a higher total potential employer contribution for Tier II employees, while the scope of the House Sponsor was corrected to reflect the actual sponsor.

TECHNICAL

The House Sponsor's name was changed from 'LONG TITLE' to 'Norman K Thurston'.

TIMELINE

The effective date was corrected from May 6, 2026, to February 10, 2026.

FISCAL

The 401(k) match rate for Tier II employees was changed from a flat 50% to a tiered system: 100% match on the first $26 contributed and 50% on any amount above $26.

REQUIREMENT

The automatic enrollment requirement for employees hired on or after July 1, 2023, was updated to require a personal contribution of the lesser of the employer's determined amount or $26 to receive the full match.

The maximum biweekly matching contribution for Tier II employees was updated to be the greater of 2% of their biweekly salary or $26.

Substitute #3 → Substitute #4 · 4 edits

MODERATE

This substitute bill updates the legislative text to reflect a new paid time off program, clarifying that it applies to both new and current employees who choose to participate. It also adds three new sections (63A-17-515 through 63A-17-516) that were not present in the previous version, likely containing additional procedural or technical provisions related to the benefits amendments.

Scope change

The bill's scope was expanded by adding three new sections (63A-17-515, 63A-17-516, and 63A-17-517) to the list of enacted sections, indicating new substantive content regarding state employee benefits.

ELIGIBILITY

The highlighted provisions were updated to specify that the paid time off program applies to both new agency employees and current employees who elect to participate, replacing the previous phrasing that only mentioned current employees.

DEFINITION

The highlighted provisions were revised to clarify that the 401(k) match modification applies specifically to qualifying employees who participate in the paid time off program.

SCOPE

Three new sections (63A-17-515, 63A-17-516, and 63A-17-517) were added to the list of enacted sections, expanding the bill's substantive content beyond the sections already listed in the previous version.

TECHNICAL

Minor formatting and spacing adjustments were made throughout the document, including the removal of stray page numbers and the standardization of the header information.

Substitute #2 → Substitute #3 · 5 edits

MODERATE

This substitute bill introduces a new 'leave bank' program and modifies the 401(k) matching contribution rules for state employees. It adds a requirement for agencies to establish a leave bank, changes the 401(k) match rate for Tier II employees, and includes technical corrections to existing sections regarding leave definitions and funding sources.

Scope change

The bill's scope expanded to include a new 'leave bank' program requirement and a new section (63A-17-514) that was not present in the previous version.

REQUIREMENT

Added a requirement for each agency to establish and administer a leave bank program.

SCOPE

Added a new section enacting 63A-17-514, Utah Code Annotated 1953.

ELIGIBILITY

Modified the 401(k) match rate for Tier II qualifying employees to 100% on the first $26 contributed and 50% on amounts above $26.

DEFINITION

Corrected formatting and numbering errors in the definitions of 'Qualifying account' and 'Qualifying employee' within Section 63A-17-805.

TECHNICAL

Removed extraneous text from Section 49-12-701 regarding the reporting of excess savings derived from early retirement incentives.

Substitute #1 → Substitute #2 · 6 edits

MODERATE

This bill substitutes a new version of SB 229 that modernizes state employee benefits by replacing traditional annual leave and sick leave with a new 'paid time off' system, adjusting 401(k) matching contributions, and expanding parental leave eligibility. The changes aim to streamline leave administration and improve retirement benefits for specific employee tiers while ensuring funding mechanisms align with the new leave structure.

Scope change

The bill's scope remains focused on state employees, but the applicability of leave accrual rules has shifted from traditional annual leave to a new paid time off framework, and parental leave eligibility has been expanded to include State Board of Education employees.

REQUIREMENT

Replaced the accrual and use of traditional annual leave and sick leave with a new 'paid time off' system, requiring agencies to convert existing accrued leave to paid time off at a one-to-one ratio by a specified date.

FISCAL

Established a new State Employees' Leave Trust Fund to manage costs associated with the converted paid time off, including provisions for interest earnings and specific funding sources for pre-change leave liabilities.

Adjusted the 401(k) employer match rates and contribution limits, introducing different match structures for Tier I and Tier II employees and setting new maximum contribution caps.

ELIGIBILITY

Expanded eligibility for parental leave and postpartum recovery leave to include employees of the State Board of Education, previously excluded from these specific benefits.

TIMELINE

Set specific effective dates for the paid time off conversion (July 1, 2027) and modified the timeline for implementing new rules governing parental leave administration.

TECHNICAL

Updated definitions throughout the code to reflect the new paid time off terminology and clarified the status of various employee categories regarding retirement and leave benefits.

State Employee Benefits Amendments

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