A law that changes how state employees are compensated for sick leave remains on hold.

The state Supreme Court on Thursday denied a motion by state attorneys to vacate the court's order to halt a law scheduled to take effect Jan. 1. The law now won't take effect until at least 30 days after the court has had a chance to rule on a Utah Public Employees Association's appeal.

The association is appealing a ruling by 3rd District Judge William Barrett, who said state employees don't have a right to post-retirement benefits until they're vested, and that the Legislature didn't violate the state constitution by changing its own laws.

The high court decided late Thursday it will instead hold hearings to determine, among other things, whether the new law is unconstitutional.

Although state attorneys wanted a Supreme Court ruling by Jan. 15, 2006, to help lawmakers who may be replacing or revising the law, lawyers for both sides seemed willing to make some concessions.

Attorneys for some state employees wanted the case resolved by Feb. 1, 2006, at the earliest in order to have more time to air and examine the issue thoroughly.

The Supreme Court justices noted that these dates would give them little time to make a careful decision, but they promised to make every effort to decide this case "expeditiously."

The high court, which didn't specify a date for the ruling, will hear oral arguments in the case on Jan. 10.

State workers can now trade one unused sick day for a month of state-paid health insurance upon retirement. But a new law that passed the Legislature this year and was set to take effect Jan. 1, 2006, would change that.

The new law instead offers a dollar-for-dollar exchange, and also requires employees to cash out one-quarter of their unused sick leave and put that into their 401(k) retirement savings plan.

Clark Waddoups, attorney for the state, told the justices Thursday that the emergency order was procedurally incorrect because it was issued before the state had an opportunity to respond and have its arguments heard.

In essence, the order gives the UPEA everything it had sought, Waddoups said.

In addition, Waddoups said in a legal brief that the emergency order will impose a financial burden on the state if litigation proceeds.

He argued the order "essentially requires the state to incur ever-increasing liabilities to all state employees who continue to accrue sick leave under the current program, and who would be entitled to convert that sick leave to health insurance upon retirement" — even if UPEA loses its legal battle.