NEWS

ACSS Call with CalHR and Finance - No Federal Funds to Reverse Employee Compensation Cuts

On October 14, ACSS joined CalHR Director Eraina Ortega and Chief Deputy Paul Starkey on a call with labor unions and employee organizations providing an update from Director of Finance Keely Bosler on the efforts to secure additional federal funding.

Triggers to Restore Employee Compensation Not Met

The 2020-2021 State Budget Act (AB 89) includes trigger language that would restore 18 categories of budget cuts if additional federal funds are available by October 15, 2020.

In a surprise to no one, Finance Director Bosler reported that no additional federal money was received by the deadline and therefore none of the Budget Act cuts will be restored.

Under Section 8.28 of the Budget Act, if $14 billion were received, the restored funding for employee compensation would add up to $1.89 billion which would end the PLP 2020 program (Section 3.90) and potentially restore the suspended general salary increases for state employees (Section 3.91). With receipt of federal funds by October 15 of more than $2 billion, but less than $14 billion, the restoration among the 18 budget categories would be proportional.

Although this means the PLP 2020 program will likely remain in place at least through the end of the budget year in June 2021, no additional state employee compensation cuts have been authorized by the Legislature.

Deficits Remain and Expenditures Up, but Budget Outlook Not as Dire as Projected in April 2020

Finance Director Bosler noted the Administration is continuing the effort to obtain needed federal funds as deficits are projected for the next few years. With any funds received after the October 15 Budget Act deadline, it is likely the Administration would work with the Legislature again to allocate those funds.

The Finance April 2020 economic forecast was bad, but thankfully was wrong with several months of revenue coming in higher than anticipated. At the same time expenditures related to wildfires have been higher than expected. While deficits will continue to be projected as the Governor’s 2021-2022 proposed budget is put together, they will be smaller deficits than originally projected.

There is no hard state hiring freeze as they want to continue to have flexibility to hire where needed. State departments will be getting instructions through a Finance budget letter to plan to reduce operating expenses by 5 percent for FY 21-22.

Open Enrollment for Health, Dental and Vision Begins September 21, 2020

Open Enrollment for health, dental and vision coverage starts September 21 and ends October 16. This is your opportunity to evaluate your health care selections and make any changes to your health, dental or vision plans and add or drop dependents effective January 1, 2021.

Dental and vision premiums remain unchanged, but health premiums are increasing. Basic Health Maintenance Organization health plans will increase by an average of 4.44% while Basic Preferred Provider Organization plans will see an average increase of 8.54%.

The 2021 Consolidated Benefits (CoBen) allowance to be used for health, dental and vision benefits effective January 1, 2021 will decrease slightly to $693 (Single)/$1340 (2-Party)/$1723 (Family). The employer contribution is calculated based on the weighted average premium of the four largest enrolled health plans. Even though health premiums are increasing, because one of the lower cost plans moved into the top four enrolled plans, this results in a slightly lower employer contribution for 2021. The new 2021 CoBen amount for supervisors, managers, and confidential employees is $52 per month higher than the state employer contribution for most rank-and-file employees.

If you would like to explore different health plan options, CalPERS has a tool that allows you to search plan availability and premium rates based on your zip code. Visit the CalPERS website.

CalHR is expected to update the “Benefits Calculator” portion of the CalHR website for comparison of plan costs and calculating your exact out of pocket costs, or your CoBen cash back if your selections are lower than the CoBen Allowance. Visit the CalHR Benefits calculator and select “2021” and “Excluded Employee” before entering your options.

Be on the lookout for Open Enrollment forms from your department. If you are not making changes, no action is needed.

CalHR Announces the State will Continue to Collect Payroll Taxes

CalHR Director Eraina Ortega has announced the Administration will not implement a deferral of the withholding and payment of the employee's portion of the Social Security payroll taxes. This means payroll taxes will continue to be withheld from all state employee paychecks.

The federal policy allows the deferral of payroll taxes from September 1 through December 31, 2020, but the employee taxes are still owed and would be recovered from employees by April 30, 2021. To avoid a double withholding for state employees in 2021 to recover the taxes due, the Administration has declined to participate in the deferral program.

Director Ortega's September 2, 2020 message states:

"On August 8, 2020, President Trump issued a Presidential Memorandum directing the IRS to allow the deferral of withholding, deposit, and payment of payroll tax obligations for certain employees effective September 1, 2020. IRS guidance provided on August 28, 2020, clarifies employers can, but are not required to, participate in this program. After evaluation and consideration of the IRS guidance, the Administration is concerned that while the employer withholding obligation would be deferred in 2020, employees would experience a double withholding in 2021 to recover the taxes due. Further, if an employee separates from state service before the deferred tax was collected, the state may be required to pay the tax from state funds. For these reasons, the Administration has determined the program will not be implemented for State of California employees."

Please contact your ACSS Labor Relations Representative with any issues or concerns regarding this matter.

Excessive Heat Warning Prompts State Offices to Close Early – Aug 17 - 19

CalHR Director Eraina Ortega has issued office closures in the afternoon hours for the next few days due to excessive heat and to conserve energy resources.

In a message on Sunday August 16th, she states:

“Due to multiple Excessive Heat Warnings issued throughout the state and the need to reduce energy demand during peak hours, state departments are directed to close at 3pm starting on Monday August 17 through Wednesday August 19 (“heat period”). Departments providing critical public safety and health care functions during the heat period are exempt from the closure and should reduce energy consumption as much as safely possible.

Building managers should work to reduce energy consumption throughout the day by, for example, turning off all unnecessary lights and equipment and closing blinds and other window coverings. After 3pm, please ensure air conditioning and other large equipment use is reduced as much as possible while maintaining health and safety.

Employees currently scheduled to telework during this period of excessive heat should continue to do so. Employees on telework are encouraged to reduce energy consumption, especially during peak hours.

An employee who is paid on an hourly basis and who is scheduled to telework, but is unable to perform any work due to a blackout during this heat period shall notify management and be provided Administrative Time Off (ATO) for that day for those unworked hours.

All employees working on site will end their workday at 3pm. Employees who are paid on an hourly basis will be provided ATO for the balance of their work hours. Please remind employees to reduce energy consumption at home, more information about how to save energy can be found here.

If a state office loses power at any point during business hours during this heat period, the office should close and ATO shall be provided to hourly-paid employees who cannot telework.

In administering any time off or office closures due to this heat period, state departments should refer to existing laws and rules, policies, and applicable labor agreements.

Please contact CalHR’s Personnel Services Branch at PSB@calhr.ca.gov for any questions about ATO.”

Please contact your ACSS Labor Relations Representative for any issues or concerns regarding this matter.

ACSS Board of Directors Cancels All In-Person Meetings Through 2020

The ACSS Board met via conference call on August 1, 2020. The primary issue discussed by the Board was the effect of the COVID-19 pandemic on ACSS members, including those effects in the workplace and by the adoption of PLP days and the State Budget.

The number one issue of importance was the health, safety and welfare of ACSS members. The Board also discussed how best ACSS can continue it’s hard work in advocating for our members and providing member service.

As a result of these discussions, the ACSS Board of directors has unanimously determined that it is in the best interest of our members, and our organization as a whole, that all in-person meetings of ACSS members be cancelled through the end of the year. This includes all chapter and board meetings. ACSS is actively investigating technological alternatives to in-person meetings to ensure communication and networking opportunities continue in a safe manner the future.

During this time, ACSS remains fully operational in advocating for the interests of our members and in representing those members in the workplace and statewide.

Paychecks and a California Supreme Court Pension Ruling

Pay Warrants

Not all of the July 1, 2020 adjustments and increases have made it into state employee pay warrants. Excluded employees related to the SEIU bargaining units (1, 3, 4, 11, 14, 15, 17, 20 and 21) will see the $260 health affordability payment in a separate pay warrant, which appears to be on track to issue within approximately two weeks.

As expected, the pay warrants of excluded employees related to IUOE units 12 and 13 contain the “OPEB/CERBT” deduction for prefunding retiree healthcare. We await the pay letter and differential providing pay to offset this deduction. ACSS also expects implementation of a special salary adjustment for employees in the criminalist series and an adjustment to longevity pay for some S07 and M07 excluded employees.

An error at the State Controller’s Office resulted in too little being withheld from July paychecks for the employee portion of the required contribution toward retirement. The amount of the error varies based on salary, but is estimated to be near $100 for the highest earners and less for other employees. Next month’s paychecks will have the correct amount deducted for retirement. Next month will also include an additional one time employee deduction labeled as “*PERS ADJ” to collect the rest of the July employee retirement contribution. This means that state employees will not likely see the “correct” amount of their take home pay checks until the September pay period.

There are a very small number of ACSS members who were excluded by CalHR from expected special salary adjustments. ACSS will continue to work with CalHR to address these exclusions and other issues arising in connection with salary adjustments.

Pension Ruling Preserves the Core of the “California Rule”

The California Supreme Court issued a unanimous ruling on July 30, 2020 in Alameda County Deputy Sheriff's Association v. Alameda County Employees’ Retirement Association. This significant pension case concerned pension cuts for local public employees following the Public Employees’ Pension Reform Act of 2013 (PEPRA) where overtime, callback and vacation pay were eliminated from pension calculations.

Although it is a local pension case, the legal issues concerned the long standing “California Rule.” Since 1955, the courts have held under the California Rule that once pension benefits are granted to a public employee, they are vested and cannot be modified for the duration of an employee’s career.

ACSS joined in the requests for the high court to hear this pension case to preserve the long-standing California Rule to protect from the possibility of your pension being changed by future legislation or through an initiative measure. With this California Supreme Court ruling, that goal was largely accomplished.

Although the court allowed the pension modifications challenged by the local unions, it did so by finding the changes closed loopholes to eliminate pension spiking. This narrow approach rejected the arguments to rescind or modify the California Rule and broadly allow changes to vested pension rights.

The ruling may present an opportunity for narrow pension modifications, but any modifications still have to meet stringent constitutional standards protected by the contracts clause. In short, the core defined benefit formulas and provisions governing state employee pensions and retirement calculations remain protected and unaffected by this decision.

CalHR Issues Pay Letters and Pay Differentials Adjusting Pay

This week CalHR issued a series of Pay Letters and Pay Differentials adjusting pay for excluded employees. CalHR confirmed to ACSS that the expectation remains that the State Controller’s Office will implement the major changes with the July pay period. This means the next paychecks are expected to include the following:

Personal Leave Program 2020 – a reduction in pay of 9.23% (equivalent to two days’ pay) and accrual of 16 hours of personal leave credit, to be used in the same manner as vacation/annual leave and before any other paid leave (except sick leave).

Suspension of “OPEB/CERBT” Employee Contribution – excluded employees will not pay the contribution to prefund retiree healthcare. The contributions range generally from 2 percent to 4.6 percent of salary. Excluded employees related to bargaining units 12 and 13 will continue to see the deduction, but will receive a pay differential in an equivalent amount. (This pay differential has not yet issued, but is expected to be retroactive to July 1, 2020 if not implemented with the July pay warrant.)

Although General Salary Increases effective July 1, 2020 were suspended or deferred, Merit Salary Adjustments for employees not at the top step of their classifications are unaffected and will continue.

Exempt and Excluded Employees Associated with SEIU Bargaining Units (1, 3, 4, 11, 14, 15, 17, 20, and 21)

• $260 per month taxable cash benefit to improve access and affordability of healthcare
• Geographic Pay of $250 per month for employees working in Orange, Santa Cruz, Santa Barbara and San Luis Obispo Counties
• Special Salary Adjustments (generally 5%) for employees in nearly 100 classifications

>>Click here to review the Pay Letter listing the excluded employee classifications receiving the SSA increases.

Exempt and Excluded Employees Associated with Unit 18

• A General Salary Increase of 2.75% retroactive to January 1, 2020
• A Special Salary Adjustment at the top step of 2.5%, effective July 1, 2020 (S18 and M18 employees at the top step of the class for 12 months or more will receive the increase immediately; others will receive the increase through Merit Salary Adjustments when eligible)

As of today, ACSS awaits a Pay Letter implementing expected salary adjustments for S07 and M07 excluded employees related to the Criminalist series and changes to longevity pay, and a change to a pay differentials for DSH Police Officers and S16 and M16 employees for Continuing Medical Education expenses.

ACSS’ initial review has identified a few anomalies in the Special Salary Adjustments. We will pursue clarification and possible corrections or potential amendments to the Pay Letters with CalHR.

Excluded Employee Compensation Plan for 2020-2021

The Department of Human Resources (CalHR) has released the outline of the excluded employee pay plan for the 2020-2021 fiscal year. We are pleased that the outline contains most of the items ACSS has advocated for in light of the Administration’s mandated state employee compensation decreases due to the large state budget deficits related to the ongoing pandemic.

The exempt and excluded pay plan effective July 1, 2020 includes:

• Two day-per month Personal Leave Program (PLP) reducing compensation by 9.23% and providing 16 hours of leave credit per month. The PLP credit will not need to be used in the month it is accrued, but taken before other paid leave (except sick leave).
• Suspending employee payments to pre-fund retiree health care. The deduction is shown on your pay warrant as “OPEB/CERBT”. The deductions for employees related to units 12 and 13 will continue, but be offset by a pay differential.
• General Salary Increases are suspended.
• Special Salary Adjustments and Pay Differentials will be extended to exempt and excluded employees where appropriate.
• All employees related to the nine SEIU Local 1000 bargaining units (1, 3, 4, 11, 14, 15, 17, 20, and 21) will receive a $260 per month taxable cash benefit to offset health care costs.
• The Vacation/Annual Leave Cap is increased by the amount of the PLP accrued for excluded employees related to bargaining units 2, 9, 10 and 19.

CalHR is working on pay letters to implement the details of the leave program and special salary and pay differential adjustments. CalHR expects to issue a series of pay letters “in the coming weeks” and has informed ACSS they are working with the State Controller’s Office to try to implement the majority of the salary adjustments in the July pay period.

As the pay letters are developed, ACSS will continue advocacy with CalHR to ensure excluded employees receive all appropriate special salary adjustments and pay differentials and will keep you informed regarding the expected timing of the pay adjustments.

Excluded Employee Compensation Update – Personal Leave Program

The employee compensation reductions called for by the Governor and reflected in the state budget are coming into focus. The Legislature encouraged rank-and-file groups to agree to reductions through collective bargaining. Without those agreements, the Legislature would authorize employee compensation reductions. Two groups have reached agreement, including SEIU Local 1000 representing nine of the State’s 21 bargaining units and the California Correctional Peace Officers Association (CCPOA), representing Bargaining Unit 6.

The Local 1000 agreement gives a road map to other bargaining units and sets the expectations for likely excluded employee compensation adjustments – a two-day per month “Personal Leave Program” offset in part by suspending the employee contribution to pre-fund retiree health care. This framework is consistent with the approach ACSS has advocated for in light of the excluded employee compensation reductions required by the recent COVID-19 related budget deficits being addressed by the revised state budget.

SEIU Local 1000 Agreement

The tentative agreement or “Side Letter” to modify the Local 1000 labor contract includes the following for rank-and-file employees:

• Two day-per month Personal Leave Program (PLP) reducing compensation by 9.23% and providing 16 hours of leave credit per month for two years
• Suspending employee payments to pre-fund retiree health care for two years; employees will not pay this contribution which would otherwise increase to 3.5% effective July 1, 2020
• All employees will receive $260 per month to offset health care costs
• Defers the 2.5% July 1, 2020 general salary increase for two years (the 2% increase scheduled for July 1, 2021 is not impacted)
• Special Salary Adjustments (generally 5%) for 176 classifications of employees will still be paid effective July 1, 2020
• If federal money is received and/or state budget revenue allows, the cuts and deferrals could end early

Under the PLP, employees work their full schedules. The reductions do not change salary ranges and do not impact benefits or retirement calculations. PLP credits do not count toward the vacation/annual leave cap and need to be used before other paid leave, except sick leave.

With the $260 per month and suspension of the retiree health contribution, the PLP reductions of 9.23% will be significantly mitigated for most employees. Some employees receiving special salary adjustments will still see small increases in their paychecks despite the PLP reductions.

What This Means for Excluded Employees

The Administration has made clear it intends to tie excluded employees to their related bargaining units in achieving salary savings. It is expected that other bargaining units will reach agreements for two-days of PLP, offset in part by suspending the employee contribution to pre-fund retiree health care.

CCPOA representing Bargaining Unit 6 (correctional officers) agreed to a one-day PLP and to different compensation reductions including holiday pay reductions and suspension of night and weekend shift differentials. It is not likely that other units will be able to find enough cost savings to meet the required reductions to avoid a second day of PLP.

ACSS has pushed for any compensation cuts for excluded employees to be offset in part by suspending the pre-funding of retiree health care. ACSS has also made clear to CalHR that the $260 per month health care affordability payment and the special salary adjustments must also be provided to all related excluded employees to avoid salary compaction issues.

With the SEIU Local 1000 Side Letter tentative agreement, we have reached out to CalHR to reiterate these requests and to also ensure that a fair package is in place for excluded employees not directly related to a bargaining unit. Should any rank-and-file unit not reach agreement and instead allow salary reductions to be imposed, ACSS will work to ensure that the reductions for related excluded employees are equitable.

As bills approving agreements reached by rank-and-file organizations are presented to the Legislature for approval, ACSS will continue its aggressive advocacy in protecting the employment interests of excluded employees. ACSS will also keep you informed with the latest information regarding your salaries and benefits.

CDPH Releases Guidance Requiring Californians to Wear Face Coverings

The California Department of Public Health today released an updated guidance that requires Californians to wear a face covering in high-risk settings. A growing body of scientific research has shown that people with no or few symptoms of COVID-19 can still spread the disease and that the use of face coverings, combined with physical distancing and frequent hand washing, will reduce the spread of COVID-19.

Governor Gavin Newsom said, “We are seeing too many people with faces uncovered – putting at risk the real progress we have made in fighting the disease. Science shows that face coverings and masks work. They are critical to keeping those who are around you safe, keeping businesses open and restarting our economy.”

Today's guidance mandates the use of cloth face coverings by the general public statewide when outside the home, with limited exceptions. The guidance outlines scenarios in which wearing a face covering is required and also outlines those who are exempt from wearing a face covering.

More information about the state's COVID-19 guidance is on the California Department of Public Health's Guidance web page.

More information about reopening California and what individuals can do to prevent the spread of COVID-19, visit Coronavirus (COVID-19) in California.