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ACSS Seeks to Mitigate Impact of Employee Compensation Reduction Proposals

Posted: 5/22/2020 Tags: benefits COVID-19 legislation policy representation salary Tags Views: 1220

As the state budget moves forward in the next few weeks, it is very likely that excluded employee compensation reductions and a delay of anticipated salary increases will be part of the budget solutions.

While ACSS cannot collectively bargain over these proposed reductions, the Administration’s planned salary reductions cannot be achieved without legislative approval. ACSS is therefore taking active steps to mitigate the impact of reductions through the legislative process and with CalHR. Mitigating the reductions includes:

  • Avoid Straight Cuts in Pay 
    If salary has to be reduced, it should be through a temporary furlough or personal leave program that provides leave in exchange for the salary reduction and does not change salary ranges, nor negatively impact retirement calculations.

  • Flexibility in a Furlough Program 
    If excluded employees are furloughed, there must be flexibility for supervisors and managers to continue meeting the workload with reduced staff. ACSS is requesting that CalHR implement the program in a way that allows maximum flexibility for excluded employees by not requiring the leave be used in the same month it is accrued.

  • Suspend Employee Contributions to Pre-fund Retiree Health Care 
    Each month excluded employees have a deduction labeled “CERBT” which stands for California Employers’ Retiree Benefit Trust. This deduction is to pay the employee share of pre-funding retiree health care. Most ACSS members are scheduled to pay between 3.5 to 4.5 percent of salary per month. Suspending the payment for at least the duration of the salary reductions will mitigate the reduction in take home salary with no impact on eligibility for health care benefits in retirement.

  • Health Care Affordability Payment 
    SEIU Local 1000 negotiated a $260 per month payment for employees enrolled in a health plan. ACSS asked that this payment be provided to all excluded employees. The current proposal is to allow the $260 per month payment to go forward July 1, 2020 for both SEIU rank-and-file employees and related excluded employees.

    For some ACSS members, suspending the retiree health care deduction and providing the $260 per month would almost completely offset the salary reduction of a two-day furlough. For others, getting one or both would partially offset the temporary salary reduction.

  • Federal Trigger Language 
    The Administration is proposing that the salary reduction authority would end if federal money is received. While this is positive, the details have not been developed. ACSS will push for language to directly address the impact of federal funding on excluded employees.

  • Salary Adjustments 
    Most ACSS members were scheduled for general salary increases and thousands anticipated special salary adjustments (SSA) July 1, 2020. The Administration is proposing no increases. While the treatment of delaying these raises will certainly be impacted by rank-and-file bargaining, it needs to be acknowledged that SSAs were planned to address recruitment and retention issues. Delaying these increases, and exacerbating recruitment and retention problems by cutting pay, will almost certainly lead to more attrition through retirement. The SSAs need to be paid as soon as possible to address likely retention issues.

ACSS is aware that other groups have proposed retirement incentives as a cost saving measure and that nothing in the Administration’s current proposals address incentives for those excluded employees providing front line COVID-19 response. If there is room to advocate on these issues, ACSS will do so through the state budget deliberative process and with CalHR.

We will keep you apprised as these significant budget decisions and proposed reductions move forward.


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State Budget Deficit Leads to Employee Compensation Reduction Proposals as Part of the May Revise

Posted: 5/14/2020 Tags: budget COVID-19 legislation pension policy salary Tags Views: 7448

In response to a state revenue reduction of over 30 percent, the Administration is proposing a number of costs savings measures including reductions in employee compensation of 10% from June 2020 levels and proposed reductions in state operations costs (office space, leases, travel, and procurement).

The plans were outlined to labor representatives yesterday in connection with today’s release of the Governor’s “May Revision” to the state budget proposal. CalHR Director Eraina Ortega and Deputy Director Paul Starkey held a call this morning with ACSS Executive Director Rocco Paternoster and ACSS attorney Gerald James to discuss the proposals and impacts for excluded employees.

As part of the budget process, the Administration is seeking to “pull back” all salary increases (general salary increases and special salary adjustments) scheduled for July 1, 2020 for excluded employees and rank-and-file employees. They will also seek authority to reduce employee compensation by 10% effective July 1, 2020.

CalHR will attempt to negotiate the 10% reductions with each rank-and-file bargaining unit. If agreements cannot be reached with those units, the authority sought from the Legislature would allow CalHR to impose two days of unpaid furloughs per month, which would result in a 9.24% salary reduction, on state employees effective July 1, 2020. As of this morning, CalHR intends to link employee compensation reductions for supervisors and managers with their related bargaining units.

To mitigate the impact of any compensation reductions, the state is also considering a pause on state employees paying to prefund retiree healthcare. If passed by the Legislature, relief from excluded employees paying this “OPEB” contribution would range from 4.6% of salary to 1.4% of salary (for the highest paid state employees). ACSS realizes this does not come near offsetting the proposed reduction in take home pay, but it is a helpful mitigating step.

The proposed reductions are based on current economic projections from the Administration. The Legislature makes its own economic projections. The budget authority sought by the Administration will include a provision that if additional federal funding is received (related to the pandemic), these employee compensation reductions can be revisited.

While the employee compensation reduction plan will likely be impacted by bargaining conducted by the rank-and-file bargaining units, ACSS has already begun discussions with CalHR over the details related to excluded employees. ACSS will also seek to ensure that the authority to reduce compensation provided by the Legislature to CalHR is done in a manner that protects the interests of excluded employees as best as possible by ensuing compensation decreases are equitable. We will keep you apprised as these significant budget decisions and proposed reductions move forward.


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California Supreme Court Hears Argument in Local Pension Case

Posted: 5/5/2020 Tags: benefits legislation pension policy retirement Tags Views: 487

The California Supreme Court held oral argument on May 5, 2020 in Alameda County Deputy Sheriff's Association v. Alameda County Employees’ Retirement Association. This is one of the two significant pension cases pending before the state high court concerning pension cuts for local public employees following the Public Employees’ Pension Reform Act of 2013 (PEPRA).

Although it is a local pension case, the legal issues argued may impact 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 these types of pension cases 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.

In Alameda, the Deputy Sheriff's union and others challenged the elimination of overtime pay, on-call pay, call-back pay, vacation and sick leave sold back, recruitment bonuses, and other items from pension calculations. The lower appellate court had ruled that many of these pension cuts for current employees were legal, but ruled some pension benefits required further review under the California Rule. Allowing the pension reductions for current employees is a significant deviation from the California Rule. Both sides had asked the high court to review the case.

At oral argument, the county retirement boards argued that including these “pension spiking” items in a pension calculation was never lawful and that employees had no reasonable expectation that they would be included in a pension calculation for future service. The unions argued that this deferred compensation cannot be changed for existing employees during their public employee careers.

It is unclear whether the Supreme Court’s decision in this case will be decided on broad constitutional grounds with possible impacts on the California Rule and implications for all public employees and their pensions, or will be decided on a narrow basis, affecting only the parties to the litigation or local employers and employees. The matter was taken under submission with a decision expected in the next month or two.

ACSS will continue to keep you apprised of important pension issues and inform you of actions taken to protect the interests of excluded state employees.


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Department of Finance Implements Cost Savings Measures – Leave Buy Back Cancelled

Posted: 5/1/2020 Tags: COVID-19 legislation policy Tags Views: 716

In response to decreased state revenue and increased costs associated with the COVID-19 pandemic, the Department of Finance issued a Budget Letter on April 30, 2020 calling for current fiscal year expenditure reductions. Effective immediately, the Budget Letter requires state agencies and departments to take the following actions:

  • Leave Buy-Back — Cancellation of the annual leave buy back of accumulated vacation or annual leave in 2019-20
  • New Goods and Services Contracts — Bans purchases or service contracts unless they directly support teleworking strategies or respond to COVID-19 (including PPE and hand sanitizer), or meet other time-sensitive critical needs
  • Travel — Continues the non-essential travel ban for in state and out-of-state travel
  • Hiring — Advises departments to use discretion when filling vacancies to maintain flexibility in an environment of severely constrained resources

We know many ACSS members count on leave-cash out to reduce leave balances below the cap and provide additional income. While it is extremely disappointing the program will not be offered this year, especially for those working long hours responding to the pandemic, the Administration has complete discretion in authorizing the program on an annual basis.

In mid-May, the Governor will unveil his “May Revise” to the proposed state budget for the fiscal year beginning July 1, 2020. While the Governor has already indicated the revision to the budget will not match the blueprint he laid out in January, it will be the first glimpse at how the Governor intends to address declining state revenues and unanticipated costs.

With state tax filings and revenues delayed through July 15, significant financial uncertainty will remain. Even though a state budget will be adopted prior to the July 1 start of the fiscal year, the Governor and Legislature are likely to continue state budget deliberations and actions beyond this date.

Through all of these state budget deliberations, ACSS will continue to advocate for equitable salaries and benefits for excluded employees with CalHR and to lobby the Legislature to protect your employment interests.


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CalHR Increases Commute Reimbursement for ALL Excluded Employees; ACSS Advocacy on Salaries Continues

Posted: 2/20/2020 Tags: benefits legislation policy representation salary Tags Views: 1430

CalHR has announced the reimbursement amount for transit passes and vanpools will increase by $35 per month for all supervisors, managers, and confidential employees. Effective February 1, 2020, excluded employees will be eligible for 75% reimbursement for public transit passes, up to $100 per month. Vanpool riders will be reimbursed 75% of the monthly fee, up to $100 per month, and vanpool drivers will receive $135 per month.

When SEIU Local 1000 representing rank-and-file bargaining units negotiated an increase in commute reimbursement amounts, ACSS immediately proposed that CalHR extend the increases to all excluded employees. After several meetings with CalHR where this topic was discussed, we are pleased that CalHR has adopted ACSS’ proposal and extended the increased commute reimbursement amounts to all excluded employees, regardless of bargaining unit affiliation.

What’s Next for the Remainder of the 2019-2020 Fiscal Year?
CalHR is expected to implement adjustments to bilingual pay, recruitment & retention for the Correctional Case Records series, and an increase in the call center differential. ACSS has met with CalHR and requested these same increases for excluded employees. CalHR will soon implement salary adjustments for Bargaining Unit 18. ACSS has requested CalHR provide at least the same salary increases for supervisors, managers and confidential employees, in addition to correcting standing salary inequities and compaction issues.

What About July 1, 2020 Increases?
Sixteen of the state’s 21 bargaining units are scheduled for salary increases July 1, 2020. The other five will be in negotiations this spring to adjust salaries. In addition to continued advocacy with CalHR for salary increases and corrections to salary inequities, ACSS is working to ensure the state budget contains funding for salary and benefit increases for excluded employees. While the state budget remains subject to the May Revise and legislative approval, at this point we are optimistic that the budget will adequately fund general salary increases and many special salary adjustments for excluded employees.


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2020-21 State Budget: Governor Aims to Eliminate Debts, Pay Down Pension Liabilities and Grow Reserves

Posted: 1/24/2020 Tags: budget legislation policy politics salary Tags Views: 1246

On January 10, 2020, Governor Gavin Newsom released his proposed 2020-2021 State Budget that will fund the government for the 12-month period starting July 1, 2020.

Under the governor’s plan, state spending next year would total just over $222 billion, with $153 billion in general fund and $63.8 billion in special fund spending. Another $5.4 billion in state bond spending makes up the difference. This is about a 3.5% increase over current fiscal year spending.

In this Budget, as with last year’s, the majority of the surplus is devoted to one-time spending. This approach enables the state to make significant investments in critical areas without making commitments to ongoing spending in future years.

Here is the quick rundown on a few items that will specifically interest ACSS members:

State Employee Compensation
The budget proposal includes $1.5 billion ($654 million general fund) in new funding for increased employee compensation, higher health care costs for active state employees, and the state’s contribution to prefund retiree health care costs for active employees. The budget summary notes the Administration will begin negotiations with 7 of the state’s 21 bargaining units, whose contracts expire in late June or early July 2020.

Building Budget Resiliency and Paying Down Unfunded Retirement Liabilities
In addition to the state’s required contributions, the Budget proposes to accelerate the payment of the remaining $500 million currently scheduled over fiscal years 2020-21 through 2022-23 into a single payment in 2020-21.

State Health Care/Retiree Health Care
Through the collective bargaining process, the state’s 21 employee bargaining units and related supervisors and managers now prefund retiree health benefits. As a result, $2.6 billion is currently set aside in the prefunding trust fund to pay for future retiree health benefits. A small but important step in paying for what is an estimated $85.6 billion in unfunded health care liability.

State Employee Position Increases
The budget projects the hiring of an additional 3,187 state employee positions in 2020-21 for a total of 219,017.

The Governor’s complete budget summary and draft budget can be found here: http://www.ebudget.ca.gov

As the proposed state budget progresses, ACSS will continue to meet with CalHR to advocate for inclusion of funding for supervisory and managerial compensation salary increases. ACSS will also be meeting-and-conferring with the state over realignments impacting ACSS members including the workforce programs moving into the new Department of Better Jobs and Higher Wages and the Juvenile Justice reorganization into the new Department of Youth and Community Restoration.

As we delve into more of the proposed budget details, we will report on any new positions and increased funding proposals for departments outlined in the full budget or if there are other proposals that impact ACSS and its members. Please let us know if you have any questions.

Click here to read the full version of the ACSS State Budget Report as presented by our ACSS Legislative Advocate, Ted Toppin at the January 18th, 2020, ACSS Board Meeting.


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CalHR releases Pay Letter Covering Supervisors and Managers Related to Bargaining Unit 7

Posted: 12/5/2019 Tags: legislation policy salary Tags Views: 2309

The Department of Human Resources (CalHR) has issued Pay Letter 19-19 adjusting salaries for supervisory and managerial employees related to Bargaining Unit 7. All S07 and M07 employees will receive a General Salary Increase of 2.75% retroactive to July 1, 2019.

The Pay Letter also provides Special Salary Adjustments retroactive to July 1, 2019 for nearly one hundred different supervisory and managerial classifications related to Unit 7. Upon initial review, most of the special salary adjustments are the same or higher than those received by the related rank-and-file employees. A number of the special salary adjustments are much higher than the salary increases for the rank-and-file. We encourage all S07 and M07 members to review the attached Pay Letter 19-19 to determine whether you and your classification will receive a special salary adjustment. Note that the special salary adjustments for supervisors and managers begin on page 7 of the pay letter. The “SSA” percentage is the salary adjustment above and beyond the general salary increase of 2.75%.

Because of ACSS' tireless efforts on behalf of members concerns, CalHR and the Newsom Administration appear to have extended nearly all of the special salary adjustments to supervisory and managerial employees, and in some instances provided even larger salary increases to supervisors and managers. This is a big win for ACSS members and other excluded employees.

CalHR expects to issue pay letters covering state bargaining units 2 and 13 and related excluded employees on December 9. The goal is for the State Controller’s Office to implement these salary increases with the December 31, 2019 pay warrant with retroactive back pay to follow in early 2020.

CalHR has not indicated to ACSS when it will implement the new and revised pay differentials (e.g., bilingual pay, commute reimbursement) for the 9 SEIU Local 1000 units and how these increases will impact related excluded employees.

As always, ACSS will continue to provide you with updates as we receive them in regards to compensation for excluded employees.


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Retroactive Salary Increases for Supervisors and Managers Related to Units 2, 7 and 13

Posted: 11/19/2019 Tags: legislation policy representation salary Tags Views: 2273

The Department of Human Resources (CalHR) has provided confirmation to ACSS of salary increases for state excluded employees related to bargaining units 2, 7, and 13. Effective July 1, 2019, excluded employees related to Bargaining Units 2 and 7 will receive General Salary Increases of 2.75%.

  • Excluded employees related to Bargaining Unit 13 will see their maximum salary ranges increase by 2.75% also effective July 1, 2019. This means those at the old maximum salary for 12 pay periods will see an immediate retroactive increase.
  • Excluded employees related to Bargaining Unit 2 enrolled as a subscriber in a state sponsored health plan will receive a $260 taxable cash benefit/health stipend retroactive to July 1, 2019 through the June 2020 pay period.
  • As part of the BU 7 Labor Agreement, employees in specific classifications will receive Special Salary Adjustments retroactive to July 1, 2019. CalHR has confirmed that excluded employees tied to those classifications “may also be eligible for Special Salary Adjustments retroactive to July 1, 2019” and that details of impacted classifications and percentages will be outlined in a forthcoming Pay Letter.

Many of the recently approved labor contracts (including the 9 SEIU Local 1000 units) include new and revised pay differentials that may affect related excluded employees. Specific details of how these changes will affect related excluded employees will also be included in the forthcoming Pay Letter. ACSS has requested that CalHR make all increases applicable to excluded employees.

CalHR is currently developing the Excluded Compensation package for Fiscal Year 2020 – 21. Items of compensation including general and special salary adjustments and the $260 month cash benefit for healthcare for employees in the 9 SEIU Local 1000 bargaining units (1, 3, 4, 11, 13, 15, 17, 20, and 21) are effective July 1, 2020. ACSS has requested at least the same increases as rank-and-file employees. CalHR says it will announce the excluded compensation package upon approval of the Budget Act of 2020.

ACSS continues to discuss the compensation of excluded employees related to Bargaining Unit 18 with CalHR. The announcements of salary adjustments do not indicate any adjustments to employees related to Unit 18, but ACSS will continue to ask CalHR to make appropriate salary adjustments for these supervisory and managerial employees, even if the rank-and-file is unable to reach a new labor contract.

When the official Pay Letters are released instructing the State Controller’s Office to adjust salaries, we will provide details of the adjustments including the expected timing of pay adjustments and retroactive pay warrants.


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ACSS and CalHR Discuss Pay Equity and Other Issues that Affect Excluded Employees

Posted: 10/10/2019 Tags: benefits legislation policy representation salary Tags Views: 2704

On October 8, 2019, ACSS met with CalHR Director Eraina Ortega to continue discussions regarding the Newsom Administration’s approach to salary and benefits improvement for the State’s excluded employees. Director Ortega and her Labor Relations staff, led by Deputy Director and Chief of Labor Relations Paul Starkey, met with ACSS President Todd D’Braunstein, ACSS Executive Director Rocco Paternoster and key staff, along with ACSS Legislative Advocate Ted Toppin.

President D’Braunstein thanked CalHR for recently implementing Family Care Leave and new Emergency Pay rules for excluded employees – two long standing ACSS priorities. He also thanked Director Ortega for the new process allowing ACSS to submit excluded employee salary and benefit proposals related to bargaining units at the same time CalHR is negotiating with those bargaining units.

In our continued efforts to aggressively advocate for solutions to solve compaction, ACSS noted progress made in addressing salary compaction, but many excluded employee classifications remain within 5 percent of subordinate classes. Director Ortega confirmed salary setting for excluded employees will be more flexible in the future and CalHR will not be as constrained by a practice of limiting salary differentials to 5 percent.

ACSS reiterated previously submitted proposals for pay and benefit equity with rank-and-file units and proposals to correct salary inequities. ACSS discussed the need to restore vertical salary relationships between classifications and explore other incentives to promote to excluded classifications.

Chief of Labor Relations Paul Starkey noted CalHR was in the process of realigning labor relations staff to more effectively respond to and address excluded employee issues raised by ACSS and affecting our members. Director Ortega and Mr. Starkey confirmed a commitment to working with ACSS now to review many of the long-standing compensation issues ACSS has identified. We anticipate scheduling interim meetings to discuss specific proposals with CalHR Labor Relations. CalHR has promised feedback and is evaluating improvements to the process for sharing salary and benefit related decisions with ACSS.

President D’Braunstein thanked Director Ortega and her staff for making excluded employee issues a priority and for committing to review and respond to issues and proposals made by ACSS. As always, ACSS will continue to keep members informed of issues that affect excluded employees as they arise.


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Legislature Passes Bill Approving MOUs, Appropriates Money for Increases for Related Excluded Employees

Posted: 9/13/2019 Tags: benefits legislation policy salary Tags Views: 5225

On September 12, 2019, the Legislature approved Assembly Bill 118 which includes funding for certain excluded employee salary adjustments. AB 118 approved labor contracts for 13 state rank-and-file bargaining units (1, 2, 3, 4, 5, 7, 11, 13, 14, 15, 17, 20, and 21). The bill, which contains budget appropriations to fund employee compensation increases for both rank-and-file employees and related excluded employees, now heads to Governor Newsom for his approval.

ACSS has requested CalHR provide at least the same salary and benefit increases to supervisors, managers and confidential employees in addition to correcting standing salary inequities and compaction issues. The expectation is that CalHR will adjust salaries for excluded employees related to bargaining units 2, 7 and 13 retroactively to July 1, 2019.

Most salary adjustments and other benefits for excluded employees related to the 9 SEIU Local 1000 bargaining units (1, 3, 4, 11, 13, 15, 17, 20, and 21) are effective July 1, 2020. The SEIU rank-and-file agreements call for a few increases to take effect this fiscal year: increase in bilingual pay, recruitment & retention for Correctional Case Records Analysts, increase in the call center differential, expanding the personnel and payroll geographic differential to include Alameda County, and an increase in the commute reimbursement from $65 per month to $100 per month. Other employee compensation adjustments – general salary increases, special salary adjustments and the new provision to provide $260 per month to those enrolled in a CalPERS health plan – are scheduled to take effect July 1, 2020. ACSS has asked CalHR to provide excluded employees with at least these same increases in addition to resolving identified salary compaction issues by raising excluded employee salaries.

Following Governor Newsom’s signature on AB 118, CalHR will issue a “Pay Letter” as the official instruction to the State Controller’s Office to adjust salaries. ACSS will publicize the pay letter and its impact as soon as it is released. ACSS is next scheduled to meet with CalHR in early October and will keep all members apprised of progress made on addressing salary compaction and improving excluded employee salaries and benefits.


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