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Legislative News

ACSS Seeks to Mitigate Impact of Employee Compensation Reduction Proposals

Posted: 5/22/2020 Tags: benefits COVID-19 legislation policy representation salary Tags Views: 2559

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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CA Budget Deficit a Direct Result of Coronavirus Pandemic

Posted: 5/18/2020 Tags: budget COVID-19 salary Tags Views: 564

Governor Gavin Newsom appeared on “State of the Union”, a televised CNN program, on Sunday to discuss the COVID-19 Pandemic and the effect on the California economy. During the interview, Governor Newsom said that “the nearly $54 billion budget deficit the state is facing is a direct result of the impact from the coronavirus pandemic and not because of existing financial troubles.”

In January, Newsom projected a surplus after paying off 100% of inherited debts and pay down long-term financial obligations. However, last week Newsom revealed a revised budget deficit of $54 billion, affecting state worker’s salaries and many other state-funded programs.

Newsom, along with other western states, has asked Congress to send more financial aid to state governments. “We are not looking for charity. … It is incumbent upon the federal government to help support these states through difficult times.

Click here to read the full CNN article.


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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: 7627

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

Posted: 5/1/2020 Tags: COVID-19 legislation policy Tags Views: 757

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: 1438

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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