BILL ANALYSIS
SENATE PUBLIC EMPLOYMENT & RETIREMENT BILL NO: AB 88
Lou Correa, Chair Hearing date: August 24, 2009
AB 88 (Asm. PER&SS Comm) as amended 8/20/09
FISCAL: YES
RATIFICATION OF MOU BETWEEN THE STATE AND THE STATE
BARGAINING UNITS REPRESENTED BY SEIU LOCAL 1000
HISTORY :
Sponsor: Service Employees International Union (SEIU),
Local 1000
Prior legislation: AB 694 (Assembly PER&SS Committee)
2009
Assembly Floor
ASSEMBLY VOTES :
Not applicable: New bill with August 20, 2009, amendments
SUMMARY :
Would approve the memoranda of understanding (MOU) agreed to
earlier this year to by the state and the following state
bargaining units (BUs) represented exclusively by the Service
Employees International Union (SEIU), Local 1000:
BU 1 (Professional, Administrative, Financial, and Staff
Services), 45,165 employees,
BU 3 (Professional Educators and Librarians), 2,368
employees,
BU 4 (Office and Allied), 29,198 employees,
BU 11 (Engineering and Scientific Technicians), 3,169
employees,
BU 14 (Printing and Allied Trades), 479 employees,
BU 15 (Allied Services), 4,632 employees,
BU 17 (Registered Nurses), 4,962 employees,
BU 20 (Medical and Social Services), 3,581 and
BU 21 (Educational Consultant and Library), 585 employees.
David Felderstein
Date: 8/20/09 Page 1
BACKGROUND AND ANALYSIS :
1) Existing SEERA law
Existing law requires, under the State Employee-Employer
Relations Act (SEERA, also known as the Dills Act), that
collective bargaining agreements (MOUs) that are negotiated
between the state and exclusive representatives of each of
the 21 state bargaining units be ratified by the Legislature.
2) This bill
This bill would provide the statutorily required legislative
approval of MOU agreed to earlier this year by the Governor
and the state employee bargaining units represented
exclusively by the Service Employees International Union
(SEIU), Local 1000.
3) Specific contract provisions
The following information regarding the MOUs was provided by
DPA :
A) Compensation: Mandatory Personal Furlough Leave Program
(PFLP)
Effective February 2009 through June 30, 2010, all employees
will be furloughed 1 day per month for 17 months. For most
employees 1 day is equivalent to 8 hours per month. This
"self-directed" furlough program will reduce take home pay by
4.62%.
Employees will be given personal discretion to use PFLP time
in cooperation with their managers. Employees receive no
cash value for leave credits accrued under the PFLP and must
use accrued PFLP time by July 1, 2012. Unused PFLP time
cannot be carried over beyond that date.
(For a discussion of the difference between the MOU and the
Governor's Executive orders requiring three furlough days a
month for these employees, please see COMMENTS #1 on Pages 5
and 6 below on this analysis. )
David Felderstein
Date: 8/20/09 Page 2
B) Compensation: Seasonal Clerks
There shall be no general salary increases during the term of
the MOU with the exception of Seasonal Clerks. Effective
April 1, 2009, the hourly pay rate for the Seasonal Clerk
Classification will increase $0.50 per hour.
C) Overtime
The tentative agreement, dated February 13, 2009, exempts
sick leave from being counted in the computation for
overtime. In addition, the contract also explicitly states
that should the Legislature enact any provision allowing the
State to exclude leave from the computation of overtime, that
provision, to the extent that it be in conflict with the MOU,
would be controlling over and immediately supersede the
provisions of the MOU without further action.
D) Contract Protection
If the State enters into agreements with other bargaining
units and those agreements provide greater economic packages
than provided in SEIU's agreement, then SEIU may reopen
related provisions of its own MOU and the State must meet and
confer with SEIU over similar or equivalent provisions for
SEIU. This only applies to agreements with bargaining units
that do not have current MOUs, which would include all other
bargaining units except Bargaining Unit 5 (CAHP).
E) Voluntary Personal Leave Program (VPLP )
The State shall provide employees currently participating in
the VPLP a 60 day window period to opt-out and/or modify
their VPLP participation.
F) No Layoff
From February 1, 2009 through June 30, 2010, the PFLP period,
layoffs will be limited to departmental closures of programs,
facilities or offices. This provision sunsets June 30, 2010.
Employees may be required to accept jobs in other
departments. They will be assured of retaining their state
employment in positions that are within 50 miles of current
David Felderstein
Date: 8/20/09 Page 3
employment and 10 percent of current pay. An employee who is
offered a job placement and rejects it could be subject to
layoff.
G) Health Benefits: Employer Contribution
Employees in BU 3 will receive health benefits under the
State's "80-80" formula beginning the February 2009 pay
period. Under this formula, the employer contribution for
single-party coverage is 80 percent of that year's weighted
average premium of the four plans with the highest employee
enrollment; 80 percent for dependent coverage. This benefit
is currently provided to the other 8 bargaining units
represented by SEIU.
For the purpose of mitigating the fiscal effects of the
furlough during the term of this agreement, employees
enrolled in one of three health care plans on January 1, 2009
(Blue Shield Access+, Blue Shield Net Value, and Kaiser HMO)
will receive an additional premium contribution amount to
compensate for small increases to the employees' share of the
Health Benefit premiums. Amounts are $13.78 (single), $29.96
(2-party), and $43.72 (family).
On and after January 1, 2010, a similar increase for
employees enrolled on that date will be paid if there are
premium increases in 2010.
David Felderstein
Date: 8/20/09 Page 4
H) Business and Travel Expenses
The daily meal and incidental rates will be increased from
$40 to $55 per day while employees travel for the State.
This is the average meal reimbursement rate in California for
federal employees. The last increase in meal reimbursement
rates for state employees occurred in 1999.
The cost estimate of savings for this contract does not take
into account the increased per diem rates. That is because
the increase will be absorbed by departments in their current
budgets. If travel budgets remain flat or are reduced,
departments may have to reduce employee travel
proportionally.
The contract states the current practice of providing
reimbursement for the cost of up to two checked bags when
flying. Employees are already being reimbursed for this
cost, but the contract makes the two-bag limitation clear.
I) State-Owned Housing - Rental Rate Freeze
Currently, departments may raise rents by up to 25% per year.
The contract requires that rent in state-owned housing shall
remain unchanged during the furlough period (from February 1,
2009 - June 30, 2010).
J) Holidays
Effective March 1, 2009, the February 12 and Columbus Day
holidays will be eliminated. (Elimination of the two holidays
for all state employees was also codified in SBX3 8).
Employees shall receive 2 personal holidays. Personal
holidays can be used at the employees' discretion.
K) State Disability Insurance (SDI)
Current state employees not covered by the SDI program who
transfer into a SEIU Bargaining Unit shall maintain NDI
(Non-industrial Disability Insurance) coverage for 6 months
(waiting period for SDI eligibility).
David Felderstein
Date: 8/20/09 Page 5
L) The Institute for Quality Public Services (Joint Labor
Management Trust)
The State shall set aside one million dollars for the
establishment of a continuing education and professional
development institute. This money will be made available on
July 1, 2009 after development of trust documents meeting all
state and federal requirements.
M) Duration
SEIU's prior contract expired on June 30, 2008. This new
agreement is effective from July 1, 2008 through June 30,
2010. The economic provisions become effective during the
February 2009 pay period upon approval by the Legislature
unless otherwise stated in the agreement. SEIU's membership
ratified the agreement in a vote taken on March 19th and
20th.
N) Impact on Compensation for Related Excluded and Exempt
Related excluded and exempt employees shall be subject to the
1 day per month self-directed furlough and related decrease
in take home pay, effective February 1, 2009. They will
receive the increased meal and incidental reimbursement rate.
Excluded and exempt employees will not receive the health
care contribution increase.
Related excluded and exempt classes include employees in the
Legislative Counsel Bureau (LBC) and the Bureau of State
Audits (BSA). These bureaus' employees are civil service and
work in classifications identical or similar to those
represented by SEIU. They traditionally receive compensation
increases when they are bargained for SEIU employees. For
example, they received pay increases in 2006 (3.5%) and 2007
(3.4%), and participated in the personal leave program in
2003 and received 5% pay increases at the end of that program
in 2004. Upon legislative approval of the MOU, DPA will
include LCB and BSA related excluded and exempt positions in
these provisions as well.
David Felderstein
Date: 8/20/09 Page 6
FISCAL EFFECT :
This bill appropriates $9.5 million ($4.4 million General
Fund and $5.1 million Other Funds) to the current budget year
to cover the costs of the health care contribution.
COMMENTS :
1) This MOU calls for one furlough day a month, while the
Governor's Executive Orders call for three furlough days a
month; which is controlling?
The committee is advised by the sponsor (SEIU Local 1000)
that:
a) the ratification of this MOU would have no impact on
the Governor's authority to issue executive orders that are
consistent with the Dills Act,
b) the ratification of this MOU is not intended to make
any declaration concerning the Governor's legal authority
to issue Executive Orders regarding furloughs, and
c) matters regarding the Governor's authority in the
furlough issue will ultimately be addressed by the court
system.
David Felderstein
Date: 8/20/09 Page 7
According to a February 17, 2009, letter from David A. Gilb,
Director of the Department of Personnel Administration (DPA):
"This letter confirms that in signing the tentative
agreement on February 13, 2010, with SEIU Local 1000, the
State did not waive nor abridge its ability to take all
action necessary to address fiscal or other emergencies,
and waives none of its legal rights or remedies in this
regard.
For example, if there is a significant decrease in revenues
which causes the Governor to proclaim a fiscal emergency
under Proposition 58, resulting from either the failure of
the Lottery Modernization Act to be approved by the voters
or further deterioration of the economy, the Governor
retains the authority to implement additional furloughs
beyond those recognized in this MOU in accordance with
Government Code section 3516.5.
"This further confirms that the State does not waive its
litigation position in any existing or future litigation
concerning the Governor's ability to take action in case of
any emergency, including fiscal emergency."
2) SUPPORT :
California Labor Federation (CLF)
3) OPPOSITION :
None to date
David Felderstein
Date: 8/20/09 Page 8
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David Felderstein
Date: 8/20/09 Page 9