BILL ANALYSIS
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|SENATE RULES COMMITTEE | AB 88|
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THIRD READING
Bill No: AB 88
Author: Assm. Public Employees, Retirement and Social
Security Cmte.
Amended: 9/4/09 in Senate
Vote: 27 - Urgency
SENATE PUBLIC EMP. & RET. COMMITTEE : 5-2, 8/24/09
AYES: Correa, Ducheny, Liu, Padilla, Wiggins
NOES: Ashburn, Benoit
ASSEMBLY FLOOR : Not relevant
SUBJECT : State employees: memoranda of understanding
SOURCE : Service Employees International Union
DIGEST : This bill approves provisions that require the
expenditure of funds pursuant to memoranda of understanding
entered into between the state employer and State
Bargaining Units 1, 3, 4, 11, 14, 15, 17, 20, and 21, the
Service Employees International Union, Local 1000, and
provides that these provisions will become effective even
if these provisions are approved by the Legislature n
legislation other than the annual Budget Act. This bill
appropriates $856,500,000 from those funds for state
employee compensation in augmentation of the budget Act of
2009. This bill provides that provisions of the memoranda
of understanding approved by this bill provisions of the
memoranda of funds will not take effect unless funds for
these provisions are specifically appropriated by the
CONTINUED
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Legislature, and authorizes either party to reopen
negotiations on all or part of a memorandum of
understanding if the Legislature does not approve or fully
fund any provision of the memorandum of understanding that
requires the expenditure of funds.
ANALYSIS : Under existing law, a provision of a
memorandum of understanding reached between the state
employer and a recognized employee organization
representing state civil service employees that requires
the expenditure of funds does not become effective unless
approved by the Legislature in the annual Budget Act.
This bill:
1. Approves 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:
A. BU 1 (Professional, Administrative, Financial,
and Staff Services), 45,165 employees.
B. BU 3 (Professional Educators and Librarians),
2,368 employees.
C. BU 4 (Office and Allied), 29,198 employees.
D. BU 11 (Engineering and Scientific Technicians),
3,169 employees.
E. BU 14 (Printing and Allied Trades), 479
employees.
F. BU 15 (Allied Services), 4,632 employees.
G. BU 17 (Registered Nurses), 4,962 employees,
H. BU 20 (Medical and Social Services), 3,58.
I. BU 21 (Educational Consultant and Library), 585
employees.
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Background
1. Specific contract provisions
The following information regarding the MOUs was provided
by DPA:
Compensation: Mandatory Personal Furlough Leave Program
(PFLP) . Effective February 2009 through June 30, 2010, all
employees will be furloughed one day per month for 17
months. For most employees one day is equivalent to
eight-hours per month. This "self-directed" furlough
program will reduce take home pay by 4.62 percent.
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.
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.
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.
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
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units except Bargaining Unit 5 (CAHP).
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.
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
employment and 10 percent of current pay. An employee who
is offered a job placement and rejects it could be subject
to layoff.
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.
Business and Travel Expenses . The daily meal and
incidental rates will be increased from $40 to $55 per day
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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.
State-Owned Housing - Rental Rate Freeze . Currently,
departments may raise rents by up to 25 percent 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).
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 two personal holidays. Personal
holidays can be used at the employees' discretion.
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).
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.
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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.
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 percent) and 2007 (3.4 percent), and participated in
the personal leave program in 2003 and received five
percent 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.
FISCAL EFFECT : Appropriation: Yes Fiscal Com.: Yes
Local: No
This bill appropriates $856,500,000 to the current budget
year to cover the costs of the health care contribution.
SUPPORT : (Verified 8/24/09)
California International Employees Union (source)
California Labor Federation
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DLW:do 9/10/09 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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