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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