BILL ANALYSIS ------------------------------------------------------------ |SENATE RULES COMMITTEE | AB 1625| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ THIRD READING Bill No: AB 1625 Author: John A. Perez (D) Amended: 10/7/10 in Senate Vote: 27 Urgency PRIOR VOTE NOT RELEVANT SUBJECT : State employees: Memorandum of Understanding SOURCE : Author DIGEST : This bill provides legislative ratification for a Memorandum of Understanding between the Administration and the numerous bargaining units represented by the Service Employees International Union, Local 1000. Senate Floor Amendments of 10/7/10 delete the prior version of the bill expressing the intent of the Legislature to enact statutory changes relating to the Budget Act of 2010 and replace it with the current content regarding ratification of a Memorandum of Understanding. ANALYSIS : This bill provides legislative ratification for a Memorandum of Understanding (MOU) between the Administration and the following state bargaining units (BUs) represented by the Service Employees International Union (SEIU), Local 1000: BU 1 (Professional, Administrative, Financial and Staff Services) CONTINUED AB 1625 Page 2 BU 3 (Professional Educators and Librarians) BU 4 (Office and Allied) BU 11 (Engineering and Scientific Technicians) BU 14 (Printing and Allied Trades) BU 15 (Allied Services) BU 17 (Registered Nurses) BU 20 (Medical and Social Services) BU 21 (Educational Consultant and Library) Number of employees: approximately 95,000 full-time equivalents Existing Law 1.Establishes the Ralph C. Dills Act, which requires the State to collectively bargain with official representatives of employee groups (i.e., bargaining units) regarding wages and working conditions, and to define negotiated agreements in a MOU. 2.Requires that any MOU between the State and an official representative must be ratified by the Legislature. 3.Establishes the Public Employees Retirement Law, which provides health and retirement benefits for state employees. 4.Establishes five separate retirement classes for state employees: State Miscellaneous and Industrial (which receive substantially the same benefits), State Safety, State Peace Officer/Firefighter, and State Patrol. 5.Specifies that if the provisions of certain statutes are in conflict with a MOU, the terms of the MOU shall prevail. Specifically, this bill: 1. Retirement A. Benefit Formula Calculation ( 1) Effective the pay period following ratification by both parties, BU 1, 3, 4, 11, 14, AB 1625 Page 3 15, 17, 20 and 21 Miscellaneous and Industrial First Tier retirement members, first employed by the state, will be subject to the "New 2010 First Tier Retirement Formula" of 2% at age 60 (from current 2% at 55). (2) Effective the pay period following ratification by both parties, BU 1, 3, 4, 11, 14, 15, 17, 20 and 21 State Safety retirement members, first employed by the state, will be subject to the "New 2010 First Tier Retirement Formula" of 2% at age 55 (from current 2.5% at 55). B. Employee Contribution Formula (1) Effective the pay period following ratification by both parties, current BU 1, 3, 4, 11, 14, 15, 17, 20 and 21 Miscellaneous and Industrial members of the First Tier retirement category shall have their contribution increased from 5% to 8% of monthly compensation over $513. (2) Effective the pay period following ratification by both parties, current BU 1, 3, 4, 11, 14, 15, 17, 20 and 21 State Safety retirement members shall have their contributions increased from 6% to 9% of monthly compensation over $317. 2. Compensation A. Adjusted Pay Ranges ( 1) Effective July 1, 2013, all BU 1, 3, 4, 11, 14, 15, 17, 20 and 21 represented classifications (excluding Seasonal Clerks and BU 3 classifications in the California Department of Corrections and Rehabilitation (CDCR) who work on an academic calendar) shall be adjusted by increasing the maximum step of the pay range by 3%. This only applies to BU 1, 3, 4, 11, 14, 15, 17, 20 and 21 employees who reach the top step of the pay range. (2) Effective July 1, 2013, all BU 3 represented AB 1625 Page 4 classification in CDCR who work an academic calendar shall receive a 3% salary differential. This only applies to BU 3 employees in CDCR who work an academic calendar who reach step 6 or higher of the pay range. (3) Effective July 1, 2013, the Seasonal Clerk classification shall have 50 cents added to each salary rate. B. Personal Leave Program (PLP 2010) (1) Effective the pay period following ratification by both parties, the Personal Leave Program (PLP 2010) will apply to BU 1, 3, 4, 11, 14, 15, 17, 20 and 21 employees. This program shall remain in effect for 12 months. 3. Health Benefits A. Employer Contribution (1) Effective the pay period following ratification by both parties, the State's monthly contribution to the health insurance portion of the BU 1, 4, 11, 14, 15, 17, 20 and 21 employee's allowance shall be an amount equal to 80 percent of the weighted average of the premiums for the four Basic health benefit plans with the largest enrollment (the 80/80 formula). (2) Effective the pay period following ratification by both parties, the State's monthly contribution to the health insurance portion of BU 3 employee's allowance will be set at a dollar amount that equals the 80/80 formula. The amounts shall be increased pursuant to the formulas on January 1, 2011, January 1, 2012, and January 1, 2013. 4. Miscellaneous A. The State will not implement a new furlough program for BU 1, 3, 4, 11, 14, 15, 17, 20 and 21 AB 1625 Page 5 employees during the 12 full months following ratification by both parties. B. The State and SEIU Local 1000 agree to present to the Legislature, as part of the legislation implementing the MOU, a provision to appropriate funds to cover the economic terms of this agreement through July 1, 2013. C. The State and SEIU Local 1000 agree to delete Lincoln's Birthday and Columbus Day as recognized holidays. D. Employees that work on January 1st, the last Monday in May, July 4th, the first Monday in September, Thanksgiving Day or Christmas shall receive one and one-half times the employee's regular rate of pay and up to eight hours of holiday credit for all hours worked on the holiday. E. This bill increases the employee contribution to their retirement for excluded and exempt employees. 5. Duration July 1, 2010, through July l1, 2013. FISCAL EFFECT : Appropriation: Yes Fiscal Com.: Yes Local: No CPM:cm 10/7/10 Senate Floor Analyses SUPPORT/OPPOSITION: NONE RECEIVED **** END ****