BILL ANALYSIS Ó
AB 1627
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CONCURRENCE IN SENATE AMENDMENTS
AB
1627 (Committee on Budget)
As Amended August 11, 2016
Majority vote. Budget Bill Appropriation Takes Effect
Immediately
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|ASSEMBLY: |51-26 |(April 28, |SENATE: |32-4 |(August 22, |
| | |2016) | | |2016) |
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Original Committee Reference: BUDGET
SUMMARY: Makes necessary statutory and technical changes to
implement the Budget Act of 2016 related to Civil Service
improvement provisions.
The Senate amendments delete the Assembly version of this bill,
and instead:
1)Provide legislative ratification of the memoranda of
understanding (MOU) agreed to by the state and bargaining unit
(BU) 7, Protective Services and Public Safety, represented
exclusively by California Statewide Law Enforcement
Association (CSLEA).
EXISTING LAW: Establishes the Ralph C. Dills Act, which
requires the state to collectively bargain with the exclusive
representatives of employee groups (i.e. bargaining units)
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regarding wages and working conditions, and to define negotiated
agreements in MOUs.
1)Establishes the California Department of Human Resources
(CalHR) as the official representative of the Governor in all
matters related to collective bargaining with state employees.
2)Requires that any MOU between the state and an exclusive
representative must be ratified by the Legislature.
3)Establishes the California Public Employees' Retirement System
(CalPERS), which administers health and retirement benefits
for state employees.
4)Requires the Legislative Analyst's Office (LAO) to analyze all
state MOUs and to provide analyses of an MOU and its fiscal
impact to the Legislature within 10 days of receipt of an MOU
from CalHR.
5)Provides that fully vested state retirees (e.g., with 20 or
more years of state employment) are entitled to an employer
contribution for retiree health care equal to 100% of the
weighted average premium of the four health plans most highly
utilized by all members. Dependents are eligible for a
contribution based on 90% of the average additional premiums
paid for dependents during the benefit year in which the
formula is applied. This is referred to as the 100/90
formula.
6)Requires that Medicare-eligible retirees enroll in Medicare
and choose a Medicare-coordinated health plan. Since these
plans may be cheaper than non-Medicare (or "Basic" plans),
thus resulting in some portion of the employer contribution
going unused, current law requires that any unused portion of
the 100/90 formula contributions may be applied to reimburse
retirees for the costs of Medicare Part B premiums. These
reimbursements are made in the form of an additional payment
to the retiree on the retirement warrant up to the cost of the
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Part B premium. Whether or not a retiree receives the
Medicare Part B reimbursement in full or in part depends upon
the cost of that retiree's health plan.
7)Provides that most state employees (those hired after 1985 or
1989, depending on class) must work for 10 years to receive
50% of the 100/90 formula, with an additional 5% per year of
service until, after 20 years, they are vested to receive 100%
of the 100/90 formula. Individuals hired prior to 1985 or 1989
could be subject to either five year or 10 year vesting for
full coverage of the 100/90 formula.
8)Provides that retirees who were covered in certain bargaining
units while actively employed will receive an employer retiree
health contribution based on the 80/80 formula (i.e., 80% of
the weighted average premium of the four health plans most
highly utilized by all members).
9)Provides that the employer contribution for active state
employee health care shall be determined through collective
bargaining.
FISCAL EFFECT: Appropriates $38.6 million for State BU 7 for
expenditure in 2016-17, in augmentation of the funds
appropriated under the Employee Compensation items of the 2016
Budget Act.
COMMENTS: The following information summarizing the general
provisions of the MOU was provided by CalHR:
Number of Employees: The BU 7 agreement affects approximately
7,204 full-time equivalents.
HEALTH BENEFITS
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1)Employer Contribution for Active State Employees
a) The state's monthly health consolidated benefit
contribution for each employee shall continue to be a flat
dollar amount equal to 80% of the weighted average of the
basic health benefit plan premiums of the four largest
enrolled basic health plans. For each employee with
enrolled family members, the employer shall continue to
contribute an additional flat dollar amount equal to 80% of
the weighted average of the additional premiums. The flat
dollar amounts shall be increased as appropriate pursuant
to the formulas on January 1, 2017, January 1, 2018, and
January 1, 2019.
2)Employer Contribution for Future Retirees
a) Employees first hired on or after January 1, 2017, will
receive an employer contribution for retiree health
benefits based on an "80/80" formula. Retirees and their
dependents enrolled in a basic health benefit plan will
receive an employer contribution equal to 80% of the
weighted average premium of the four largest basic health
benefit plans based on state active employee enrollment.
Retirees and their dependents enrolled in a Medicare health
benefit plan will receive an employer contribution equal to
80% of the weighted average premium of the four largest
Medicare health benefit plans based on state retiree
enrollment.
3)Prefunding of Other Post-Employment Benefits
a) The state and BU 7 members will prefund retiree
healthcare with the goal of reaching 50% cost sharing of
actuarially determined total normal cost for employer and
employees by July 1, 2019. The state and employees will
each make the following contributions:
i) Effective July 1, 2017, 1.3% for a total of 1.9% of
pensionable compensation.
ii) Effective July 1, 2018, an additional 1.4% for a
total of 2.7% of pensionable compensation.
iii) Effective July 1, 2019, an additional 1.3% for a
total of 4.0% of pensionable compensation.
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4)Post-Employment Health and Dental Benefit Vesting Schedule
a) All employees first employed by the state on or after
January 1, 2017, will be subject to an extended vesting
schedule providing 50% of the employer contribution upon
completion of 15 years of state service, increasing 5% for
each additional year of service, until the employee is 100%
vested at 25 years of state service.
5)Medicare Part B Supplemental Benefit
a) All employees first hired on or after January 1, 2017,
will no longer be eligible to use the employer contribution
for retiree health benefits for Medicare Part B premiums.
COMPENSATION
1)General Salary Increase (GSI)
a) Effective July 1, 2016, BU 7 employees shall receive a
3% GSI.
b) Effective July 1, 2017, BU 7 employees shall receive a
3% GSI.
c) Effective July 1, 2018, BU 7 employees shall receive a
2% GSI.
2)Special Salary Adjustments
a) Effective July 1, 2016 BU 7 employees in the Public
Safety Dispatcher, Public Safety Operator, and
Communications Operator classifications shall receive a
special salary adjustment of 5%.
b) Effective July 1, 2016, BU 7 employees in the Motor
Carrier Specialist I classifications shall receive a
special salary adjustment of 3%.
c) Effective July 1, 2016, BU 7 employees in the State Park
Peace Officer (Ranger and Lifeguard) classifications shall
receive a special salary adjustment of 5%.
d) Effective July 1, 2016, BU 7 employees in specified
investigator classifications shall receive a special salary
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adjustment of 5%.
e) Effective July 1, 2016, BU 7 employees in the Agent,
Alcoholic Beverage Control classification shall receive a
special salary adjustment.
f) Effective July 1, 2016, BU 7 employees in the
Coordinator (Fire and Rescue Services, and Law Enforcement)
classifications shall receive a special salary adjustment.
3)Longevity Peace Officer Pay Differential
a) Effective the first day of the pay period following
ratification, each step of the Longevity Pay Differential
for peace officers shall be increased by 1%.
4)Education Incentive Pay
a) Effective the first day of the pay period following
ratification, the monthly education incentive pay shall
increase from $50 to $75 for an Associate of Arts or
Associate of Science Degree and from $100 to $125 for a
Bachelor of Arts or Bachelor of Science Degree.
5)Uniform Allowance
a) Effective the first day of the pay period following
ratification, the uniform replacement allowance shall be
increased as follows:
i) From $640 to $950 for full-time employees in
specified classifications;
ii) From $540 to $640 for less than full-time employees
in specified classifications;
iii) From $20 to $55 for specified Lifeguards;
iv) From $385 to $950 for Oil Spill Prevention
Specialist;
v) From $450 to $950 for Communications Operators
employed at the Department of Forestry and Fire
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Protection.
b) Effective the first day of the pay period following
ratification, specified employees shall receive a uniform
maintenance and cleaning allowance of $25 per month.
c) Effective the first day of the pay period following
ratification, employees in the Motor Carrier Specialist I
and School Pupil Transportation Safety Coordinator
classifications shall receive an annual boot reimbursement
of $150.
MISCELLANEOUS
1)The maximum amount of leave that can be deducted from each
employee for the Union Release Time Bank shall increase from
1.5 hours to 2 hours.
2)Effective May 1, 2017, and depending on the availability of
department funds, the amount of leave that can be cashed out
each year shall increase from 20 hours to 80 hours.
3)Incorporates the Wounded Warriors Transitional Leave Act,
which provides up to 96 hours of additional sick leave for
employees hired after January 1, 2016, who is a military
veteran with a service connected disability rated 30%.
4)Allows an employee to transfer up to three months of leave
credits to a family member under certain conditions.
5)Removes the requirement that a new employee must work two
years before receiving the full employer health contribution.
6)Effective the first day of the pay period following
ratification, the lodging reimbursement rates shall increase
from $125 to $140 for Alameda, San Mateo, and Santa Clara
Counties and from $150 to $250 for San Francisco.
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7)Effective the first day of the pay period following
ratification, the Overtime Meal Allowance shall increase from
$7.50 to $8.00.
8)Requires the state to provide specified items of protective
equipment based on an employee's classification and place of
employment.
9)Effective the first day of the pay period following
ratification, physical fitness pay shall be included in
regular base pay.
10)Extends the amount of time between voluntary transfers from
12 months to 24 months for Special Agents and Special Agent
Supervisors at the Department of Justice.
11)Requires Special Agents and Special Agent Supervisors at the
Department of Justice who reinstate or are hired from a
reemployment list to work 24 months before requesting a
voluntary transfer.
DURATION
July 1, 2015 through July 1, 2019.
Analysis Prepared by:
Genevieve Morelos / BUDGET / (916) 319-2099 FN:
0004850
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