BILL ANALYSIS Ó
-----------------------------------------------------------------
|SENATE RULES COMMITTEE | SB 848|
|Office of Senate Floor Analyses | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
-----------------------------------------------------------------
UNFINISHED BUSINESS
Bill No: SB 848
Author: Committee on Budget and Fiscal Review
Amended: 6/12/16
Vote: 21
SENATE FLOOR: Not relevant
ASSEMBLY FLOOR: Not available
SUBJECT: State employment
SOURCE: Author
DIGEST: This bill makes necessary statutory and technical
changes to the labor-related provisions of the Budget Act of
2016. Additionally, provides legislative ratification for the
memoranda of understanding (MOU) agreed to by the state and
bargaining unit (BU) 12 represented exclusively by the
International Union of Operating Engineers.
Assembly Amendments delete the Senate version of the bill and
insert the current language.
ANALYSIS:
BU 12 MOU - The following information summarizes the general
provisions of the MOU:
Number of Employees: The BU 12 agreement affects approximately
10,778 full-time equivalents, and includes the following
agreements:
Health Benefits
SB 848
Page 2
1) Employer Contribution for Active State Employees. Effective
the pay period following ratification, the state's monthly
health benefit contribution for each employee shall continue
to be a flat dollar amount equal to 80 percent 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 percent 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. 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 percent 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 percent 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. The state and
BU 12 members will prefund retiree healthcare with the goal
of reaching 50 percent 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:
a) Effective July 1, 2017, 1.4 percent for a total of 1.9
percent of pensionable compensation.
b) Effective July 1, 2018, an additional 1.4 percent for
a total of 3.3 percent of pensionable compensation.
c) Effective July 1, 2019, an additional 1.3 percent for
SB 848
Page 3
a total of 4.06 percent of pensionable compensation.
4) Post-Employment Health and Dental Benefit Vesting Schedule.
All employees first employed by the state on or after January
1, 2017, will be subject to an extended vesting schedule
providing 50 percent of the employer contribution upon
completion of 15 years of state service, increasing five
percent for each additional year of service, until the
employee is 100 percent vested at 25 years of state service.
5) Medicare Part B Supplemental Benefit. 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
6) General Salary Increase (GSI)
a) Effective July 1, 2016, BU 12 employees shall receive
a three percent GSI.
b) Effective July 1, 2017, all BU 12 employees shall
receive a four percent GSI.
c) Effective July 1, 2018, all BU 12 employees shall
receive a three percent GSI.
7) Special Salary Adjustments
a) Effective July 1, 2016 and 2017, BU 12 employees in
specified heavy equipment mechanic classifications shall
receive a special salary adjustment of five percent.
b) Effective July 1, 2016, BU 12 employees in specified
electrician classifications shall receive a special salary
adjustment of five percent.
SB 848
Page 4
c) Effective July 1, 2016, and 2017, BU 12 employees in
specified telecommunications technician classifications
shall receive a special salary adjustment of five percent.
8) Uniform Allowance
a) Increases the uniform reimbursement from $470 to $670
for full-time employees that work for the Department of
Parks and Recreation, or the Department of Forestry and
Fire Protection.
b) Provides an annual footwear allowance of $82 for
specified permanent full-time employees that work for the
Department of Corrections and Rehabilitation or the
California Highway Patrol.
Miscellaneous
9) Leave Cash Out, Additional Sick Leave, Overtime Meal
Allowance, Monthly Payroll Cycle
a) Increases the amount of leave that can be cashed out
annually from 20 hours to 80 hours, depending on the
available department funds effective May 1, 2017.
b) Incorporates the Wounded Warriors Transitional Leave
Act to provide up to 96 hours of additional sick leave for
employees hired after January 1, 2016, who are military
veterans and have a service connected disability rated 30
percent.
c) Increases the Overtime Meal Allowance from $6.00 to
$8.00, effective approximately three months after
ratification, for employees that work for the Department
of Transportation (Caltrans).
d) Converts all Caltrans employees to a monthly payroll
cycle and provides a one-time supplemental payment
SB 848
Page 5
equivalent to the employee's existing semi-monthly gross
salary, not to exceed $1,200 effective approximately three
months after ratification.
Duration
10)July 1, 2015 through July 1, 2019.
Judicial Branch Employee Benefits
11)Post-Employment Health and Dental Benefit Vesting Schedule.
A judicial branch employee first employed by the state on or
after January 1, 2017, will be subject to a vesting schedule
providing 50 percent of the employer contribution upon
completion of 15 years of state service, increasing five
percent for each additional year of service, until the
employee is 100 percent vested at 25 years of state service.
12)Employer Contribution for Future Retirees. 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 percent 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 percent of the weighted average
premium of the four largest Medicare health benefit plans
based on state retiree enrollment.
13)Prefunding of Other Post-Employment Benefits. The state and
state employees in the judicial branch will prefund retiree
healthcare with the goal of reaching 50 percent 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:
a) Effective July 1, 2016, 1.4 percent of pensionable
compensation.
SB 848
Page 6
b) Effective July 1, 2017, up to an additional 1.5
percent for a total employee contribution of up to three
percent of pensionable compensation. The additional amount
shall be determined by the Director of Finance no later
than April 1, 2017.
14)Medicare Part B Supplemental Benefit. 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.
15)Employee Pension Contribution. Increases the employee
pension contribution on or after July 1, 2017, from five
percent to eight percent.
16)Judges Salary Survey. Clarifies the statutory methodology
used to calculate the annual salary adjustment for state
judges and justices to include both salary increases and
decreases to be considered when calculating the average state
wage growth for purposes of adjusting salaries of judges and
justices.
Civil Service Improvement
17)Exempt Employee Reinstatement. Simplifies the exempt
appointee reinstatement guidelines by consolidating various
periods which an employee is required to make a request for
reinstatement. The new guidelines require no break in state
service, and submittal of a request within 10 working days
after the effective date of termination, regardless of exempt
appointment type. If an employee seeks reinstatement after
more than 10 working days after the effective date of
termination, reinstatement is at the discretion of the
appointing power. Provides exempt appointees who have at
least five years of state service, within four years of
termination, a right to obtain civil service appointment list
eligibility by taking a deferred examination for any class
that has a current eligible list and for which the employee
meets the minimum qualifications of the class.
18)Leave Credit. Specifies that an overpayment of leave
credits to state employees occurs when the employee receives
SB 848
Page 7
compensation in exchange for leave erroneously credited to
the employee for the purposes of an action to recover
overpayment.
19)Training. Specifies managers, supervisors and career
executive assignment employees will be required to complete
various leadership training and development as prescribed by
the department.
FISCAL EFFECT: Appropriation: Yes Fiscal
Com.:YesLocal: No
The Senate Budget and Fiscal Review Committee writes:
According to the California Department of Human Resources
(CalHR), BU 12's MOU results in the following costs:
Fiscal Year 2016-17: $37.9 million ($12.4 million
General Fund)
Total Incremental Cost: $139.5 million ($44.3 million
General Fund)
Total Budgetary Cost: $396.9 million ($126.5 million
General Fund)
In addition, according to CalHR roughly $5 million General
Fund a year will be absorbed within departmental resources for
costs associated with leave cash out.
Judicial Branch Employee Benefits will result in $9.9 million
General Fund costs.
SUPPORT: (Verified6/14/16)
None received
OPPOSITION: (Verified6/14/16)
None received
SB 848
Page 8
Prepared by: Anita Lee / B. & F.R. / (916) 651-4103
6/15/16 15:03:16
**** END ****