BILL ANALYSIS
AB 964
Page 1
ASSEMBLY THIRD READING
AB 964 (Public Employees Committee)
As Amended March 23, 2009
2/3 vote. Urgency
PUBLIC EMPLOYEES 4-2 APPROPRIATIONS 11-0
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|Ayes:|Hernandez, Furutani, |Ayes:|De Leon, Ammiano, Charles |
| |Beall, Torrico | |Calderon, Davis, Fuentes, |
| | | |Hall, John A. Perez, |
| | | |Price, Skinner, Solorio, |
| | | |Torlakson |
| | | | |
|-----+--------------------------+-----+---------------------------|
|Nays:|Conway, Nestande | | |
| | | | |
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SUMMARY : Approves the recent memoranda of understanding (MOU)
agreed to by the state and the state bargaining units (BUs)
represented exclusively by the Service Employees International
Union (SEIU), Local 1000, including BU 1 (Professional,
Administrative, Financial, and Staff Services), 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), and,
BU 21 (Educational Consultant and Library).
EXISTING LAW requires, under the State Employee-Employer
Relations Act (the Dills Act), that collective bargaining
agreements (MOUs) that are negotiated between the state and
exclusive representatives of each of the 21 state bargaining
units be ratified by the Legislature.
FISCAL EFFECT : The Department of Personnel Administration
(DPA) has provided the following fiscal information:
Section 3.90 of the recent Budget Act reduced state employee
compensation and directed that the reductions be achieved
through a combination of collective bargaining, with
proportionate reductions for nonrepresented employees, and
existing administration authority. Section 3.90 further directed
DPA to include with MOUs submitted to the Legislature an
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estimate of the cost savings achieved.
The reduction in Section 3.90 was based on factors that included
an assumption that SEIU represented employees would be subject
to a 1 day per month self-directed furlough beginning February
1, 2009 and ending June 30, 2010.
This bill appropriates $9.5 million ($4.4 million General Fund
[GF] and $5.1 million Other Funds [OF]) to the current budget
year to cover the costs of the health care contribution and the
Institute for Quality Public Services. When subtracted from the
gross savings achieved by this contract, the net savings is
estimated as follows:
-----------------------------------------------------------------
| |2008/2009 |2009/2010 |Total |
-----------------------------------------------------------------
|--------+--------+--------+--------+--------+--------+--------|
|Savings |GF |OF |GF |OF |GF |OF |
|--------+--------+--------+--------+--------+--------+--------|
|SEIU |$ 52 |$ 60.6 |$128.5 |$147.9 |$180.5 |$208.5 |
|MOU | | | | | | |
|--------+--------+--------+--------+--------+--------+--------|
|Excluded|$ 16.5 |$ 19 |$ 39.7 |$ 45.6 |$ 56.2 |$ 64.6 |
| | | | | | | |
|--------+--------+--------+--------+--------+--------+--------|
|Costs | | | | | | |
|--------+--------+--------+--------+--------+--------+--------|
|SEIU |$ 4.4 |$ 5.1 |$ 20.5 |$ 21.9 |$ 24.9 |$ 27 |
|MOU | | | | | | |
|--------+--------+--------+--------+--------+--------+--------|
|Excluded|0 |0 |0 |0 |0 |0 |
| | | | | | | |
|--------+--------+--------+--------+--------+--------+--------|
|Net |$ 64.2 |$ 74.5 |$147.7 |$ 171.6 |$211.9 |$246.1 |
|Savings | | | | | | |
--------------------------------------------------------------
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COMMENTS : The following information regarding the MOUs was
provided by DPA:
This agreement affects approximately 86,783 full-time
equivalents. The major provisions include the following:
Compensation: Mandatory Personal Furlough Leave Program (PFLP)
Effective February 2009 through June 30, 2010, all employees
will be furloughed 1 day per month for 17 months. For most
employees 1 day is equivalent to 8 hours per month. This
"self-directed" furlough program will reduce take home pay by
4.62%.
This program will be in lieu of the Governor's 2 day per month
furlough program, established by executive order beginning
February 1, 2009 and extending through June 30, 2010. Since
these employees' take home pay will have already been reduced
for 4 furlough days in February and March, DPA and SEIU will
work together to equitably spread out the remaining furlough pay
reductions over the remaining months of the contract.
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.
The PFLP will not negatively impact an employee's retirement or
other employer paid benefits, or service credit for the purposes
of computing benefits or leave credits. AB 964 amends laws
governing the California Public Employees' Retirement System
(CalPERS) and the California State Teachers' Retirement System
(CalSTRS) to ensure this provision.
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.
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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.
The Legislature subsequently enacted, and the Governor signed,
SB 8 X3 (Ducheny), Chapter 4, Statutes of 2009-10 Third
Extraordinary Session, which excludes all leave from being
counted as time worked for the purpose of computing overtime.
Therefore, no leave may be used in computing overtime. For
example, if an employee is required to work for 40 hours in a
week before earning overtime, he or she must actually work 40
hours on the job before earning premium pay for overtime. Time
spent on leave for sick leave, vacation, or any other type of
leave may not be counted in the 40 hours of work needed to begin
accruing overtime.
(SB 8 X3 also included a provision stating that if the overtime
provisions included in that bill were in conflict with the
provisions of a MOU reached on or after February 1, 2009, or the
date that the act adding this section took effect, whichever is
later, the MOU would be controlling, as specified.)
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
units except Bargaining Unit 5 (CAHP).
Voluntary Personal Leave Program (VPLP)
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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%
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% of that year's weighted average premium of the
four plans with the highest employee enrollment; 80% for
dependent coverage. This benefit is currently provided to the
other eight 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
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to $55 per day 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% 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 SB 8 X3.
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 six months
(waiting period for SDI eligibility).
The Institute for Quality Public Services (Joint Labor
Management Trust)
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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.
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.
Analysis Prepared by : Karon Green / P.E., R. & S.S. / (916)
319-3957
FN: 0000393