BILL ANALYSIS �
SENATE PUBLIC EMPLOYMENT & RETIREMENT BILL NO: SB 1113
Gloria Negrete McLeod, Chair
Hearing date: March 26, 2012
SB 1113 (Evans) as introduced 2/17/12 FISCAL: YES
STATE EMPLOYEES: COST ANALYSIS UPON REACHING A MEMORANDUM OF
UNDERSTANDING
HISTORY :
Sponsor: California Correctional Supervisors
Organization (CCSO)
Prior legislation: GRP 1, 2011
SB 621 (Speier)
Chapter 499, Statutes of 2005
SUMMARY :
SB 1113 would require that, whenever the California
Department of Human Resources (CalHR) provides a fiscal
analysis of a memorandum of understanding (MOU), it also must
provide an analysis of the financial obligation required to
address salary parity and wage compaction for related
excluded employees.
BACKGROUND AND ANALYSIS :
1) Existing law :
a) effective July 1, 2012, merges the Department of
Personnel Administration (DPA) and the administrative
functions of the State Personnel Board (SPB) to form
CalHR, which among other duties serves as the
representative for the Governor in all state collective
bargaining activities.
b) requires that CalHR and each of the state's 21
collective bargaining units meet and confer and enter
into contracts over wages and working conditions for
Pamela Schneider
Date: 3/23/12 Page 1
represented employees.
c) requires that, upon reaching a collective bargaining
agreement or MOU with a state bargaining unit, CalHR
submit to the Legislative Analyst's Office (LAO) and the
Legislature an analysis of the agreement or MOU,
including a fiscal analysis of any related costs or cost
savings, and requires that the agreement or MOU be
approved by the Legislature before being implemented.
d) requires that CalHR set salaries for excluded and
exempt employees, and allows excluded employee
representatives to meet and confer with CalHR, but does
not otherwise make the state employer or excluded
employees subject to collective bargaining requirements.
2) This bill requires that in addition to providing a fiscal
analysis for the MOU, CalHR also must include an analysis
of the financial obligation required to address salary
parity and wage compaction for related managerial and
exempt employees who are not covered under the provisions
of the MOU.
COMMENTS :
1) What is the current practice ?
Often, when an agreement or MOU is reached with a state
bargaining unit, certain provisions of the agreement or MOU
are also extended to related classes of employees who are
excluded from bargaining (mostly managers and supervisors).
For example, if represented employees are given a salary
increase of 3%, that same increase is often extended to
excluded employees in related classes.
However, CalHR sets compensation for excluded employees.
There is no statutory requirement to extend, to excluded
employees, a pay package that was bargained for represented
employees, or to study the impact of the MOU on related
excluded classes. According to CalHR, they do not
routinely do compaction studies upon reaching a MOU
agreement, nor do they routinely include estimated costs or
savings of extending MOU provisions to related excluded
Pamela Schneider
Date: 3/23/12 Page 2
classes when submitting the MOU package to the Legislature
and LAO.
2) What is wage compaction ?
Wage compaction generally occurs when managerial employees
do not earn enough in relation to the employees they
supervise. Managerial employees do not generally receive
overtime pay and other protections afforded to represented
employees. Moreover, they may have higher levels of stress
and responsibility. If managerial compensation is not high
enough, employees may be disincentivized from seeking
promotions, or after promoting, may later decide to demote
to non-managerial positions.
3) Argument in Support :
According to the sponsor, SB 1113 is a transparency bill,
intended to ensure that legislators receive a complete
picture of the potential financial ramifications of a
memorandum of understanding:
"Wage compaction occurs where percentage compensation
increases for employee groups do not include considerations
of the supervisors who are charged with the responsibility
of directing that work force to carry out its mission."
"Wage compaction typically does not result from overt
decisions, but rather from bad planning. Memoranda of
understanding between the employer and the rank and file
organization are typically conducted in a vacuum where the
issues on the table are the available resources of the
employer and the economic and benefit requests of the rank
and file organization. Missing from any of these
discussions is a consideration of possible compaction
issues."
4) SUPPORT :
California Correctional Supervisors Organization (CCSO),
Sponsor
5) OPPOSITION :
Pamela Schneider
Date: 3/23/12 Page 3
None to date
#####
Pamela Schneider
Date: 3/23/12 Page 4