BILL ANALYSIS                                                                                                                                                                                                    �



                                                                  SB 1113
                                                                  Page  1

          Date of Hearing:   August 8, 2012

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Felipe Fuentes, Chair

                     SB 1113 (Evans) - As Amended:  July 5, 2012 

          Policy Committee:                              PERSSVote:6-0

          Urgency:     No                   State Mandated Local Program: 
          No     Reimbursable:              

           SUMMARY  


          This bill requires the Department of Human Resources (CalHR) to 
          consider issues of salary compaction and parity concerns, and if 
          there are insufficient revenues to allow the department to 
          implement salary adjustments, CalHR shall provide the 
          Legislature data on the salary determination.


           FISCAL EFFECT  

          1)CalHR estimates it will cost approximately $200,000 to 
            implement the provisions of this bill.

          2)To the extent a study on wage compaction could lead to 
            increases for supervisors and managers, there could be 
            significant increase in state personnel costs.  A 1% increase 
            in the salaries and wages for supervisors and managers would 
            cost approximately $35-40 million.

           COMMENTS  


           1)Purpose  .  According to the sponsor, the California 
            Correctional Supervisors Organization (CCSO), this is a 
            transparency bill, to help legislators learn the potential 
            financial ramifications of a Memorandum of Understanding 
            (MOU). They state that wage compaction occurs where 
            compensation increases for employee groups do not include 
            considerations of the supervisors directing the work force.  
            They conclude wage compaction typically does not result from 
            overt decisions, but from the MOU the negotiations, between 








                                                                  SB 1113
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            the employer and the rank-and-file organizations.  CCSO 
            contends that missing from these discussions is a 
            consideration of possible compaction issues.


           2)Background  .  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 three percent, that same increase is often 
            extended to excluded employees in related classes. However, 
            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. CalHR is charged with setting compensation 
            for excluded employees. 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 classes when 
            submitting the MOU package to the Legislature and LAO.


           3)There is no registered opposition to this bill.  


           Analysis Prepared by  :    Roger Dunstan / APPR. / (916) 319-2081