This bill would express the intent of the Legislature to enact statutory changes relating to the Budget Act of 2019.

(Without Reference to File)

CONCURRENCE IN SENATE AMENDMENTS

CSA1 Bill Id:AB 118

Author:(Committee on Budget)

As Amended Ver:September 6, 2019

Majority vote. Budget Bill Appropriation Takes Effect Immediately

SUMMARY:

Provides legislative ratification of the memorandum of understandings (MOUs) agreed to by the state and Bargaining Units (BU) 1, 2, 3, 4, 5, 7, 11, 13, 14, 15, 17, 20, and 21. Specifically, this bill ratifies the MOUs for BU 2, (California Attorneys, Administrative Law Judges, and Hearing Officers in State Employment), BU 5 (California Association of Highway Patrolmen), BU 7 (Protective Services and Public Safety) whose current members are represented by the California Statewide Law Enforcement Association (CSLEA), BU 13 (Stationary Engineers) whose current members are represented by the International Union of Operating Engineers (IUOE), and BUs 1, 3, 4, 11, 14, 15, 17, 20, and 21 whose current members are represented by the Service Employees International Union (SEIU).

The Senate Amendments:

1. Establish the Ralph C. Dills Act, which requires the state to collectively bargain with the exclusive representatives of employee groups (i.e. bargaining units) regarding wages and working conditions, and to define negotiated agreements in MOUs.
2. Establish the California Department of Human Resources (CalHR) as the official representative of the Governor in all matters related to collective bargaining with state employees.
3. Require that any MOU between the state and an exclusive representative must be ratified by the Legislature.
4. Establish the California Public Employees' Retirement System (CalPERS), which administers health and retirement benefits for state employees.
5. Require 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.
6. Provide that fully vested state retirees (e.g., with 20 or more years of state employment or with 25 years or more depending on the bargaining unit) 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.
7. Require that Medicare-eligible retirees enroll in Medicare and choose a Medicare-coordinated health plan.
8. Provide 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. Some employees must work up 15 years for 50% up to 25 years to receive 100% of the employer contribution.
9. Provide 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).
10. Provide that the employer contribution for active state employee health care shall be determined through collective bargaining.

COMMENTS:

The following information summarizes the general provisions of each of the MOUs in this bill for BUs 1, 2, 3, 4, 5, 7, 11, 13, 14, 15, 17, 20, and 21, and was provided by CalHR:

BU 2

BU 2 is a total of approximately 4,275 full-time equivalents. Employees represented by Unit 2 are state-employed attorneys, administrative law judges, and other legal professionals who provide legal expertise for the state in many departments. The Department of Justice employs about a quarter of all Unit 2 employees.

RETIREMENT

1. Employee Pension Contribution
   1. Effective July 1, 2020, the employee contribution rates for Safety A, Safety B, and PEPRA State Safety retirement formulas shall increase from 11% to 11.5% of monthly compensation over $317.

HEALTH BENEFITS

1. Employer Contribution for Active State Employees
   1. The state's monthly 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 adjusted as appropriate pursuant to the formulas on January 1, 2020.
2. Improving Affordability and Access to Healthcare
   1. Effective July 1, 2019, all CASE employees enrolled in a CalPERS health plan will receive a monthly payment of $260.

COMPENSATION

1. General Salary Increase (GSI)
   1. Effective July 1, 2019, all CASE represented classifications shall receive a 2.75% GSI.

MISCELLANEOUS

1. Effective, upon ratification of both parties, and depending on the availability of departmental funds, the amount of leave that can be cashed out each year shall increase from 80 hours to 160 hours.
2. Duration: July 2 2019 through July 1, 2020.

BU 5

BU 5 is a total of approximately 6,674 full-time equivalents. Employees represented by Unit 5 are highway patrol officers employed by the California Highway Patrol (CHP). CHP officers patrol highways, enforce motor vehicle laws, and protect state officials, visiting dignitaries, and state property.

RETIREMENT and OTHER POST EMPLOYMENT BENEFITS

1. Employee Pension Contribution
   1. Effective July 1, 2020, the employee contribution for Patrol members shall remain in effect up until the time that CalPERS has determined that i) the total normal cost rate for the 2016-17 fiscal year has increased or decreased by 1%, and II) 50% of that normal cost rate, rounded to the nearest quarter of 1%, is greater or less than the current employee contribution rate. On July 1 of the fiscal year after CalPERS determines i) and ii), above, have been met, the employee contribution rate for Patrol members shall be adjusted to 50% of the normal cost rate rounded to the nearest quarter of 1%. Each year thereafter, it shall only be adjusted if CalPERS determines the total normal cost rate increases or decreases by more than 1% of payroll above the total normal cost rate in effect at the time the employee contribution rate was last adjusted. The increase or decrease to the employee contribution in any given fiscal year shall not exceed 1% per year.
   2. Effective July 1, 2020, the employee contribution for Miscellaneous members shall remain in effect up until the time that CalPERS has determined that i) the total normal cost rate for the 2016-17 fiscal year has increased or decreased by 1%, and ii) 50% of that normal cost rate, rounded to the nearest quarter of 1%, is greater or less than the current employee contribution rate. On July 1 of the fiscal year after CalPERS determines i) and ii), above, have been met, the employee contribution rate for Miscellaneous members shall be adjusted to 50% of the normal cost rate rounded to the nearest quarter of 1%. Each year thereafter, it shall only be adjusted if CalPERS determines the total normal cost rate increases or decreases by more than one% of payroll above the total normal cost rate in effect at the time the employee contribution rate was last adjusted. The increase or decrease to the employee contribution in any given fiscal year shall not exceed 1% per year.
2. Supplemental Pension Funding (New)
   1. Beginning in fiscal year 2019-20, and each year of the contract through June 30, 2023, the state will contribute $25 million from the Motor Vehicle Account (MVA), for a total of $100 million from the MVA, to the Patrol Member Retirement plan.
   2. During the 2020-21 fiscal year, the state will redirect $243 million of the $3 billion under Chapter 33, Statutes of 2019 (SB 90) to the Patrol Member Retirement plan.
3. Prefunding of Other Post-Employment Benefits
   1. Beginning July 1, 2020, the employer and employee Other Post Employment Benefit (OPEB) prefunding contribution percentages will decrease by 0.5%. The contribution amounts will now be a percentage of pensionable compensation.
   2. After July 1, 2020, with the goal reaching a 50% cost sharing of actuarially determined total normal costs, the employee and employer contribution percentages shall be adjusted based on actuarially determined total normal costs. Adjustments to both the employer and employee contribution percentages will occur if the actuarially determined total normal costs increase or decrease by more than 0.5% from the total normal cost contribution percentages in effect at the time. If it is determined that an adjustment to the contribution rate is necessary, commencing no sooner than July 1, 2021, and on July 1 each fiscal year thereafter, the employer and employee contribution percentages will be increased or decreased to maintain a 50% cost sharing of actuarially determined total normal costs. The statutory salary increases redirected to prefund OPEB paid for by the employer shall count towards the employee contribution percentage when determining the 50% cost sharing of actuarially determined total normal costs. The increase or decrease to the employer or employee contribution in any given fiscal year shall not exceed 0.5% per year.
4. Post-Employment Health and Dental Vesting Schedule
   1. Employees first employed by the state on or after January 1, 2020, 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. Employer Contribution of Future Retirees
   1. Employees first hired on or after January 1, 2020, 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.
6. Medicare Part B Supplemental Benefit
   1. Employees first hired on or after January 1, 2020, will no longer be eligible to use the employer contribution for a retiree health benefit plan for Medicare Part B premiums.

HEALTH BENEFITS

Employees may elect to participate in the Premier Vision Plan during the open enrollment period at employee cost.

COMPENSATION

Effective July 1, 2019, the general salary increase required by Government Code Section 19827 will not exceed 3%. Any amount in excess of 3% will be temporarily redirected as an employer contribution toward retirement. The amount that is temporarily redirected to retirement will be redirected back as a salary increase upon expiration of this contract.

MISCELLANEOUS

1. Removes the Minor Discipline Section from the contract to comply with standard practice of moving all discipline through the State Personnel Board.
2. Amends the Training Academy to provide 145 training days from approximately 27 weeks to reflect actual training requirements and provide flexibility to CHP when scheduling the academy date.
3. Specifies that during interim period between graduation and being placed on first assignment, recently graduated cadets shall mandatorily use a minimum of 40 hours, and may use a maximum of up to 80, of Compensating Time Off (CTO) to assist with reducing accrued CTO hours.
4. Establishes a provision to permit CHP to develop and implement, with concurrence of CAHP, alternate work schedules not expressly provided for elsewhere in the contract.
5. Effective the pay period following ratification, the lodging reimbursement rate shall increase from $125 to $140 for Alameda, San Mateo, and Santa Clara counties; and from $150 to $250 for San Francisco.
6. Eliminates employee Physical Performance Program and Wellness Program from the contract and will rely on existing CHP policy.
7. Effective May 1, 2020, and depending on the availability of departmental funds, employees may be eligible to cash out up to 80 hours of leave credits.
8. Provides furlough and mandatory personal leave program protection for the first two years of the contract, July 1, 2019, through June 30, 2021.
9. Allows the state to meet with CAHP if projected state revenues are insufficient to fully fund existing statutory and constitutional obligations, existing fiscal policy, and the costs of providing compensation pursuant to Government Code section 19827.
10. Duration: July 1, 2019 through June 30, 2022.

BU 7

BU 7 is a total of approximately 7,309 full-time equivalents or 3.3% of the state's workforce. These employees work in many departments. Among the largest classifications are California Highway Patrol dispatcher, Department of Motor Vehicles licensing-registration examiner, Department of State Hospitals police officer, and park ranger.

RETIREMENT

1. Benefit Formula Calculation
   1. Increases the amount of money that employees contribute towards their pension benefits. These increased employee contribution rates would reduce the state's contribution rates to pensions.
   2. Increases contributions for employees in the Peace Officer/ Firefighter (POFF) retirement tier from 13% of pay to 14% of pay in 2022‑23 and to 15% of pay in 2023‑24.
   3. Increases contributions for employees in the State Safety retirement tier from 11% of pay to 11.5% of pay in 2023‑24.
   4. Increases contributions for employees in the State Miscellaneous retirement tier from 8% of pay to 8.5% of pay in 2023‑24.

HEALTH BENEFITS

1. Employer Contribution for Active State Employees
   1. The state's monthly health 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. The flat dollar amounts shall be increased or decreased as appropriate pursuant to the formula on January 1, 2020, January 1, 2021, January 1, 2022, and January 1, 2023.

COMPENSATION

1. General Salary Increase (GSI)
   1. Provides all Unit 7 members regardless of classification a 2.75% increase in 2019‑20, 2.5% increase in 2020‑21, and 2.5% increase in 2021‑22.
   2. Provides all Unit 7 members regardless of classification a pay increase in 2022-23 depending on an employee's retirement benefit. Specifically, employees in the Peace Officer/Firefighter (POFF) pension tier (which is about 30% of Unit 7 members) would receive a 3.75% GSI and other employees in the bargaining unit would receive a 2.25% GSI.
   3. The four GSIs provided by the proposed agreement would compound to a 10.4% pay increase for non-POFF employees and 12% for POFF employees.
2. Special Salary Adjustment (SSA)
   1. Provides 58 classifications (or about 80% of Unit 7 members) SSAs in addition to the GSIs. The SSAs range from 1.45% to 24.08%, depending on the classification.
   2. Within the forensic science technicians occupation two classifications would receive two SSAs—5% SSA in 2019‑20 and an additional 5% SSA in 2020‑21.
3. Miscellaneous Compensation Increases
   1. Expands the Public Safety Dispatcher-In-Charge pay differential to all CHP centers, and adds communication operators working at the Department of State Hospitals and the Department of Parks and Recreation. Also increases the differential from $6.50 per shift to a one-step differential.
   2. Increases the Fire Fighter Lead Person Assignment pay differential from $1.00 to $2.50 per hour.
   3. Increases the Canine Care pay differential from $189 to $357 per month.
   4. Establishes a 5% Canine Care pay differential for peace officers at Department of Developmental Services.
   5. Increases the Night Shift Pay Differential from $0.50 to $1.00 per hour.
   6. Adds the CHP Communication Centers in Orange County, Ukiah, Humboldt, Chico, Ventura, San Luis Obispo, and Indio to the existing $300 per month recruitment and retention pay differential.
   7. Adds specified classifications at the Department of Motor Vehicles, Department of Consumer Affairs, Department of Developmental Services, and Department of State Hospitals to the existing one-step Field Training officer pay differential.
   8. Establishes a new 2.5% or one-step training officer pay differential for criminalists or senior criminalists serving in a training capacity.
   9. Increases the Training Officer pay differential for the Motor Carrier Specialist I, CHP, from $6.50 per shift to a one-step differential per hour when serving in a training officer capacity.
   10. Seasonal Lifeguards will now be hired prior to orientation and Initial Entry Training, which allows them to earn service credit and be compensated for each hour worked during the 96 hours of orientation and Initial Entry Training.
   11. Eliminates the $175 per period recruitment and retention pay differential for peace officers at the Department of Parks and Recreation and the Department of Fish and Wildlife.
   12. Eliminates the 7.44% Investigator Pay Differential for Investigators at the Department of Insurance and the Department of Consumer Affairs.

MISCELLANEOUS

1. Adds Licensing Registration Examiners, DMV, to the mandatory overtime provision that allows approved leave (except sick leave, annual leave, used as sick leave, or any other leave used for sick leave purposes) to be considered hours worked for purposes of calculating overtime.
2. Allows the state to reopen Article 19.1 if projected state revenues at the 2021-22 May Revision or at the 2022-23 May Revision to the Governor's Budget are insufficient to fully fund existing statutory and constitutional obligations, existing fiscal policy, and the cost of providing pay increases to all eligible employees.
3. Eliminates Furlough Protection.
4. Requires the state to donate 4,000 hours to CSLEA's Union Release Time Bank.
5. Duration: July 2, 2019 through July 1, 2023.

BU 13

BU 13 is a total of approximately 1,025 full-time equivalents. Employees represented by Unit 13 maintain and operate heating, cooling, water, wastewater, and other major mechanical systems at state facilities. Nearly half of these employees work for the California Department of Corrections and Rehabilitation. Among the largest classifications are stationary engineer and water and wastewater plant supervisor.

RETIREMENT

1. Benefit Formula Calculation
   1. Increases after June 30, 2022, the employee contribution rates for State Safety retirement formulas by 0.5% from 11% to 11.5% monthly compensation over $317.

HEALTH BENEFITS

1. Employer Contribution for Active State Employees
2. The state's monthly 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 adjusted as appropriate pursuant to the formulas on January 1, 2020, January 1, 2021, and January 1, 2022.

COMPENSATION

1. Salary Increases
   1. Effective July 1, 2019, the maximum of the salary ranges of all IUOE represented classifications will be increased by 2.75%.
   2. Effective July 1, 2020, the maximum of the salary ranges of all IUOE represented classifications will be increased by 3%.
   3. Effective July 1, 2021, the maximum of the salary ranges of all IUOE represented classifications will be increased by 2.75%.
2. Miscellaneous Compensation Increases
   1. Increases Night Shift Differential from $1 to $2 per hour; and Evening Shift from $0.90 to $1 per hour.
   2. Extends the Apprenticeship Training Fund to a general training fund to include all training courses offered through IUOE.
   3. Provides all Unit 13 employees boot reimbursement of $82 each year or $164 every two years for purchasing work boots.
   4. Increases the annual Recruitment and Retention Differential from $2,400 to $2,600; and adds Pelican Bay, High Desert, and California Conservation Center state prisons.
   5. Amends the current Wastewater and/or Water Treatment Plant (Chief Plant Operator) to receive this differential in addition to the Chief Plant Operator differential.
   6. Expands the current Department of General Services San Francisco Facilities pay differential to include all departments that have employees headquartered in the Greater Bay Area (Alameda, Contra Costa, Marin, Monterey, Napa, San Francisco, San Joaquin, San Mateo, Santa Clara, Santa Cruz, Solano, and Sonoma counties); and changes the annual stipend of $2,400 per year to 5% per month.
   7. Provides a $100 per month EPA Section 608 Technician Certification pay differential to employees required to maintain the certification.
   8. Provides a $200 per month pay differential to Caltrans Tunnels and Tubes Operators required to maintain a Class A or B commercial driver's license.
   9. Provides a Plant Experience Recruitment and Retention Differential to employees with continuous plant experience as follows:
      1. seven years continuous plant experience provides 5%;
      2. ten years continuous plant experience provides 7%; and
      3. thirteen years continuous plant experience provides 9%.

MISCELLANEOUS

1. As a part of the annual leave cash out program, allows employees to defer leave accruals into 401k or 457 plans.
2. Incorporates the Wounded Warriors Transitional Leave Act (Chap. 794, Stat. of 2015), which provides up to 96 hours of additional sick leave for an employee hired on or after January 1, 2016, who is a military veteran with a service-connected disability rated 30%.
3. Eliminates Furlough Protection.
4. Duration: July 1, 2019 through June 30, 2022.

BU 1, 3, 4, 11, 14, 15, 17, 20, and 21

The Service Employees International Union represents BUs 1, 3, 4, 11, 15, 17, 20, and 21 which includes a total of approximately 100,254 full-time equivalents. These employees perform many different types of jobs across numerous state departments and include accounting officers, auditors, analysts, and information technology analysts.

RETIREMENT

1. Employee Pension Contribution
2. Effective July 1, 2023, the employee contribution rates for Miscellaneous, Safety and Industrial members shall increase by 0.50% over the current contribution levels.

HEALTH BENEFITS

1. Employer Contribution for Active State Employees
2. The state's monthly benefit contribution for Bargaining Unit (Unit) 3 employees 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 adjusted as appropriate pursuant to the formulas on January 1, 2021, January 1, 2022, and January 1, 2023.
3. Improving Affordability and Access to HealthCare
4. Effective July 1, 2020, all SEIU employees enrolled in a CalPERS health plan will receive a monthly payment of $260 per month.

COMPENSATION

1. General Salary Increases
   1. Effective July 1, 2020, all SEIU employees shall receive a 2.5% GSI.
   2. Effective July 1, 2021, all SEIU employees shall receive a 2% GSI.
   3. Effective July 1, 2022, all SEIU employees shall receive a 2.5% GSI.
2. Special Salary Adjustment
   1. Effective July 1, 2020, Corporation Examiners shall receive an SSA of approximately 10.25%.
   2. Effective July 1, 2020, employees in the following classifications shall receive an SSA of 5%:
   3. Insurance Rate Analysts, various State Auditors, Transportation Analysts, Information Technology, Driver Safety Hearing Officer, Personnel and Payroll Specialists, Environmental Planners, Right of Way Agents, Transportation Planners, Hearing Reporters, State Historians, Financial Institutions Examiners, Librarians, various teachers, Motor Vehicle Representatives, Senior Motor Vehicle Technicians, Control Cashiers, Laboratory Assistants, Habitat Specialists, various Engineering Associates, Graphic Designers, Digital Composition Specialists, Printing Operations Assistants and Planners, Beauty and Barbershop Managers, Bakers, Seamers, Public Health nurses, Nurse Evaluators, Health Services Specialists, Nurse Consultants, Night Attendants, Counselors, Teaching Assistants, Transportation Programs Consultant, and Education Consultants
3. Minimum Wage
   1. The minimum hourly rate for all SEIU employees will be increased from $13 to $15 per hour on July 31, 2020.
   2. Various classifications will receive an SSA on July 31, 2020, to address compaction concerns as a result of minimum wage increasing from $13 to $15 per hour.
4. Miscellaneous Compensation Increases
   1. All Units
      1. Effective July 1, 2020, a new geographic pay differential of $250 per month will be provided to all SEIU employees working in Santa Barbara, Santa Cruz, San Luis Obispo or Orange County.
      2. Effective the pay period following ratification, the Bilingual Pay Differential will be increased from $100 per month to $200 per month.
      3. Effective the pay period following ratification, the Commute Program Reimbursements will be increased by $35 per month.
   2. Unit 1
      1. Effective September 1, 2019, the personnel and payroll specialist geographic pay differential (Pay Differential 211) will be expanded to include employees working in Alameda County.
      2. Effective July 1, 2020, the PERS and STRS performance and recognition pay differential will be expanded to include the Investment Officer II classification.
   3. Units 1 and 4
      1. Effective January 1, 2020, Correctional Case Records Analysts and Technicians will be eligible to receive an annual recruitment and retention pay differential of $2,400.
   4. Unit 4
      1. Effective the pay period following ratification, all of the call center pay differentials will be increased from $100 per month to $150 per month.
   5. Unit 17
      1. Effective July 1, 2020, Registered Nurses working for the State Special Schools will receive a 5% recruitment and retention pay differential.

MISCELLANEOUS

1. Establishes a Joint Task Force to make recommendations regarding civil service classifications that may be affected by new and emerging technologies and possible training/education or apprenticeship programs to ensure a viable workforce for the future.
2. Unit 3
   1. Clarified retirement options for new eligible Unit 3 employees to choose either CalPERS or CalSTRS retirement consistent with current statutes (Chapter 838, Statutes of 1997).
   2. Recognizes academic credits earned through California Commission on Teacher Credentialing (CCTC) to be considered for salary advancement. Strengthens the need for continuing education and trade experience in more than a singular academia.
3. Unit 15
   1. Provides protection to employees by not being mandated overtime on their pre-approved time off and limits the number of continuous hours of work to 16 hours in a 24-hour period.
4. Unit 17
   1. Commitment to reduce mandated overtime with first reduction occurring January 1, 2020, and further reductions by no later than July 1, 2022.
5. Unit 20
   1. Commitment to reduce mandated overtime with first reduction occurring January 1, 2020 and further reductions by no later than July 1, 2022.
   2. Extends continuing education leave for Medical Assistant classification consistent with their license/certification requirements.
6. Duration: January 2, 2020 through June 30, 2023.

According to the Author:

Arguments in Support:

None on file.

Arguments in Opposition:

None on file.

FISCAL COMMENTS:

The budget trailer bill includes a continuous appropriation. The bill appropriates $142.9 million ($50.0 million General Fund) from various fund sources for employee compensation for 2019-20 and $25 million from the Motor Vehicle Account to the Public Employees Retirement Fund for 2019-20.

The Administration estimates that the four-year budgetary numbers (2020-21 thru 2023-24) for SEIU represented BUs, BU 2, BU 5, BU 7, and BU 13 and related excluded employees for BU 7 (others not currently available) total $4.9 billion ($1.8 billion General Fund).

VOTES:

ASSEMBLY FLOOR: 54-13-13

YES: Aguiar-Curry, Bauer-Kahan, Bloom, Boerner Horvath, Bonta, Burke, Calderon, Carrillo, Cervantes, Chau, Chu, Cooper, Daly, Eggman, Frazier, Friedman, Gabriel, Cristina Garcia, Gipson, Gloria, Gonzalez, Gray, Grayson, Holden, Irwin, Jones-Sawyer, Kalra, Kamlager-Dove, Limón, Maienschein, McCarty, Medina, Mullin, Muratsuchi, Nazarian, O'Donnell, Petrie-Norris, Quirk, Quirk-Silva, Ramos, Reyes, Luz Rivas, Robert Rivas, Rodriguez, Blanca Rubio, Salas, Santiago, Smith, Mark Stone, Ting, Weber, Wicks, Wood, Rendon

NO: Bigelow, Brough, Dahle, Flora, Fong, Gallagher, Kiley, Mathis, Melendez, Obernolte, Patterson, Voepel, Waldron

ABS, ABST OR NV: Arambula, Berman, Chen, Chiu, Choi, Cooley, Cunningham, Diep, Eduardo Garcia, Lackey, Levine, Low, Mayes

UPDATED:

VERSION: September 6, 2019

CONSULTANT: Farra Bracht / BUDGET / (916) 319-2099 FN: 0002426

 THIRD READING  

Bill No: AB 118

Author: Committee on Budget

Amended: 9/6/19 in Senate

Vote: 21

SENATE BUDGET & FISCAL REVIEW COMMITTEE: 13-2, 9/10/19

AYES: Mitchell, Beall, Caballero, Hurtado, Jones, Leyva, Monning, Pan, Roth, Skinner, Stern, Umberg, Wieckowski

NOES: Nielsen, Dahle

NO VOTE RECORDED: McGuire, Moorlach, Stone

ASSEMBLY FLOOR: Not relevant

SUBJECT: State employment: State Bargaining Units 1, 2, 3, 4, 5, 7, 11, 13, 14, 15, 17, 20, and 21

SOURCE: Author

DIGEST:

This bill makes necessary statutory changes to ratify and implement memoranda of understanding (MOUs) between 13 bargaining units (BUs) and the state.

ANALYSIS:

Existing law:

1. Establishes the Ralph C. Dills Act, which requires the state to collectively bargain with the exclusive representatives of employee groups (i.e., bargaining units) - regarding wages and working conditions, and to define negotiated agreements in MOUs.
2. 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.
3. Requires that any MOU between the state and an exclusive representative be ratified by the Legislature.
4. Establishes the California Public Employees' Retirement System (CalPERS), which administers health and retirement benefits for state employees.
5. Requires the Legislative Analyst's Office (LAO) to analyze all state MOUs and to provide analysis of an MOU and its fiscal impact to the Legislature within 10 days of receipt of an MOU from CalHR.
6. Provides that fully vested state retirees (e.g., with 20 or more years of state employment or with 25 years or more, depending on the bargaining unit) are entitled to an employer contribution for retiree health care equal to 80 or 100 percent of the weighted average premium of the four health plans most highly utilized by all members. Depending on the bargaining unit, dependents are eligible for a contribution based on 80 or 90 percent of the average additional premiums paid for dependents during the benefit year in which the formula is applied. These are referred to as the 80/80 and 100/90 formulas.
7. Requires that Medicare-eligible retirees enroll in Medicare and choose a Medicare-coordinated health plan.
8. Provides that the employer contribution for active state employee health care shall be determined through collective bargaining.
9. Requires the state to pay sworn members of the California Highway Patrol who are rank-and-file members of BU 5 the estimated average total compensation for each corresponding rank for the Los Angeles Police Department, Los Angeles County Sheriff’s Office, San Diego Police Department, Oakland Police Department, and the San Francisco Police Department.
10. Makes, pursuant to SB 90 (Committee on Budget and Fiscal Review, Chapter 33, Statutes of 2019), a $3 billion General Fund supplemental pension payment from 2018-19 through 2022-23 to the CalPERS state plans based on their General Fund contributions to CalPERS.

This bill covers state employees represented by five exclusive employee representatives, as follows:

Service Employees International Union, Local 1000 (SEIU 1000):

• BU 1: 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 Trades
• BU 15: Allied Services
• BU 17: Registered Nurses
• BU 20: Medical and Social Services
• BU 21: Education Consultants and Library Employees

California Attorneys, Administrative Law Judges and Hearing Officers in State Employment (CASE):

• BU 2: Attorneys and Hearing Officers

California Association of Highway Patrolmen (CAHP):

• BU 5: Highway Patrol

California Statewide Law Enforcement Association (CSLEA):

• BU 7: Protective Services and Public Safety

International Union of Operating Engineer (IUOE):

• BU 13: Stationary Engineers

T This bill approves MOUs between the state and the following bargaining units and covers the corresponding full-time equivalent (FTE) positions for the duration of the agreements as cited below:

Bargaining Units 1, 3, 4, 11, 14, 15, 17, 20, and 21

This bill approves the MOUs between the state and SEIU Local 1000 (Bargaining Units 1, 3, 4, 11, 14, 15, 17, 20, and 21), as follows:

Compensation

1. SEIU Local 1000 employees shall receive the following General Salary Increases (GSI):
2. Effective July 1, 2020, employees shall receive a 2.5 percent GSI.
3. Effective July 1, 2021, employees shall receive a 2 percent GSI.
4. Effective July 1, 2022, employees shall receive a 2.5 percent GSI.
5. SEIU Local 1000 employees shall receive the following Special Salary Adjustments (SSA):
6. Effective July 1, 2020, Corporation Examiners shall receive an SSA of approximately 10.25 percent.
7. Effective July 1, 2020, employees in the following classifications shall receive an SSA of five percent, including:
8. Insurance Rate Analysts, various State Auditors, Transportation Analysts, Information Technology, Driver Safety Hearing Officers, Personnel and Payroll Specialists, Environmental Planners, Right of Way Agents, Transportation Planners, Hearing Reporters, State Historians, Financial Institutions Examiners, Librarians, various teachers, Motor Vehicle Representatives, Senior Motor Vehicle Technicians, Control Cashiers, Laboratory Assistants, Habitat Specialists, various Engineering Associates, Graphic Designers, Digital Composition Specialists, Printing Operations Assistants and Planners, Beauty and Barbershop Managers, Bakers, Seamers, Public Health Nurses, Nurse Evaluators, Health Services Specialists, Nurse Consultants, Night Attendants, Counselors, Teaching Assistants, Transportation Programs Consultant, and Education Consultants.
9. SEIU Local 1000 employees shall receive the following compensation adjustments:
10. Effective July 31, 2020, the minimum hourly rate will increase from $13 to $15 per hour, and various classifications will receive an SSA to address salary compaction as a result of this minimum wage increase.
11. Effective July 1, 2020, employees working in Santa Barbara, Santa Cruz, San Luis Obispo or Orange County shall receive a new geographic pay differential of $250 per month.
12. Effective the pay period following ratification, the Bilingual Pay Differential for employees will increase from $100 per month to $200 per month.
13. Effective the pay period following ratification, the Commute Program Reimbursements will increase by $35 per month.
14. BU 1 shall receive the following compensation adjustments:
    1. Effective September 1, 2019, the personnel and payroll specialist geographic pay differential will expand to include employees working in Alameda County.
    2. Effective July 1, 2020, the CalPERS and CalSTRS performance and recognition pay differential will expand to include the Investment Officer II classification.
15. For BU 1 and BU 4: Effective January 1, 2020, Correctional Case Records Analysts and Technicians will be eligible to receive an annual recruitment and retention pay differential of $2,400.
16. For BU 4: Effective the pay period following ratification, all of the call center pay differentials will increase from $100 per month to $150 per month.
17. For BU 17: Effective July 1, 2020, Registered Nurses working for the State Special Schools will receive a five percent recruitment and retention pay differential.

Employee Pension Contribution

1. Effective July 1, 2023, the employee contribution rates for Miscellaneous, Safety and Industrial members shall increase by 0.50 percent, as follows:
   1. For Miscellaneous members in BUs 1, 3, 4, 11, 14, 15, 17, 20, and 21, the rate increases to 8.5 percent for members of the federal system, and 9.5 percent for members not included in the federal system.
   2. For Industrial members who are in BUs 1, 3, 4, 11, 14, 15, 17 and 20, the rate increases to 9.5 percent for members of the federal system, and 10.5 percent for members not included in the federal system.
   3. For Industrial members who are in BU 21, the rate increases to 8.5 percent for members in the federal system, and 9.5 percent for members not in the federal system.
   4. For state safety members in BUs 1, 3, 4, 11, 14, 15, 17, 20 and 21, the rate increases to 11.5 percent.

Health Benefits

1. The state’s monthly benefit contribution for BU 3 employees 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 adjusted as appropriate pursuant to the formulas on January 1, 2021, January 1, 2022, and January 1, 2023.
2. Effective July 1, 2020, SEIU Local 1000 employees enrolled in a CalPERS health plan will receive a monthly payment of $260 per month for 36 months.

Miscellaneous Adjustments

1. Establishes a Joint Task Force to make recommendations regarding civil service classifications that may be affected by new and emerging technologies and possible training/education or apprenticeship programs to ensure a viable workforce for the future.
2. For BU 3, makes the following miscellaneous adjustments:
   1. Clarifies that retirement options are consistent with existing law and that new eligible employees to choose either CalPERS or CalSTRS retirement.
   2. Recognizes academic credits earned through California Commission on Teacher Credentialing to be considered for salary advancement. Strengthens the need for continuing education and trade experience in more than a singular academia.
3. For BU 15: Provides protection to employees by not imposing mandated overtime on their pre-approved time off and limiting the number of continuous hours of work to 16 hours in a 24-hour period.
4. For BU 17 and BU 20: Reduces mandated overtime starting on January 1, 2020, and makes further reductions by July 1, 2022.
5. For BU 20: Extends continuing education leave for the Medical Assistant classification, consistent with their license/certification requirements.

Bargaining Unit 2

This bill approves the MOU between the state and BU 2 (CASE), as follows:

Compensation

1. Effective July 1, 2019, all CASE represented classifications shall receive a 2.75 percent GSI.
2. Effective upon ratification of both parties, and depending on the availability of departmental funds, the amount of leave that can be cashed out each year shall increase from 80 hours to 160 hours.

Employee Pension Contribution

1. Effective July 1, 2020, the employee contribution rates for Safety A, Safety B, and PEPRA State Safety retirement formulas shall increase from 11 percent to 11.5 percent.

Health Benefits

1. The state’s monthly consolidated 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 adjusted as appropriate pursuant to the formulas on January 1, 2020.
2. Effective July 1, 2019, all CASE employees enrolled in a CalPERS health plan will receive a monthly payment of $260 for 12 months.

Bargaining Unit 5

This bill approves the MOU between the state and BU 5 (CAHP), as follows:

Compensation

1. Effective July 1, 2019, the GSI required by Government Code section 19827 will not exceed three percent. Any amount in excess of three percent will be temporarily redirected as an employer contribution toward retirement. The amount that is temporarily redirected to retirement will be redirected back as a salary increase upon expiration of this contract.

Employee Pension Contribution

1. Effective July 1, 2020, the employee contribution for Patrol and Miscellaneous members shall remain in effect up until the time that CalPERS has determined that: (a) the total normal cost rate for the 2016-17 fiscal year has increased or decreased by one percent, and (b) 50 percent of that normal cost rate, rounded to the nearest quarter of one percent, is greater or less than the current employee contribution rate.

On July 1 of the fiscal year after CalPERS determines that (a) and (b) above have been met, the employee contribution rate for Patrol and Miscellaneous members shall be adjusted to 50 percent of the normal cost rate rounded to the nearest quarter of one percent.

Each year thereafter, the contribution rate shall only be adjusted if CalPERS determines that the total normal cost rate increases or decreases by more than one percent of payroll above the total normal cost rate in effect at the time the employee contribution rate was last adjusted.

The increase or decrease to the employee contribution in any given fiscal year shall not exceed one percent per year.

Supplemental Pension Payment

1. Beginning in 2019-20, and for each year of the contract through June 30, 2023, the state will contribute $25 million from the Motor Vehicle Account (MVA), for a total of $100 million from the MVA, to make a supplemental pension payment to the Patrol Member Retirement plan.
2. In 2020-21, the state will redirect $243 million General Fund of the $265 million General Fund from SB 90 (Committee on Budget and Fiscal Review), Chapter 33, Statutes of 2019, to make a supplemental pension payment to the Patrol Member Retirement plan.

Prefunding and Vesting in Other Post-Employment Benefits (OPEB)

1. Beginning July 1, 2020, the employer and employee OPEB prefunding contribution will decrease by 0.5 percent to 3.4 percent and zero, respectively. In lieu of a statutory pay increase, the MOU also redirects 3.4 percent of pensionable compensation to prefund retiree health benefits.
2. After July 1, 2020, with the goal of reaching a 50 percent cost sharing of actuarially determined total normal costs, the employee and employer contribution percentages shall be adjusted based on actuarially determined total normal costs.

If the actuarially determined total normal costs increase or decrease by more than half a percent from the total normal cost contribution percentages in effect at the time, the adjustment will commence no sooner than July 1, 2021. On July 1 each fiscal year thereafter, the employer and employee contribution percentages will be increased or decreased to maintain a 50 percent cost sharing of actuarially determined total normal costs.

The increase or decrease to the employer or employee contribution in any given fiscal year shall not exceed 0.5 percent per year.

1. The statutory salary increases redirected to prefund OPEB paid for by the employer shall count towards the employee contribution percentage when determining the 50 percent cost sharing of actuarially determined total normal costs.
2. Employees first employed by the state on or after January 1, 2020, will be subject to an extended post-employment health and dental benefits 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.
3. Employees first hired on or after January 1, 2020, 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.
4. Employees first hired on or after January 1, 2020, will no longer be eligible to use the employer contribution for a retiree health benefit plan for Medicare Part B premiums.

Health Benefits

1. Employees may elect to participate in the Premier Vision Plan during the open enrollment period at employee cost.

Miscellaneous Adjustments

1. Allows the state to meet with California Association of Highway Patrolmen (CAHP) to reopen the MOU if projected state revenues are insufficient to fully fund existing statutory and constitutional obligations, existing fiscal policy, and the costs of providing compensation pursuant to Government Code section 19827. This is effective on July 1, 2021 and July 1, 2022.
2. Removes the Minor Discipline Section from the contract to comply with the standard practice of moving all discipline through the State Personnel Board.
3. Amends the Training Academy to provide 145 training days from approximately 27 weeks to reflect actual training requirements and provide flexibility to California Highway Patrol (HP) when scheduling the academy date.
4. Specifies that during the interim period between graduation and being placed on a first assignment, recently graduated cadets shall mandatorily use a minimum of 40 hours, and may use a maximum of up to 80, of Compensating Time Off (CTO) to assist with reducing accrued CTO hours.
5. Establishes a provision to permit CHP to develop and implement, with the concurrence of CAHP, alternate work schedules not expressly provided for elsewhere in the contract.
6. Effective the pay period following ratification, increases the lodging reimbursement rate from $125 to $140 for Alameda, San Mateo, and Santa Clara counties; and from $150 to $250 for San Francisco.
7. Eliminates the employee Physical Performance Program and Wellness Program from the contract and will relies on existing CHP policy.
8. Effective May 1, 2020, depending upon the availability of departmental funds, employees may be eligible to cash out up to 80 hours of leave credits.
9. Provides furlough and mandatory personal leave program protection for the first two years of the contract, July 1, 2019, through June 30, 2021.

Bargaining Unit 7

This bill approves the MOU between the state and BU 7, as follows:

Compensation

1. BU 7 employees shall receive the following GSI:
   1. Effective July 1, 2019, BU 7 shall receive a 2.75 percent GSI.
   2. Effective July 1, 2020, BU 7 shall receive a 2.50 percent GSI.
   3. Effective July 1, 2021, BU 7 shall receive a 2.50 percent GSI.
   4. Effective July 1, 2022, BU 7 represented classification designated Peace Officer/Firefighters (PO/FF) shall receive a 3.75 percent GSI.
   5. Effective July 1, 2022, BU 7 represented classifications designated Safety or Miscellaneous/Industrial shall receive a 2.25 percent GSI.
2. BU 7 shall receive the following SSAs:
   1. Effective July 1, 2019, BU 7 represented employees from various classifications shall receive a SSA ranging from 1.45 percent to 24 percent, depending on the classification.
   2. Effective July 1, 2020, Criminalists and Senior Criminalists shall receive a five percent SSA.
3. Expands the Public Safety Dispatcher-In-Charge pay differential to all CHP centers, and adds communication operators working at the Department of State Hospitals and the Department of Parks and Recreation. The agreement also increases the differential from $6.50 per shift to a one-step differential.
4. Increases the Fire Fighter Lead Person Assignment pay differential from $1.00 to $2.50 per hour.
5. Increases the Canine Care pay differential from $189 to $357 per month.
6. Establishes a five percent Canine Care pay differential for peace officers at the Department of Developmental Services.
7. Increases the Night Shift Pay Differential from $0.50 to $1.00 per hour.
8. Adds the CHP Communication Centers in Orange County, Ukiah, Humboldt, Chico, Ventura, San Luis Obispo, and Indio to the existing $300 per month recruitment and retention pay differential.
9. Adds specified classifications at the Department of Motor Vehicles (DMV), Department of Consumer Affairs (DCA), Department of Developmental Services, and Department of State Hospitals to the existing one-step Field Training officer pay differential.
10. Establishes a new 2.5 percent or one-step training officer pay differential for criminalists or senior criminalists serving in a training capacity.
11. Increases the Training Officer pay differential for the Motor Carrier Specialist I, CHP, from $6.50 per shift to a one-step differential per hour when serving in a training officer capacity.
12. Changes the hiring process for Seasonal Lifeguards so that they will be hired prior to orientation and Initial Entry Training, which allows them to earn service credit and be compensated for each hour worked during the 96 hours of orientation and Initial Entry Training.
13. Eliminates the $175 per period recruitment and retention pay differential for peace officers at the Department of Parks and Recreation and the Department of Fish and Wildlife.
14. Eliminates the 7.44 percent Investigator Pay Differential for Investigators at the Department of Insurance and the DCA.

Employee Pension Contributions

1. Adjusts the employee contribution rates for PO/FF A, PO/FF B, and Public Employees’ Pension Reform Act (PEPRA) PO/FF retirement formulas, as follows:
   1. Effective July 1, 2022, increases from 13 percent to 14 percent.
   2. Effective July 1, 2023, increases from 14 percent to 15 percent.
2. Effective July 1, 2023, adjusts the employee contribution rates as follows:
   1. Increases Safety A, Safety B, and PEPRA State Safety retirement from 11 percent to 11.5 percent.
   2. Increases Miscellaneous/Industrial First Tier A, First Tier B, and PEPRA First Tier retirement formulas from 8 percent to 8.5 percent.

Health Benefits for Active Employees

1. Continues the state’s monthly health benefit contribution for each employee at 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. The flat dollar amounts shall be adjusted as appropriate pursuant to the formula for January 1, 2020, January 1, 2021, January 1, 2022, and January 1, 2023.

Miscellaneous Adjustments

1. Allows the state to reopen the MOU if projected state revenues at the 2021-22 May Revision or at the 2022-23 May Revision to the Governor’s Budget are insufficient to fully fund existing statutory and constitutional obligations, existing fiscal policy, and the cost of providing pay increases to all eligible employees.
2. Adds Licensing Registration Examiners, DMV, to the mandatory overtime provision that allows approved leave (except sick leave, annual leave used as sick leave, or any other leave used for sick leave purposes) to be considered hours worked for purposes of calculating overtime.
3. Eliminates Furlough Protection.
4. Requires the state to donate 4,000 hours to the California State Law Enforcement Association’s Union Release Time Bank.

Bargaining Unit 13

This bill approves the MOU between the state and BU 13 (IUOE), as follows:

Compensation

1. Increases the maximum salary ranges for BU 13 classifications, as follows:
   1. Effective July 1, 2019, the maximum salary ranges will be increased by 2.75 percent.
   2. Effective July 1, 2020, the maximum salary ranges will be increased by three percent.
   3. Effective July 1, 2021, the maximum salary ranges will be increased by 2.75 percent.
2. Increases the Night Shift Differential from $1 to $2 per hour; and Evening Shift Differential from $0.90 to $1 per hour.
3. Extends the Apprenticeship Training Fund to a general training fund to include all training courses offered through International Union of Operating Engineers (IUOE).
4. Provides all BU 13 employees boot reimbursement of $82 each year or $164 every two years, for purchasing work boots.
5. Increases the annual Recruitment and Retention Differential from $2,400 to $2,600; and adds Pelican Bay, High Desert, and California Conservation Center state prisons.
6. Amends the current Wastewater and/or Water Treatment Plant (Chief Plant Operator) to receive this differential in addition to the Chief Plant Operator differential.
7. Expands the current Department of General Services San Francisco Facilities pay differential to include all departments that have employees headquartered in the Greater Bay Area (Alameda, Contra Costa, Marin, Monterey, Napa, San Francisco, San Joaquin, San Mateo, Santa Clara, Santa Cruz, Solano, and Sonoma counties); and changes the annual stipend of $2,400 per year to five percent per month.
8. Provides a $100 per month Environmental Protection Agency Section 608 Technician Certification pay differential to employees required to maintain the certification.
9. Provides a $200 per month pay differential to Caltrans Tunnels and Tubes Operators required to maintain a Class A or B commercial driver’s license.
10. Provides a Plant Experience Recruitment and Retention Differential to employees with continuous plant experience as follows:
    1. 7 years continuous plant experience provides five percent;
    2. 10 years continuous plant experience provides seven percent; and
    3. 13 years continuous plant experience provides nine percent.

Employee Pension Contribution

1. Effective after June 30, 2022, increases the employee contribution rates for State Safety retirement formulas from 11 percent to 11.5 percent of monthly compensation over $317.

Employer Contribution for Active State Employees

1. Continues the state’s monthly benefit contribution for each employee at 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 adjusted as appropriate pursuant to the formulas on January 1, 2020, January 1, 2021, and January 1, 2022.

Miscellaneous Adjustments

1. As a part of the annual leave cash out program, allows employees to defer leave accruals into 401k or 457 plans.
2. Incorporates the Wounded Warriors Transitional Leave Act, which provides up to 96 hours of additional sick leave for an employee hired on or after January 1, 2016, who is a military veteran with a service-connected disability rated 30 percent.
3. Eliminates Furlough Protection.

FISCAL EFFECT: Appropriation: Yes Fiscal Com.: Yes Local: No

According to the Senate Budget and Fiscal Review Committee:

• Fiscal Year 2019-20 for BUs 1, 2, 3, 4, 5, 7, 11, 13, 14, 15, 17, 20 and 21 and their related excluded employees: $142.9 million ($50 million General Fund).
• Total Four-Year Budgetary Cost (FY 2020-21 thru FY 2023-24) for BUs 1, 2, 3, 4, 5, 7, 11, 13, 14, 15, 17, 20 and 21 and related excluded employees for BU 7: $4.9 billion ($1.8 billion General Fund).
• From 2019-20 through June 30, 2023, transfers $100 million from the MVA to make a supplemental payment to the Public Employees’ Retirement Fund (PERF).
• For 2020-21, transfers $243 million General Fund from SB 90 to make a supplemental pension payment to the state patrol member category of the PERF.

SUPPORT: (Verified 9/10/19)

None received

OPPOSITION: (Verified 09/10/19)

None received

Prepared by: Anita Lee / B. & F.R. / 916-651-4103

9/11/19 20:09:28

**** END ****

SENATE COMMITTEE ON

Senator Holly Mitchell, Chair

2019 - 2020 Regular

Bill No: Hearing Date: September 10, 2019

Subject: State employment: State Bargaining Units 1, 2, 3, 4, 5, 7, 11, 13, 14, 15, 17, 20, and 21

Summary:

Makes necessary statutory changes to ratify and implement memoranda of understanding (MOUs) between 12 bargaining units (BUs) and the state. The MOUs cover state employees represented by four exclusive employee representatives, as follows:

Service Employees International Union, Local 1000 (SEIU 1000)

• BU 1: 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 Trades
• BU 15: Allied Services
• BU 17: Registered Nurses
• BU 20: Medical and Social Services
• BU 21: Education Consultants and Library Employees

California Attorneys, Administrative Law Judges and Hearing Officers in State Employment (CASE)

• BU 2: Attorneys and Hearing Officers

California Association of Highway Patrolmen (CAHP)

• BU 5: Highway Patrol

California Statewide Law Enforcement Association (CSLEA)

• BU 7: Protective Services and Public Safety

International Union of Operating Engineer (IUOE)

• BU 13: Stationary Engineers

Existing Law:

1. Establishes the Ralph C. Dills Act, which requires the state to collectively bargain with the exclusive representatives of employee groups (i.e., bargaining units) - regarding wages and working conditions, and to define negotiated agreements in MOUs.
2. 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.
3. Requires that any MOU between the state and an exclusive representative be ratified by the Legislature.
4. Establishes the California Public Employees' Retirement System (CalPERS), which administers health and retirement benefits for state employees.
5. Requires the Legislative Analyst's Office (LAO) to analyze all state MOUs and to provide analysis of an MOU and its fiscal impact to the Legislature within 10 days of receipt of an MOU from CalHR.
6. Provides that fully vested state retirees (e.g., with 20 or more years of state employment or with 25 years or more, depending on the bargaining unit) are entitled to an employer contribution for retiree health care equal to 80 or 100 percent of the weighted average premium of the four health plans most highly utilized by all members. Depending on the bargaining unit, dependents are eligible for a contribution based on 80 or 90 percent of the average additional premiums paid for dependents during the benefit year in which the formula is applied. These are referred to as the 80/80 and 100/90 formulas.
7. Requires that Medicare-eligible retirees enroll in Medicare and choose a Medicare-coordinated health plan.
8. Provides that the employer contribution for active state employee health care shall be determined through collective bargaining.
9. Requires the state to pay sworn members of the California Highway Patrol who are rank-and-file members of BU 5 the estimated average total compensation for each corresponding rank for the Los Angeles Police Department, Los Angeles County Sheriff’s Office, San Diego Police Department, Oakland Police Department, and the San Francisco Police Department.

Proposed Law:

This bill approves MOUs between the state and the following bargaining units and would cover the corresponding full-time equivalent (FTE) positions for the duration of the agreements as cited below:

Bargaining Units 1, 3, 4, 11, 14, 15, 17, 20, and 21: This bill approves the MOUs between the state and SEIU Local 1000, as follows:

Compensation

1. SEIU Local 1000 employees shall receive the following General Salary Increases (GSI):
2. Effective July 1, 2020, employees shall receive a 2.5 percent GSI.
3. Effective July 1, 2021, employees shall receive a 2 percent GSI.
4. Effective July 1, 2022, employees shall receive a 2.5 percent GSI.
5. SEIU Local 1000 employees shall receive the following Special Salary Adjustments (SSA):
6. Effective July 1, 2020, Corporation Examiners shall receive an SSA of approximately 10.25 percent.
7. Effective July 1, 2020, employees in the following classifications shall receive an SSA of five percent, including:
8. Insurance Rate Analysts, various State Auditors, Transportation Analysts, Information Technology, Driver Safety Hearing Officers, Personnel and Payroll Specialists, Environmental Planners, Right of Way Agents, Transportation Planners, Hearing Reporters, State Historians, Financial Institutions Examiners, Librarians, various teachers, Motor Vehicle Representatives, Senior Motor Vehicle Technicians, Control Cashiers, Laboratory Assistants, Habitat Specialists, various Engineering Associates, Graphic Designers, Digital Composition Specialists, Printing Operations Assistants and Planners, Beauty and Barbershop Managers, Bakers, Seamers, Public Health Nurses, Nurse Evaluators, Health Services Specialists, Nurse Consultants, Night Attendants, Counselors, Teaching Assistants, Transportation Programs Consultant, and Education Consultants.
9. SEIU Local 1000 employees shall receive the following compensation adjustments:
10. Effective July 31, 2020, the minimum hourly rate will increase from $13 to $15 per hour, and various classifications will receive an SSA to address salary compaction as a result of this minimum wage increase.
11. Effective July 1, 2020, employees working in Santa Barbara, Santa Cruz, San Luis Obispo or Orange County shall receive a new geographic pay differential of $250 per month.
12. Effective the pay period following ratification, the Bilingual Pay Differential for employees will increase from $100 per month to $200 per month.
13. Effective the pay period following ratification, the Commute Program Reimbursements will increase by $35 per month.
14. BU 1 shall receive the following compensation adjustments:
    1. Effective September 1, 2019, the personnel and payroll specialist geographic pay differential will expand to include employees working in Alameda County.
    2. Effective July 1, 2020, the CalPERS and CalSTRS performance and recognition pay differential will expand to include the Investment Officer II classification.
15. For BU 1 and BU 4: Effective January 1, 2020, Correctional Case Records Analysts and Technicians will be eligible to receive an annual recruitment and retention pay differential of $2,400.
16. For BU 4: Effective the pay period following ratification, all of the call center pay differentials will increase from $100 per month to $150 per month.
17. For BU 17: Effective July 1, 2020, Registered Nurses working for the State Special Schools will receive a five percent recruitment and retention pay differential.

Employee Pension Contribution

1. Effective July 1, 2023, the employee contribution rates for Miscellaneous, Safety and Industrial members shall increase by 0.50 percent, as follows:
   1. For Miscellaneous members in BUs 1, 3, 4, 11, 14, 15, 17, 20, and 21, the rate increases to 8.5 percent for members of the federal system, and 9.5 percent for members not included in the federal system.
   2. For Industrial members who are in BUs 1, 3, 4, 11, 14, 15, 17 and 20, the rate increases to 9.5 percent for members of the federal system, and 10.5 percent for members not included in the federal system.
   3. For Industrial members who are in BU 21, the rate increases to 8.5 percent for members in the federal system, and 9.5 percent for members not in the federal system.
   4. For state safety members in BUs 1, 3, 4, 11, 14, 15, 17, 20 and 21, the rate increases to 11.5 percent.

Health Benefits

1. The state’s monthly benefit contribution for BU 3 employees 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 adjusted as appropriate pursuant to the formulas on January 1, 2021, January 1, 2022, and January 1, 2023.
2. Effective July 1, 2020, SEIU Local 1000 employees enrolled in a CalPERS health plan will receive a monthly payment of $260 per month for 36 months.

Miscellaneous Adjustments

1. Establishes a Joint Task Force to make recommendations regarding civil service classifications that may be affected by new and emerging technologies and possible training/education or apprenticeship programs to ensure a viable workforce for the future.
2. For BU 3, makes the following miscellaneous adjustments:
   1. Clarifies that retirement options are consistent with existing law and that new eligible employees to choose either CalPERS or CalSTRS retirement.
   2. Recognizes academic credits earned through California Commission on Teacher Credentialing to be considered for salary advancement. Strengthens the need for continuing education and trade experience in more than a singular academia.
3. For BU 15: Provides protection to employees by not imposing mandated overtime on their pre-approved time off and limiting the number of continuous hours of work to 16 hours in a 24-hour period.
4. For BU 17 and BU 20: Reduces mandated overtime starting on January 1, 2020, and makes further reductions by July 1, 2022.
5. For BU 20: Extends continuing education leave for the Medical Assistant classification, consistent with their license/certification requirements.

Bargaining Unit 2: This bill approves the MOU between the state and BU 2, as follows:

Compensation

1. Effective July 1, 2019, all CASE represented classifications shall receive a 2.75 percent GSI.
2. Effective upon ratification of both parties, and depending on the availability of departmental funds, the amount of leave that can be cashed out each year shall increase from 80 hours to 160 hours.

Employee Pension Contribution

1. Effective July 1, 2020, the employee contribution rates for Safety A, Safety B, and PEPRA State Safety retirement formulas shall increase from 11 percent to 11.5 percent.

Health Benefits

1. The state’s monthly consolidated 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 adjusted as appropriate pursuant to the formulas on January 1, 2020.
2. Effective July 1, 2019, all CASE employees enrolled in a CalPERS health plan will receive a monthly payment of $260.

Bargaining Unit 5: This bill approves the MOU between the state and BU 5, as follows:

Compensation

Effective July 1, 2019, the GSI required by Government Code section 19827 will not exceed three percent. Any amount in excess of three percent will be temporarily redirected as an employer contribution toward retirement. The amount that is temporarily redirected to retirement will be redirected back as a salary increase upon expiration of this contract.

Employee Pension Contribution

1. Effective July 1, 2020, the employee contribution for Patrol and Miscellaneous members shall remain in effect up until the time that CalPERS has determined that: (a) the total normal cost rate for the 2016-17 fiscal year has increased or decreased by one percent, and (b) 50 percent of that normal cost rate, rounded to the nearest quarter of one percent, is greater or less than the current employee contribution rate.

On July 1 of the fiscal year after CalPERS determines that (a) and (b) above have been met, the employee contribution rate for Patrol and Miscellaneous members shall be adjusted to 50 percent of the normal cost rate rounded to the nearest quarter of one percent.

Each year thereafter, the contribution rate shall only be adjusted if CalPERS determines that the total normal cost rate increases or decreases by more than one percent of payroll above the total normal cost rate in effect at the time the employee contribution rate was last adjusted.

The increase or decrease to the employee contribution in any given fiscal year shall not exceed one percent per year.

Supplemental Pension Payment

1. Beginning in 2019-20, and for each year of the contract through June 30, 2023, the state will contribute $25 million from the Motor Vehicle Account (MVA), for a total of $100 million from the MVA, to make a supplemental pension payment to the Patrol Member Retirement plan.
2. In 2020-21, the state will redirect $243 million General Fund of the $265 million General Fund from SB 90 (Committee on Budget and Fiscal Review), Chapter 33, Statutes of 2019, to make a supplemental pension payment to the Patrol Member Retirement plan.

From 2018-19 through 2022-23, SB 90 will appropriate $3 billion General Fund supplemental pension payments to the CalPERS state plans, based on their General Fund contribution to CalPERS.

Prefunding and Vesting in Other Post-Employment Benefits (OPEB)

1. Beginning July 1, 2020, the employer and employee OPEB prefunding contribution will decrease by 0.5 percent to 3.4 percent and zero, respectively. In lieu of a statutory pay increase, the MOU also redirects 3.4 percent of pensionable compensation to prefund retiree health benefits.
2. After July 1, 2020, with the goal of reaching a 50 percent cost sharing of actuarially determined total normal costs, the employee and employer contribution percentages shall be adjusted based on actuarially determined total normal costs.

If the actuarially determined total normal costs increase or decrease by more than half a percent from the total normal cost contribution percentages in effect at the time, the adjustment will commence no sooner than July 1, 2021. On July 1 each fiscal year thereafter, the employer and employee contribution percentages will be increased or decreased to maintain a 50 percent cost sharing of actuarially determined total normal costs.

The increase or decrease to the employer or employee contribution in any given fiscal year shall not exceed 0.5 percent per year.

1. The statutory salary increases redirected to prefund OPEB paid for by the employer shall count towards the employee contribution percentage when determining the 50 percent cost sharing of actuarially determined total normal costs.
2. Employees first employed by the state on or after January 1, 2020, will be subject to an extended post-employment health and dental benefits 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.
3. Employees first hired on or after January 1, 2020, 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.
4. Employees first hired on or after January 1, 2020, will no longer be eligible to use the employer contribution for a retiree health benefit plan for Medicare Part B premiums.

Health Benefits

1. Employees may elect to participate in the Premier Vision Plan during the open enrollment period at employee cost.

Miscellaneous Adjustments

1. Allows the state to meet with California Association of Highway Patrolmen (CAHP) to reopen the MOU if projected state revenues are insufficient to fully fund existing statutory and constitutional obligations, existing fiscal policy, and the costs of providing compensation pursuant to Government Code section 19827. This is effective on July 1, 2021 and July 1, 2022.
2. Removes the Minor Discipline Section from the contract to comply with the standard practice of moving all discipline through the State Personnel Board.
3. Amends the Training Academy to provide 145 training days from approximately 27 weeks to reflect actual training requirements and provide flexibility to California Highway Patrol (HP) when scheduling the academy date.
4. Specifies that during the interim period between graduation and being placed on a first assignment, recently graduated cadets shall mandatorily use a minimum of 40 hours, and may use a maximum of up to 80, of Compensating Time Off (CTO) to assist with reducing accrued CTO hours.
5. Establishes a provision to permit CHP to develop and implement, with the concurrence of CAHP, alternate work schedules not expressly provided for elsewhere in the contract.
6. Effective the pay period following ratification, increases the lodging reimbursement rate from $125 to $140 for Alameda, San Mateo, and Santa Clara counties; and from $150 to $250 for San Francisco.
7. Eliminates the employee Physical Performance Program and Wellness Program from the contract and will relies on existing CHP policy.
8. Effective May 1, 2020, depending upon the availability of departmental funds, employees may be eligible to cash out up to 80 hours of leave credits.
9. Provides furlough and mandatory personal leave program protection for the first two years of the contract, July 1, 2019, through June 30, 2021.

Bargaining Unit 7: This bill approves the MOU between the state and BU 7, as follows:

Compensation

1. BU 7 employees shall receive the following GSI:
   1. Effective July 1, 2019, BU 7 shall receive a 2.75 percent GSI.
   2. Effective July 1, 2020, BU 7 shall receive a 2.50 percent GSI.
   3. Effective July 1, 2021, BU 7 shall receive a 2.50 percent GSI.
   4. Effective July 1, 2022, BU 7 represented classification designated Peace Officer/Firefighters (PO/FF) shall receive a 3.75 percent GSI.
   5. Effective July 1, 2022, BU 7 represented classifications designated Safety or Miscellaneous/Industrial shall receive a 2.25 percent GSI.
2. BU 7 shall receive the following SSAs:
   1. Effective July 1, 2019, BU 7 represented employees from various classifications shall receive a SSA ranging from 1.45 percent to 24 percent, depending on the classification.
   2. Effective July 1, 2020, Criminalists and Senior Criminalists shall receive a five percent SSA.
3. Expands the Public Safety Dispatcher-In-Charge pay differential to all CHP centers, and adds communication operators working at the Department of State Hospitals and the Department of Parks and Recreation. The agreement also increases the differential from $6.50 per shift to a one-step differential.
4. Increases the Fire Fighter Lead Person Assignment pay differential from $1.00 to $2.50 per hour.
5. Increases the Canine Care pay differential from $189 to $357 per month.
6. Establishes a five percent Canine Care pay differential for peace officers at the Department of Developmental Services.
7. Increases the Night Shift Pay Differential from $0.50 to $1.00 per hour.
8. Adds the CHP Communication Centers in Orange County, Ukiah, Humboldt, Chico, Ventura, San Luis Obispo, and Indio to the existing $300 per month recruitment and retention pay differential.
9. Adds specified classifications at the Department of Motor Vehicles (DMV), Department of Consumer Affairs (DCA), Department of Developmental Services, and Department of State Hospitals to the existing one-step Field Training officer pay differential.
10. Establishes a new 2.5 percent or one-step training officer pay differential for criminalists or senior criminalists serving in a training capacity.
11. Increases the Training Officer pay differential for the Motor Carrier Specialist I, CHP, from $6.50 per shift to a one-step differential per hour when serving in a training officer capacity.
12. Changes the hiring process for Seasonal Lifeguards so that they will be hired prior to orientation and Initial Entry Training, which allows them to earn service credit and be compensated for each hour worked during the 96 hours of orientation and Initial Entry Training.
13. Eliminates the $175 per period recruitment and retention pay differential for peace officers at the Department of Parks and Recreation and the Department of Fish and Wildlife.
14. Eliminates the 7.44 percent Investigator Pay Differential for Investigators at the Department of Insurance and the DCA.

Employee Pension Contributions

1. Adjusts the employee contribution rates for PO/FF A, PO/FF B, and Public Employees’ Pension Reform Act (PEPRA) PO/FF retirement formulas, as follows:
   1. Effective July 1, 2022, increases from 13 percent to 14 percent.
   2. Effective July 1, 2023, increases from 14 percent to 15 percent.
2. Effective July 1, 2023, adjusts the employee contribution rates as follows:
   1. Increases Safety A, Safety B, and PEPRA State Safety retirement from 11 percent to 11.5 percent.
   2. Increases Miscellaneous/Industrial First Tier A, First Tier B, and PEPRA First Tier retirement formulas from 8 percent to 8.5 percent.

Health Benefits for Active Employees

1. Continues the state’s monthly health benefit contribution for each employee at 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. The flat dollar amounts shall be adjusted as appropriate pursuant to the formula for January 1, 2020, January 1, 2021, January 1, 2022, and January 1, 2023.

Miscellaneous Adjustments

1. Allows the state to reopen the MOU if projected state revenues at the 2021-22 May Revision or at the 2022-23 May Revision to the Governor’s Budget are insufficient to fully fund existing statutory and constitutional obligations, existing fiscal policy, and the cost of providing pay increases to all eligible employees.
2. Adds Licensing Registration Examiners, DMV, to the mandatory overtime provision that allows approved leave (except sick leave, annual leave used as sick leave, or any other leave used for sick leave purposes) to be considered hours worked for purposes of calculating overtime.
3. Eliminates Furlough Protection.
4. Requires the state to donate 4,000 hours to the California State Law Enforcement Association’s Union Release Time Bank.

Bargaining Unit 13: This bill approves the MOU between the state and BU 13, as follows:

Compensation

1. Increases the maximum salary ranges for BU 13 classifications, as follows:
   1. Effective July 1, 2019, the maximum salary ranges will be increased by 2.75 percent.
   2. Effective July 1, 2020, the maximum salary ranges will be increased by three percent.
   3. Effective July 1, 2021, the maximum salary ranges will be increased by 2.75 percent.
2. Increases the Night Shift Differential from $1 to $2 per hour; and Evening Shift Differential from $0.90 to $1 per hour.
3. Extends the Apprenticeship Training Fund to a general training fund to include all training courses offered through International Union of Operating Engineers (IUOE).
4. Provides all BU 13 employees boot reimbursement of $82 each year or $164 every two years, for purchasing work boots.
5. Increases the annual Recruitment and Retention Differential from $2,400 to $2,600; and adds Pelican Bay, High Desert, and California Conservation Center state prisons.
6. Amends the current Wastewater and/or Water Treatment Plant (Chief Plant Operator) to receive this differential in addition to the Chief Plant Operator differential.
7. Expands the current Department of General Services San Francisco Facilities pay differential to include all departments that have employees headquartered in the Greater Bay Area (Alameda, Contra Costa, Marin, Monterey, Napa, San Francisco, San Joaquin, San Mateo, Santa Clara, Santa Cruz, Solano, and Sonoma counties); and changes the annual stipend of $2,400 per year to five percent per month.
8. Provides a $100 per month Environmental Protection Agency Section 608 Technician Certification pay differential to employees required to maintain the certification.
9. Provides a $200 per month pay differential to Caltrans Tunnels and Tubes Operators required to maintain a Class A or B commercial driver’s license.
10. Provides a Plant Experience Recruitment and Retention Differential to employees with continuous plant experience as follows:
    1. 7 years continuous plant experience provides five percent;
    2. 10 years continuous plant experience provides seven percent; and
    3. 13 years continuous plant experience provides nine percent.

Employee Pension Contribution

1. Effective after June 30, 2022, increases the employee contribution rates for State Safety retirement formulas from 11 percent to 11.5 percent of monthly compensation over $317.

Employer Contribution for Active State Employees

1. Continues the state’s monthly benefit contribution for each employee at 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 adjusted as appropriate pursuant to the formulas on January 1, 2020, January 1, 2021, and January 1, 2022.

Miscellaneous Adjustments

1. As a part of the annual leave cash out program, allows employees to defer leave accruals into 401k or 457 plans.
2. Incorporates the Wounded Warriors Transitional Leave Act, which provides up to 96 hours of additional sick leave for an employee hired on or after January 1, 2016, who is a military veteran with a service-connected disability rated 30 percent.
3. Eliminates Furlough Protection.

Fiscal Effect:

• Fiscal Year 2019-20 for BUs 1, 2, 3, 4, 5, 7, 11, 13, 14, 15, 17, 20 and 21 and their related excluded employees: $142.9 million ($50 million General Fund).
• Total Four-Year Budgetary Cost (FY 2020-21 thru FY 2023-24) for BUs 1, 2, 3, 4, 5, 7, 11, 13, 14, 15, 17, 20 and 21 and related excluded employees for BU 7: $4.9 billion ($1.8 billion General Fund).
• From 2019-20 through June 30, 2023, transfers $100 million from the MVA to make a supplemental payment to the Public Employees’ Retirement Fund (PERF).
• For 2020-21, transfers $243 million General Fund from SB 90 to make a supplemental pension payment to the state patrol member category of the PERF.

Support:

None on file.

Opposed:

None on file.

-- END --

ASSEMBLY THIRD READING

ATR Bill Id:AB 118

Author:(Ting)

As Introduced Ver:December 3, 2018

Majority vote. Budget Bill Appropriation Takes Effect Immediately

SUMMARY:

This bill expresses the intent of the Legislature to enact statutory changes relating to the Budget Act of 2019.

Major Provisions

COMMENTS:

According to the Author:

Arguments in Support:

Arguments in Opposition:

FISCAL COMMENTS:

VOTES:

UPDATED:

VERSION: December 3, 2018

CONSULTANT: Christian Griffith / BUDGET / (916) 319-2099 FN: 0000161