Legislature(2013 - 2014)HOUSE FINANCE 519
02/27/2013 01:30 PM House FINANCE
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| Presentation: Department of Administration on Contract Negotiations | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
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HOUSE FINANCE COMMITTEE
February 27, 2013
1:34 p.m.
1:34:43 PM
CALL TO ORDER
Co-Chair Austerman called the House Finance Committee
meeting to order at 1:34 p.m.
MEMBERS PRESENT
Representative Alan Austerman, Co-Chair
Representative Bill Stoltze, Co-Chair
Representative Mark Neuman, Vice-Chair
Representative Mia Costello
Representative Bryce Edgmon
Representative Les Gara
Representative Lindsey Holmes
Representative Scott Kawasaki, Alternate
Representative Cathy Munoz
Representative Steve Thompson
Representative Tammie Wilson
MEMBERS ABSENT
Representative David Guttenberg
ALSO PRESENT
Curtis Thayer, Deputy Commissioner, Department of
Administration; Nicki Neal, Director, Division of
Personnel, Department of Administration.
SUMMARY
^PRESENTATION: DEPARTMENT OF ADMINISTRATION ON CONTRACT
NEGOTIATIONS
1:35:52 PM
Co-Chair Austerman asked members to hold questions until
the end of the presentation.
CURTIS THAYER, DEPUTY COMMISSIONER, DEPARTMENT OF
ADMINISTRATION, introduced department staff. He provided a
disclaimer that any discussion on previously bargained
state contracts was not an indictment of past practices. He
relayed that all contracts had been bargained with and
agreed to by the state and parties. He added that historic
bargaining priorities may have been different than current
priorities. He provided a PowerPoint presentation titled
"Alaska Department of Administration: Understanding Labor
Contracts" dated February 27, 2013 (copy on file).
Mr. Thayer moved to slide 2 titled "Bargaining 101":
· Negotiations are mandated by the Public Employment
Relations Act (AS 23.40.070-23.40.250).
· Bargaining begins in accordance with the terms set
forth in the collective bargaining agreements but
generally commences between the months of October
and December.
· The State must negotiate and enter into written
agreements on matters of wages, hours and other
terms and conditions of employment. These are
considered mandatory subjects of bargaining.
o For example: cost of living increases, merit
increases, pay increments, leave accrual,
health insurance
· The State may, but is not required, to negotiate
permissive subjects of bargaining.
o For example: classification, benefits for
retirees, representation of non-permanent
employees
· Monetary terms of the agreement must be submitted to
the Legislature no later than the 60th day of the
legislative session to receive consideration during
that calendar year (AS 23.40.215).
Mr. Thayer elaborated that current contract negotiations
had commenced in October 2012 for the General Governmental
Unit (GGU) and in January 2013 for the Supervisory Unit
(SU). He added that the state was currently negotiating
with both units. The department and unions were working
together to submit their monetary agreements to the
legislature by the March 15, 2013 deadline. He noted that
the legislature was not required to look at the monetary
terms if they were not provided by the deadline.
1:39:15 PM
Mr. Thayer continued to discuss Bargaining 101 on slide 3:
· If negotiations do not lead to agreement and
mediation fails, employees (except protective
service personnel) have the right to strike.
· Employees who are on strike do not get paid, but may
not be terminated because they choose to lawfully
strike.
· Striking employees may be replaced - either
temporarily for the duration of the strike, or
permanently under certain circumstances.
· Our goal is to reach a fair and balanced agreement.
Contracts are…
· three years in duration
· typically bargained by the State on a cycle of 3-5
separate agreements each year (see next slide for
detail
Mr. Thayer expounded that contracts were required to be
negotiated at least every three years. He relayed that the
department was negotiating with two-thirds of the state
employees in the current year including GGU (8,500
employees), SU (2,200 employees) and the Confidential
Employees Association (CEA).
1:40:32 PM
Mr. Thayer turned to slide 4 titled "Bargaining Units
(BU)":
Contracts That Expire on June 30, 2013 Number of
Employees
ASEA Alaska State Employees Association
(GGU) 8,231
APEA Alaska Public Employees Association
(Supervisory Unit (SU)) 2,219
CEA Confidential Employees Association 192
Contracts That Expire on June 30, 2014
AVTECTA Alaska Vocational Technical Center
Teachers 39
IBU Inlandboatmens' Union of the Pacific 654
MEBA Marine Engineers Beneficial
Association 99
MMP Masters, Mates and Pilots 97
PSEA Public Safety Employees Association 487
Contracts That Expire on June 30, 2015
ACOA Alaska Correctional Officers
Association 777
LTC Public Employees, Local 71 1,675
TEAME Teachers' Education Association
of Mt. Edgecumbe 29
Non-Covered Exempt, Partially Exempt
and Excluded 1,359
Mr. Thayer noted that the numbers provided on slide 4 were
from June 30, 2012. He explained that the non-covered
exempt positions included commissioners, deputy
commissioners, directors, and the majority of the
Department of Law (DOL).
Mr. Thayer discussed the average annual base salary
excluding benefits on slide 5. Salaries varied broadly
depending on the association; average annual pay was
$55,000 for GGU members, $80,000 for SU members, $75,000
for the Alaska Vocational Technical Center Teachers, and
$50,000 to $85,000 for the various maritime unions. The
average employee benefits accounted for an additional 49
percent on top of wages. For example, including benefits
the average SU pay was close to $120,000 and the average
GGU pay was close to $80,000. The average annual salary for
the non-covered employees (DOL attorneys and the executive
branch) was $96,000.
Mr. Thayer directed attention to slides 6 through 8 titled
"Contract Negotiations Now Underway." Slide 6 provided
detail on GGU which had 8,941 budgeted positions (the 8,231
figure listed on slide 4 represented a snapshot of the
number of employees on payroll on June 30, 2012). Other GGU
statistics included an average member age of 44, an average
service of 7.87 years, a $55,000 average annual salary for
full-time employees, and a total FY 12 gross pay for all
members of $414 million. He noted that the gross pay
figures excluded benefits. Slide 7 included the information
for SU. Statistics included a membership total of 2,240, an
average member age of 49, an average service of 13.69
years, an average annual salary for full-time employees of
$76,638, and $173 million in total FY 12 gross pay for all
members. Shown on slide 8, the CEA included a membership
total of 201, an average member age of 42, an average
service of 8.26 years, a $55,000 average annual salary for
full-time employees, and a total FY 12 gross pay for all
members of slightly under $10 million.
1:44:15 PM
Mr. Thayer looked at slide 9 titled "Monetary Terms." One
portion of the monetary terms found in collective
bargaining agreements was the cost of living increase. He
detailed that a general wage increase was provided to all
bargaining unit members typically effective on July 1 of
every year of the agreement. Beginning around 2008 the
state had changed the system to include merit increases and
pay increments. He explained that pay scale merit steps
went from "A" to "F"; statute designated that employees
received a 3.5 percent raise on an annual basis for
approximately the first 6 years of state service. Once an
employee reached the "F" step they received a 3.75 percent
pay increase every two years. He noted that the merit
increases were provided in addition to the cost of living
increases.
Mr. Thayer discussed how merit increases and pay increments
factored into overall costs (slide 10). He used GGU as an
example and explained that granting a 1 percent increase in
FY 14 would cost approximately $6.6 million; however,
cumulatively over three years the increase would cost
approximately $46.7 million. Merit increases and pay
increments were valued at approximately $15 million in FY
14, with a cumulative total over three years of
approximately $105 million. He detailed that a 1 percent
increase added to the merit increases and pay increments
would mean an additional $150 million in the budget over
three years. The slide also included the detailed
information for the SU and CEA. The cumulative total over
three years was approximately $60 million for SU and
approximately $3 million for CEA. He relayed that the
figures did not reflect vacancies or employee turnover. He
communicated that employees hired to fill vacant positions
would not be hired at the same wage as their predecessors
(new hires were typically paid a lower wage).
1:47:05 PM
He turned to slide 11 related to understanding increases
over time. The slide provided a snapshot of a state
employee's salary. He detailed that if the employee had
been hired in 2006 they would have received a 38 percent
pay increase by 2012 due to cost of living increases and
merit/longevity steps. He explained that an employee with a
"G" step in 2006 would have received a 28.25 percent pay
increase by 2012 with pay increment increases occurring
every other year. The slide also showed the Consumer Price
Index increase from 2006 to 2012; the increase averaged
18.3 percent. He relayed that Alaska was one of the only
states that granted annual raises for state employees
during the past six years. He elaborated that Florida had
not provided pay increases for six years and that some
states had reduced wages.
Mr. Thayer addressed slide 12 titled "Leave." He detailed
that employees with zero to two years of state service
received 24 days of leave per year and employees with over
ten years received 36 days. He noted that leave included
personal and sick time; in 2000 the bargaining units had
combined separate sick leave and vacation time systems into
one leave system. He detailed that previously there had
been a cap on leave accrual; however, the cap had been
removed in 2000. Currently employees were required to use
one week of leave per year. He noted that employees earning
36 days of leave per year could earn a substantial amount
of leave given the requirement to only use 5 days per year.
Additionally, employees could cash-in unlimited leave
providing they maintained a balance of 37.5 hours. Leave
was valued at an employee's current rate of pay with the
exception of non-covered employees. He expounded that if an
employee had worked for the state for 10 years any accrued
leave would be valued at their current rate of pay.
However, leave for non-covered and exempt employees was
valued at the rate of pay at the time it was accrued.
Mr. Thayer continued to discuss leave on slide 12. He
explained that there was a working reserves account in
statute that was used for funding the payment of leave
cash-ins and accrued leave upon separation from employment.
He relayed that in 2012 the state had made leave payments
to employees totaling $36 million.
1:50:49 PM
He directed attention to a bar graph on slide 13 titled
"Growing Leave Liability." The increasing leave liability
was currently $164 million. The leave liability was growing
by approximately $6 million to $10 million per year; when
pay increments and cost of living increases occurred, the
leave cost grew. He noted that many employees viewed their
leave investment as a bank account. He pointed to a leave
liability example for the state's top ten employees on
slide 14. He communicated that the ten employees had a
combined personal leave balance of 34,500 hours, which was
valued at $1.6 million. The slide included the annualized
hourly leave rate that varied by employee. He noted that a
CEA employee had the highest leave balance (4,400 hours),
but due to their wage structure the employee's leave value
was lower than that of an employee with a lower leave
balance but with a higher hourly rate. He emphasized that
the leave balance was a substantial liability to the state.
The state had worked with the three bargaining units on the
issue. He shared that the state had discussed putting a cap
on leave and the possibility of implementing new accrual
ratings. He stressed that the issue had become the "800-
pound gorilla in the room" in the past six months. He
reiterated that employees were only required to use one
week per year. He noted that the ten employees shown on
slide 14 were probably earning 36 days or close to 36 days
of leave per year.
Mr. Thayer addressed a health insurance graph on slide 15.
The red bars showed the state's contributions to the active
employees' health plans (the list of health plans were
shown on the right of the slide). He pointed out that the
state's healthcare contribution was growing significantly.
There were approximately 8,000 active employees in the
state benefit plan. He relayed that the state did not
directly insure all of its employees. He detailed that some
bargaining units used a health trust; GGU and APEA had
health trusts, and the Public Safety Employees Association
used a third-party insurer. The state was required to make
an annual health insurance contribution of $15,960 per
employee (the amount was included in the 49 percent average
employee benefit figure on slide 5). The state's annual
health insurance contribution to the GGU union was $16,506
in FY 13. He relayed that Alaska was one of the four states
that covered the full premium for the basic family plan
(100 percent contribution to the economy plan).
1:54:40 PM
Co-Chair Stoltze asked the department to elaborate on slide
15. Mr. Thayer replied that in 2001 the state had
negotiated with GGU to leave the state healthcare plan and
to create a trust fund. The state paid the annual $15,960
per employee and an additional $600 per employee per year.
He relayed that using the trust fund cost the state an
additional $4.5 million. The state had discussed the idea
of bringing 8,000 employees back into its healthcare plan
to save money and to increase its market share, which would
provide a more cost effective deal.
Co-Chair Stoltze noted that with insurance, the larger the
pool of insured individuals, the better the deal was. He
surmised that there was a good deal for one group, but that
the average state employee may get the better deal. Mr.
Thayer responded that the state was paying $4.5 million
more into the GGU health trust than it was for state
employees for roughly the same benefit package.
Mr. Thayer turned to slide 16 titled "National Trends":
· Little to no pay increases since 2007
· Extensive furlough of employees
· Extensive layoffs
· Freezing of longevity pay
· Increase in subcontracting -"managed competition"
· Limitations on "legacy" costs such as pensions, sick
or vacation "buyback" upon retirement, and other
such long-term costs
· Greater operational flexibility, to provide more
service at the same or lesser cost to taxpayers and
citizens
Mr. Thayer elaborated that the extensive layoffs had begun
in 2008 going forward. He turned to slide 17 titled
"Department of Administration's Bargaining Priorities and
Concerns":
· Fiscally prudent cost of living increases
· Reducing the cost of longevity steps (i.e. pay
increments)
· Reducing the legacy costs of leave liability
· Operational productivity improvements
· Obtain voluntary, balanced agreements
· If a strike occurs, continue to provide essential
services to citizens
Mr. Thayer expounded that the state could not afford to
have large cost of living increases. He noted that a
reduction in the cost of longevity steps would have to be
negotiated in statute. He reiterated that the current leave
liability was $164 million and that ten of the state's
employees had 34,000 hours in accrued leave. He emphasized
that the state had 16,000 employees and arresting the
growing leave liability was necessary. The state's goal was
to negotiate agreements that the unions and the legislature
were both comfortable with. He relayed that a strike
situation was a last resort to the state.
1:59:19 PM
NICKI NEAL, DIRECTOR, DIVISION OF PERSONNEL, DEPARTMENT OF
ADMINISTRATION, addressed slide 18 titled "Next Steps." She
discussed that once monetary terms were agreed to DOA
submitted them to the legislature for appropriation. She
explained that if the legislature failed to fund the
monetary terms of an agreement the next steps varied by
bargaining unit and the action taken could be affected by
whether or not the terms were submitted in a timely manner
(by the 60th day of legislative session; March 15 in the
current year). She communicated that if the legislature
failed to fund the agreement, an impasse was considered to
exist for some units and others had 10 days to reach an
agreement. She stressed that each situation was evaluated
and was fact specific; contract language varied between
units. She stated that the fact that the monetary terms of
the parties' agreement could potentially be submitted to
the legislature after the 60th day of session did not
prevent the legislature from either considering or funding
them. Additionally, the appropriation was subject to the
ratification of the collective bargaining agreement by the
union's membership. She detailed that appropriated funding
was proportionately reduced if the unions did not ratify
the agreement.
Ms. Neal directed attention to a bargaining "road map" flow
chart on slide 18. She relayed that the ideal process began
with negotiation and was followed by a voluntary agreement,
the submittal of monetary terms to the legislature, and the
funding of monetary terms through legislative
appropriation. If the legislature failed to fund the
monetary terms, some contracts specified that an impasse
existed; whereas others required the state to return to
negotiations for a specified period of time. In the case of
an impasse, the state often entered into mediation;
interest arbitration was entered into if mediation was not
successful for Class I employees (i.e. troopers,
correctional officers, and other). It was the state's
position that it was not required to go to interest
arbitration with units with a mixed membership (i.e. units
that were not solely Class I) until the membership voted to
strike. In the event of an impasse the state could choose
to implement its "last best offer"; however, any monetary
terms were subject to appropriation. She stressed that
situations were evaluated on a case-by-case basis.
2:02:55 PM
Co-Chair Austerman referred to slide 16 and asked what the
term "managed competition" meant. Mr. Thayer answered that
the concept was being implemented on a national level; it
put public employee unions in competition with the private
sector on a given project or function. For example, tree
cutting services in Chicago had previously been done in
parks by state employees; however, the contract was awarded
to the private sector due to its more competitive bid. He
stated that the citizens appeared to be getting the best
contracts.
Representative Wilson pointed to slide 15 and asked if the
state paid $15,960 per employee for all unions except one.
Ms. Neal answered in the affirmative; the state only paid
more for GGU members.
Representative Wilson asked whether step increases were the
same under each union. Ms. Neal answered that pay
increments were all at 3.75 percent; however, the
percentages between A through F varied even within a union.
For example, the GGU schedule varied between slightly over
3 percent and 4 percent. The 3.75 percent was an average
increase between each step.
Mr. Thayer added that maritime unions had a different
contract and pay scale than the one used for non-covered
employees and the majority of the bargaining units.
2:05:36 PM
Representative Gara discussed insurance premiums for
families. He wondered whether an employee only paid a
specific amount for insurance (regardless of the number of
people in a household) and the state picked up the
remainder. Ms. Neal answered that there were not different
premiums for single people versus families for employees
covered under the state's Select Benefits plan.
Representative Gara asked about the logic behind the state
paying for health insurance for all of a state employee's
family members. Mr. Thayer replied that the policy had been
negotiated with unions. He agreed that the issue (the same
premium was paid for single employees and for employees
with a family of four) needed to be looked at in the light
of growing healthcare costs.
Representative Gara believed paying the same premium for
individuals and families was absurd. He wondered why the
state had not looked into the issue. Mr. Thayer answered
that healthcare was a large issue. He elaborated that the
state had looked at costs between its economy, standard,
and premium plans. The state was also looking at high
deductible plans and others that could potentially level
the playing field. He stressed that the administration and
DOA Commissioner Becky Hultberg had been prudent in their
effort to look at ways to reduce healthcare costs. He
emphasized that some of the plans had been in place for 20
to 30 years. He agreed that it was necessary to look for
alternative options.
Representative Gara asked the state to do something about
the situation. Mr. Thayer affirmed that the administration
wanted to do something about the issue.
Representative Gara felt that DOA was saying it had not
negotiated contracts that it wished it had. He thought
negotiating the contracts as prudently as possible was the
department's job.
Mr. Thayer responded that the department was not saying the
contracts were good or bad. He stated that unions were a
"creature of statute" and that the state operated under
PERA [Public Employment Relations Act]; the contracts were
successive and he did not know what bargaining priorities
had been 20 years earlier and where they should be
currently. He highlighted that the state currently had a
very lucrative plan for its employees including merit
increases, health insurance, and leave balances. He
compared the issue to a large ship that the state was going
to slowly turn. He hoped that when the legislature looked
at the negotiated terms that the focus would expand beyond
the cost of living allowance. He stressed focusing on
whether the state was "turning the tide" on leave balances
and accrual rates and looking at the cost of living,
longevity, and health insurance costs. He emphasized that
the existing contracts were not bad. The current goal was
to present what the department thought a good contract
would look like. He reiterated that he believed a good
contract in the future would begin addressing long-term
leave accrual costs, implementing a cap on leave,
reasonable cost of living, reducing longevity steps, and
other. He discussed that negotiating sick leave out of the
state contracts had been beneficial; Alaska had been one of
the first in the country to make the change. Why the state
had not negotiated to put a cap on the leave was unknown to
him; therefore, it was currently necessary to address the
issue.
2:11:38 PM
Representative Kawasaki asked if the increasing state
contributions to active employee health plans (slide 15)
matched healthcare cost increases. Mr. Thayer replied that
some of the state's costs were not rising as quickly as
those in the broader healthcare arena; whereas, others were
higher. He detailed that over the past couple of years the
state had only seen a single digit increase in healthcare,
while prior to that the state had seen double digit
increases in other years. He elaborated that the increases
were fluctuating, but the state was working to keep the
healthcare costs down. He believed the state was at or
slightly below the national average.
Representative Kawasaki rephrased his question and asked
whether the figures on slide 15 roughly reflected the costs
in healthcare from 2001 to 2012. Ms. Neal believed so. She
elaborated that the figures on slide 15 represented the
state's contribution to health plans; contributions were
based on claims history. She would confirm the answer with
the Division of Retirement and Benefits.
Representative Kawasaki wondered whether the first bullet
point on slide 16 ("little to no pay increases since 2007")
was an ongoing trend. He referred to a recent copy of the
Stateline legislative magazine that showed improved budgets
(e.g. an 8 percent increase in Indiana's public employee
contracts).
Ms. Neal had answered that she had recently attended the
National Association of State Personnel Executives meeting.
She relayed that Alaska was one of two states out of the 22
in attendance that had continued to provide pay increases.
Delaware had provided increases in the past several years;
however, the governor had not included the increases in the
current budget. She expounded that Louisiana and one other
state had planned to provide increases in the current year
for the first time in several years. She elaborated that
the other states had not provided cost of living increases
and very few had provided merit steps. Additionally, many
states had furloughed employees or had lain off thousands
of workers.
2:15:29 PM
Representative Kawasaki asked whether the state used the
market rate for its employment positions and whether it
compared to similar private sector positions on a statewide
and national level.
Ms. Neal answered that the state did not have a practice of
comparing and setting state salaries for individual job
classes based on market. She detailed that DOA had done a
market survey in 2009 for the first time in many years. The
survey had looked at 174 benchmark job classes; it had
determined that 11 classes potentially had not paid enough.
The state looked into the 11 classes and found that it was
not having recruitment difficulty and was not forced to
offer advanced step placement upon hire; it had also looked
at several other factors and had decided that the results
did not warrant raising salaries. Currently the state had a
contractor reviewing classification pay plans to determine
future options.
Representative Kawasaki referred to recent Department of
Revenue testimony that it had been unsuccessful in
recruiting for vacant auditor positions. He noted that
other agencies had testified on unsuccessful efforts to
hire accountants. Ms. Neal replied that she had misspoken.
She explained that the full market survey had been
conducted in 2009; however, around 2006/2007 the state had
implemented a program called market-based pay. She detailed
that the program had been difficult to manage and had
created some inequities; therefore, it had been
discontinued. During the same time the state had conducted
a survey on job classes that had extreme recruitment
difficulty; oil and gas auditors had been one of the
classes and had subsequently received a pay increase.
2:18:07 PM
Representative Thompson asked what would happen if the
monetary terms of a contract agreement were not submitted
to the legislature by the 60th day of session and the
legislature chose not to address the contracts. Ms. Neal
believed that legislative action on the contracts would be
delayed until the following year if the legislature did not
act prior to the end of session. She added that a
retroactive implementation of the updated contract terms
may be required under the scenario.
Co-Chair Stoltze was interested in the increasing $164
million leave liability. He asked about potential exposures
in the budget process. He referred to an ongoing
conversation with members of his district who believed the
state was awash in money, that it could chose to implement
an income tax, that the permanent fund was large, and that
the state should fund members' contracts. He wondered
whether the discussion had occurred with bargaining units.
Mr. Thayer replied that he had been involved with GGU and
SU negotiations; Ms. Neal had been involved with the CEA
negotiations. He relayed that some of the same
conversations had occurred at the bargaining table. He
continued that John Boucher [Senior Economist, Office of
Management and Budget, Office of the Governor] had
presented on oil production, the price of oil, and what
occurred when the items went up or down. He believed it had
been helpful to begin negotiations with a discussion about
how a drop in the price of oil impacted state spending.
There had also been positive dialogue with the unions
related to leave accruals and potential leave cap; the
unions understood the increasing liability. Additionally,
the state had discussed rising healthcare costs and
reasonable cost of living allowances. He noted that the
state was still working out what a reasonable cost of
living allowance was. He believed the negotiations had been
productive and that the legislature would see meaningful
contract terms. He relayed that they had taken a break in
current negotiations to present to the House Finance
Committee. He hoped to have something to the legislature
prior to March 15, 2013.
2:22:55 PM
Co-Chair Stoltze had been told that some of the bargaining
units were on a 40-hour workweek as opposed to the more
common 37.5-hour state workweek. He asked for detail on how
the issue impacted bargaining. Ms. Neal responded that
there were 11 different bargaining units plus the non-
covered employees. She detailed that state troopers worked
a 40-hour week and correctional officers worked a 42-hour
week. She noted that the employees were compensated
accordingly. She communicated that marine and teacher
unions were slightly different as well. The average state
employee including GGU, non-covered, SU, CEA, and Public
Employees (LTC) all worked a 37.5-hour week. She added that
the state paid overtime for many employees when they worked
above 37.5 hours per week. She relayed that the state paid
additional straight-time for a smaller number of employees
working between 37.5 and 40 hours, with overtime paid after
40 hours.
2:24:42 PM
Representative Wilson asked whether contracts could be tied
to oil production. Mr. Thayer replied that the department
had discussed the idea internally prior to entering
negotiations. He discussed that the concept would be
difficult given various factors including the price of oil,
production, and any mechanical issues that may occur with
the pipeline; therefore, DOA had experienced difficulty
determining how the concept would be structured.
Additionally, it was hard to determine how to tie the issue
to employees; the state needed the employees to come to
work and the idea of tying them to something they had no
direct involvement in would be difficult.
Representative Gara pointed to slide 19 and asked whether
management members of the executive branch accrued an
unlimited amount of leave. Mr. Thayer responded in the
affirmative; however, because the positions were
politically appointed, the employees were not necessarily
accruing leave as fast as some employees. He noted that the
leave for non-covered, executive branch employees was
valued at the rate it was earned whereas; union employee
leave was valued at their current salary. He added that the
executive branch expected union negotiations to apply to it
as well.
Representative Gara suggested that it may be easier to
negotiate a cap on leave for union employees if the non-
covered employees had a cap on leave accrual.
Mr. Thayer replied that the state intended to implement the
same accrual of leave, cap, cost of living allowance, and
health insurance for both non-covered and union employees.
He added that the executive branch typically followed
structure outlined in negotiated union contracts.
2:28:27 PM
Representative Munoz asked about overtime savings that
would occur if the 37.5-hour workweek was changed to a 40-
hour workweek. Ms. Neal replied that the question was
difficult to answer. She communicated that some employees
received overtime pay for anything above 37.5 hours; if
their hours were increased to 40 per week it would have to
be determined whether the employees would be compensated
for the additional 2.5 hours, which equated to an increase
of approximately 6.3 percent. She relayed that DOA did not
currently have the figure and would need to look into it.
Mr. Thayer added that the 37.5-hour workweek dated back to
1955; the workweek had been negotiated down from 40 hours
per week to 37.5 hours in lieu of a furlough.
Representative Munoz inquired if the department could share
some of its proposals related to a potential cap on leave.
Mr. Thayer replied that the state was currently in
discussions with unions on a potential leave cap. He
declined to comment on specifics given the current union
negotiations that were underway.
Representative Munoz queried how a cap on leave would
impact employees who could not take more than a few days
off at a time, given the critical nature of their duties.
Mr. Thayer replied that the department had been looking at
the cap and increasing the required usage of leave per
year. He stated that generally employees should find the
time to take the necessary leave. He elaborated that
employees had earned the usage of the time and should be
allowed to take leave for their own mental health. He
provided an example of businesses that required mandatory
leave. The state was not discussing mandatory leave with
the unions, but it was discussing how to increase the
usage. The state needed to work with supervisors on giving
employees leave approval; it would keep costs down and
would give employees increased time off.
Co-Chair Austerman discussed the schedule for the following
week and the following day.
ADJOURNMENT
2:33:56 PM
The meeting was adjourned at 2:33 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| DOA-LaborContracts2013(02-27-13)HouseFinance_Print.pdf |
HFIN 2/27/2013 1:30:00 PM |
DOA Labor Contracts Presentation |
| PERS-TRS Health Cost Trends.pdf |
HFIN 2/27/2013 1:30:00 PM |
Response HFIN Labor Contracts 2/27/13 |
| DOA-LaborContracts2013HouseFinance_Pg15.pdf |
HFIN 2/27/2013 1:30:00 PM |
Response HFIN Labor Contracts 2/27/13 |
| DOA Response - House Finance - Understanding Labor Contracts - 27Feb13.pdf |
HFIN 2/27/2013 1:30:00 PM |
Response HFIN Labor Contracts 2/27/13 |
| Alaskas Health-Care Bill.pdf |
HFIN 2/27/2013 1:30:00 PM |
Response HFIN Labor Contracts 2/27/13 |