SENATE BILL NO. 31 "An Act relating to compensation, merit increases, and pay increments for certain public officials, officers, and employees not covered by collective bargaining agreements; and providing for an effective date." 2:35:58 PM LESLIE RIDLE, DEPUTY COMMISSIONER, DEPARTMENT OF ADMINISTRATION, introduced herself. KATE SHEEHAN, DIRECTOR, DIVISION OF PERSONNEL and LABOR RELATIONS, DEPARTMENT OF ADMINISTRATION, introduced herself. Ms. Sheehan discussed the question and answer memo dated April 4, 2017 (copy on file): 1. Senator Bishop asked how long it would take an employee to get to the end of the alphabet? It would take approximately 39 years to get to the end of the alphabet, assuming that an employee remained at the same range and on the same base salary schedule the entire time. 2. Senator Von Imhof asked how long it would take to double an employee's initial salary? It would generally take 37-40 years to double the initial salary (remaining at the same range and schedule) and assuming no COLAs. However, assuming an annual COLA of 1 percent, the employee's initial salary would be doubled in about 23-24 years. Assuming an annual COLA of 1.33 percent (to somewhat mimic a 1-1-2 agreement), the salary would double in about 20- 21 years. Again, this assumes that the employee stays at the same range and on the same schedule. 3. Senator Bishop asked what the attrition rate is for non-covered employees? Please see the attached report titled "Copy of EX EE and PX Separation Rates". 4. Senator Bishop asked the total salary cost for non- covered employees? The payroll of the non-covered people in the salary bill is $370 million with the University (but excluding the Legislature, Courts and AMHS). 5. Senator Dunleavy asked the total of personal services for the State? Salaries of employees for which we have budget position detail is $1.8 billion (excludes University, Legislature, Courts and AMHS). Salaries of ALL employees is $2.4 billion (includes University, Legislature, Courts and AMHS). 6. Senator Bishop asked the number of employees at each range and each step? Please see the attached report titled "Copy of XE Emp Counts". You will notice on this report that there are terms such as "inapplicable" and many employees at a range 0. "Inapplicable" refers to employees that do not use a standard schedule (e.g. Governor and commissioners). There are several instances where PCNs at a range 0 appear to be filled by multiple employees: o 07-4550 Sub Teacher AVTEC 35 entries o 01-501SF, 01-501SA, 01-501SG Election Translator 18 entries o 01-505YF, 01-505YJ, 01-505YW, 01-505YN Election Official 11 entries o 05-0065 Sub Teacher Mt. Edgecumbe 64 entries Senator Dunleavy asked for an "At Ease." 2:40:47 PM AT EASE 2:41:31 PM RECONVENED 2:41:33 PM Senator Dunleavy noted that the governor could hire beyond step F, with the proper written determination of extraordinary need. He also noticed that there were no restrictions for hiring between steps A through E. Ms. Sheehan remarked that the personnel rules governed whether someone could be hired above step A. She stated that one could be hired through step F, if there were exceptional qualifications and/or recruitment difficulties. Senator Dunleavy wondered whether the governor was required to make a written determination for hiring between steps A through E. Ms. Sheehan replied that the governor did not need to make a written determination for hiring between A through A. She stated that any hiring at a pay increment for steps J or higher would need a written determination. Senator Dunleavy surmised that there would still be a salary override, but no written explanation was required for steps A through E. Ms. Sheehan responded that the appointing authority must show that there were recruitment difficulties and/or exceptional qualifications. Ms. Sheehan continued to discuss the document: 7. Senator Dunleavy asked for the number of non- covered employees on salary overrides and advanced step placement? Attached is a report titled "Executive Branch Employees with Rate Overrides" as well as the report which shows all non-covered employees hired above A step. If a job class isn't listed, then that position did not include anyone hired above A step. Regarding the override report, there are many reasons why an employee may be paid on a rate override such as commissioner's pay since it is set by the State Officers Compensation Commission and doesn't necessarily correlate to a range or step on the salary schedule. Regarding the report of non-covered employees hired above A step, it's also important to note that some of these employees had earned that step at that range already so can be appointed back at that same step under the Personnel Rules. Therefore, these may not all be due to the advanced step placement rules. To provide some clarification, advanced step placements, for partially-exempt employees, can be granted in three ways: o Under the Personnel Rules for recruitment difficulties (2 AAC 07.320) o Under the Personnel Rules for exceptional qualifications (employees can be placed on the highest merit step, F step, if both recruitment difficulties and exceptional qualifications are found) o AS 39.27.011(k) allows the Governor to authorize a step higher than F if the determination is made that the action serves a critical governmental interest of the state, the employee possesses exceptional qualification, recruitment difficulties exist, or the action is necessary due to competitive salaries in the relevant labor market. Senator Dunleavy wondered whether the document contained the salary overrides. Ms. Sheehan replied in the affirmative. Senator Dunleavy queried the estimator in the packet. Ms. Sheehan replied that there were over 2000 salary overrides. Ms. Sheehan continued: 8. The Committee requested to know the number of hires since the hiring restriction went into effect in January, 2016? Please see the report titled "State Employment Statistics for 2016". 2:46:35 PM Vice-Chair Bishop asked for a restatement. Ms. Sheehan replied that the last report was the State Employee Statistics for 2016. She noted that the department was down 804 employees, but reduced by 2500 positions. Vice-Chair Bishop queried the department exemptions of the hiring freeze. Ms. Sheehan agreed to provide that information. Senator Dunleavy wondered whether the discussion was for a "restriction" or a "freeze." Ms. Sheehan replied that it was a restriction. Senator Dunleavy asked whether hiring was occurring. Ms. Sheehan replied in the affirmative. Vice-Chair Bishop noted the exempt positions that were not included in the restriction. Senator von Imhof asked for more information about the employee reduction of 804 and the 2500 positions. Ms. Sheehan agree to provide that information. Senator Dunleavy queried a definition of "people." Ms. Sheehan agreed to provide that information. Vice-Chair Bishop requested a breakdown by department. Senator Dunleavy agreed. 2:50:09 PM JULI LUCKY, STAFF, SENATOR ANNA MACKINNON, explained the fiscal notes. Vice-Chair Bishop wondered whether the employees had received a pay freeze or cut before the bill. Ms. Sheehan replied that there were not any freezes on merit increases or pay increments. She remarked that the administration did not give any cost of living allowances. 2:53:53 PM AT EASE 2:54:04 PM RECONVENED SB 31 was HEARD and HELD in committee for further consideration.