Wage & Benefit, Retirement Update posted 2/2/2010

Please read below for details on these most pressing concerns and see what MAGE is doing for you.

February 2, 2010

TO: ALL MAGE-OPEIU MEMBERS & BOARD MEMBERS

FROM: Dale L. Threehouse, President

SUBJECT: UPDATE ON CURRENT ISSUES

I want to assure all members that MAGE-OPEIU Local 2002 is diverting all resources towards addressing these latest assaults on our pay and benefits. There is no question that these latest attacks, if allowed to stand, will drastically diminish the standard of living of the great majority of MAGE-OPEIU members for the rest of their professional lives and throughout their retirement years.

MAGE-OPEIU is currently embroiled in two key battles:

1. The Administration’s efforts to cancel the 3% raise previously agreed to for October 2010, while maintaining those raises for our subordinates in the rank and file.
2. Recommendations negatively changing the defined benefit retirement benefits.

Update On Retirement Issues

Governor Granholm will soon be proposing modifications to the defined benefit retirement for the State Employee Retirement System (SERS) and Michigan Public School Employee Retirement System (MPSERS).

Modifications will include a small carrot for retiring by a date certain (possibly July 1, 2010):

And a large stick for those not retiring by the date certain:

While MAGE supports early retirement legislation, this plan could prove detrimental to many MAGE members.

Specifics of this plan will be circulated in the near future. Your input and suggestions will be essential in determining how to address this issue.  Write comments or suggestions to:  mailto:jdetizio@mage.org

Below is the letter to the governor, and the unfair labor practice charge filed February 1st.  

January 19, 2010

Governor Jennifer M. Granholm

P.O. Box 30013

Lansing, MI 48909

Dear Governor Granholm;

As President of the Michigan Association of Governmental Employees- Office & Professional Employees International Union Local 2002, I must most vehemently object to inequitable and discriminatory treatment of the non-exclusively represented employees (NEREs) of the State of Michigan by the Office of State Employer (OSE) and your administration.

As a union which represents over 1600 NEREs, the vast majority of whom are the supervisors, managers and confidential employees that actually oversee the day to day operations of state government, our organization and members understand the severe budget and economic crisis facing Michigan, we also believe that cost cutting measures should be applied where needed in an equitable manner.

In 2007 MAGE and two other Limited Recognition Organizations, the Association of State Executives in Michigan and the State Police Command Officers Association, entered into a signed Consensus Agreement (copy enclosed) with the Office of State Employer. As part of this three year agreement we acceded to increases in the health insurance co-pays and reductions in benefits in exchange for a no pay increase in FY2009, a 1% increase in FY2010 and a 3% increase in FY2011. Now the OSE is violating that agreement by recommending that there be no compensation increase for "MSCs and NEREs ONLY "for FY2011. In the 2007 Consensus Agreement the first paragraph specifically states in part, "The Parties further agree that, except as provided in this Consensus Agreement, they will not submit any proposals to the Employment Relations Board for such employees for Fiscal Years 2009, 2010 or 2011 without the mutual written consent of all parties." None of the LROs have agreed to removal of the 3% increase for NEREs which was agreed to take effect on October 1, 2010.

We are in no way suggesting that our brothers and sisters in the bargaining units with signed contracts not receive the 3% raises that they have negotiated and ratified in their collective bargaining agreements. It is our position that our agreement is also a binding contract with your administration and must be honored along with the bargaining unit contracts.

You may not know that a serious morale problem has been festering through the ranks of your supervisors and managers. One of the reasons for this is due to the inequitable treatment of the supervisors. As an example, in the Department of Corrections, our supervisors received 6 furlough days while their subordinates not only did not receive furlough days, but were paid overtime in many instances, to serve as acting supervisors. Furthermore, a recent change in computation of overtime resulted in subordinates receiving overtime pay for working 16 consecutive hours in a pay period where sick leave is used while a supervisor in the same situation does not receive overtime pay.

Once again the NEREs are taking on a bigger share of the cost cutting. Already many of the corrections officers and nurses are compensated more than their supervisors due to pay compression and overtime. Add to this the fact that their subordinates have more protections regarding assignments and fewer responsibilities; you wonder why any of them remain supervisors. Many of these same supervisors are even requesting demotions to rank and file positions.

You can only ignore these inequities for so long until something is going to break and you will be unable to fill these supervisory positions. Your choice should be clear, granting a wage increase for the rank and file while denying it for the supervisors and managers who were promoted because of their hard work and dedication is not fair and only exacerbates a morale problem that has been festering within the ranks of supervisors and managers for a long time.

I will be ready and available to meet with you at any time to further discuss this gross inequity in the treatment of our members and a very important group of your employees.

Sincerely,

Dale L. Threehouse, President

MAGE-OPEIU Local 2002, AFL-CIO

c: Sharon Bommarito, Director, Office of State Employer

Mark T. Gaffney, President, Michigan State AFL-CIO

Michael Goodwin, International President, OPEIU

MAGE-OPEIU Local 2002 Board of Directors

3% RAISE IN JEOPARDY!

IMPORTANT NOTICE FOR STATE OF MICHIGAN NERES

This means that your subordinates will receive a 3% raise in October 2010 

and you will not!

"The fact that we are on the brink of having more concessions forced upon the managers and supervisors who have given more, and worked harder to get promoted only to be treated worse than their subordinates again is a travesty"  said MAGE President, Dale Threehouse.

Coordinated Compensation Proceedings Position Statement

Coordinated Compensation Proceedings FY 2010-2011

 Response to the Position of the Office of the State Employer

Received December 21, 2009

This position statement is the MAGE response to the OSE position statement received by MAGE on December 21^st  indicating that, “…there should be no compensation increases for MSCs and NEREs only”. 

We should begin by informing the board that our MAGE members understand that we face a $1.2 billion budget deficit in the coming year. Our members, the managers and supervisors who have kept this state running during these most trying times, are also aware of the unemployment rate in Michigan. In fact many are working harder than ever at the Unemployment Insurance Agency assuring that the unemployed are receiving their assistance. Some may wonder how these employees would have the audacity to take umbrage to the rescission of a negotiated 3% raise when so many of their neighbors would be happy just to have a job. The board also may be wondering how such a deep-rooted and drastic morale problem has overtaken the ranks of managers and supervisors. 

In order to appreciate the deep sense of outrage harbored by your supervisors we must review what has led us to this breaking point.  

One of the problems is that state employees still remember the sting of the Engler years when the state's economy was booming, when unemployment remained at its lowest levels in 25 years, when the state realized an historic boom in car and truck sales and housing starts were through the roof. Revenues were pouring into state coffers... and state employees received next to nothing in base wage increases. In fact, a comparison of Wage and Salaries of the neighbors of State of Michigan employees in metropolitan areas in Michigan shows that non-state employees received 31.8% more in wages and bonuses during the last 10 years of the Engler Administration (exhibit #1). During that same 10 year period Department of Labor studies show that compensation per hour increased 38% while State of Michigan employees compensation increased only 19.2%, (exhibits #2 and #2A). 

Further, a comparison of state employee's base rate increases to the average increase in annual pay in metropolitan areas during that same period confirms that state employees received 19.4% less in base rate increases than their neighbors working in metropolitan areas (exhibits 3 & 3A). 

During that same period, Governor Engler's base rate pay increased 48.9% while during the last 10 years of the Engler administration, state employees lost 13% in wages when measured against the CPI (exhibit #4). 

So when times were good, when the neighbors of our state employees working in the auto industry were receiving $6,000 and $8,000 and $12,000 bonuses per year, Governor Engler gave little to state employees and much of what they did receive was incentive pay resulting from negotiated insurance benefit concessions. 

Then came the recession and the Granholm years. Our Governor was greeted with an insurmountable, structural budget deficit and as a result was forced to partake in more cost saving endeavors, and once again, state employees felt the pinch. 

￢                From 2002 to 2009, after adjustment for inflation, state employees saw little to no real wage growth. In 2003-05, state employees accepted “banked-leave time” and furlough programs, resulting in savings of approximately $275 million for the State of Michigan. 

￢                Beginning in 2008, state employees accepted substantial increases in their premiums, deductibles, and co-pays for health insurance saving another $300 million for the State of Michigan.[1] 

Significant state employee concessions for FY 2008-09 through FY 2010-11 include: 

￢                Increased employee contribution (from 5 percent to 10 percent for the state health plan) for health insurance premiums.

￢                Deductibles under the state PPO plan for in-network services double; out-of-network deductibles increase.

￢                Co-pays for prescription drugs and office visits increase.

￢                New $50 charge for emergency room visit (if patient is not admitted to the hospital) implemented.[2]

Further, when we review the years 2002 through 2009 we find that the increase in the cost of living was between 19.8% and 20.5%.  A review of state employee wage increases and wage concessions for fiscal years 2002-03 to 2008-09 finds a total compounded increase over this seven year period is approximately 20.5%  (exhibit #5).  When we include the banked leave time program and the two furlough days, which amounts to a reduction of 1.6%, those pay increases did not keep pace with the overall increase in the cost of living.

The State also realized two early retirements during which 7,800 positions were vacated with only a fraction of those positions backfilled. Since 2001 the state employee workforce has been reduced by 11,000 employees, an 18% reduction, while the Michigan population increased from 9,938,444 to 9,969,727 (exhibit #6).  Workloads in many Departments like Human Services and agencies like the Unemployment Insurance Agency have increased exponentially due to the recession. 

In the Department of Human Services (DHS), your supervisors have experienced a tsunami-sized surge in caseloads. There are now 400,000 more cases than last year due to our economic collapse.  Over 2-million families now receive some kind of assistance. Some caseworkers are handling close to 1,000 cases and over 100 calls per day. The DHS Director of Field Operations has admitted publicly that, based upon the surge in demand, the Department needs at least 700 more staff.  It is common knowledge that MAGE members have had to do more with less over the last decade. 

What is particularly disconcerting for our managers and supervisors is the inequitable treatment that they have endured over the years compared to their subordinates in the rank and file. 

Although the Civil Service Commission assured MAGE in years past that concessions would be distributed evenly and be born equally throughout the various units, the fact is that this has not happened.  

As an example, a few years ago MAGE was notified during the CCP process that a rule change altering the way overtime would be calculated would affect all employees equally. Once it was promulgated it became clear that if an officer in one of our prisons takes a sick day on a Monday, then works Tuesday and is mandated to work another shift on Tuesday, he/she will receive overtime pay for the additional eight hours. When the same thing happens to that officer's supervisor, the supervisor does not receive overtime pay. 

Now this alone would not lead a corrections shift supervisor in one of our prisons to revolt.  The core of the problem is a well-documented pay compression problem. If we add to that inherent problem the fact that our correction shift supervisors in the DOC received 6 furlough days this year (amounting to 2.3% of their pay) while their subordinates in the rank and file received no furlough days, and then consider the fact that during this same year the department ended its firmly established past practice of paying captains overtime for working holidays, we begin to understand where this sense of outrage is coming from. 

The OSE holds that it does not save dollars by issuing furlough days to corrections officers and the OSE has made clear that NEREs will be facing more furlough days in the coming year. If we assume the same number of furlough days this year we find that, during this 2 year period, the subordinates of our correction shift supervisors will have received 2.3% more last year as a result of the furloughs. Add this to the 3% general pay increase that their subordinates will receive in October of 2010 and add to that the anticipated 2.3% for furloughs this year and we have a 7.6% inequity. 

As a more specific example of this pay compression problem we will compare the compensation of a Sergeant and his/her immediate subordinate, a resident unit officer (RUO).  A recently promoted sergeant typically would earn $26.05 per hour (exhibit #7).  The immediate subordinate of that sergeant with only 6 years of total seniority is earning $25.00 per hour (exhibit #7-A).  If the RUO receives a 3% raise ($25.75 per hour), the RUO will be making more than his immediate supervisor with 4 years of supervisory experience ($24.08).  Now if we subtract the 6 furlough days the sergeant incurred this year, which amounts to 2.3%, and subtract that from the sergeant's pay $24.08 – 2.3% = $23.53 per hour) we find that the subordinate will have earned $25.75 per hour with the supervisor earning $23.53 per hour.  This computation does not take into consideration the fact that the OSE has informed the Limited Recognition Organizations that they intend to issue more furlough days to supervisors this year. 

It is hard to believe that this is still only the tip of the iceberg. The fact is that many of our supervisor’s subordinates already earn substantially more annual income based on overtime opportunities, which are not afforded to supervisors.  This dramatically increases their final average compensation for retirement purposes which dramatically increases their retirement pay for the rest of their lives. Taking away another 3% only engenders more animosity and resentment when supervisors consider how drastically all of these iniquities affect their retirement pay as compared to their subordinates. 

In addition to the above-mentioned compensation issues are the intangible inequities that are not helping the morale problems of supervisors and managers. One, which MAGE has already addressed in its original position statement is “shift preference by seniority” currently being enjoyed by the subordinates of the corrections shift supervisors in the DOC. Currently, rank and file subordinates of the supervisors are allowed to choose the shift they wish to work based upon their total continuous service hours, while the supervisors may be unilaterally reassigned based solely upon management’s prerogative. Please see the attached original MAGE position for specifics regarding this issue. (exhibit #8) 

MAGE, along with our other Limited Recognition Organizations also requests that the Board consider the fact that they reviewed and approved a 2007 Consensus Agreement reached with the OSE (exhibit #9). The first paragraph of that Consensus Agreement specifies; “The parties further agree that, except as provided in this Consensus Agreement, they will not submit any proposals to the Employment Relations Board for such employees for fiscal years 2009, 2010, or 2011 without the mutual written agreement of all parties.”  The OSE has violated this agreement. 

In closing, this Coordinated Compensation Panel has been charged to consider, “Comparison of the overall compensation received by excluded and non-exclusively represented classified state employees with the overall compensation received by exclusively represented state employees as the result of negotiated agreements and/or impasse panel recommendations” and, “the public interest and welfare, including the current and forecasted financial condition of the state”. 

Your choice should be clear.   Approving a wage increase for the rank and file while, denying it for the supervisors and managers who were promoted because of their hard work and dedication is not fair and only exacerbates a morale problem that has been festering within the ranks of managers and supervisors for a long time.  

Finally, while deliberating over your charge to consider, “the public interest and welfare, including the current and forecasted financial condition of the state”, we respectfully ask that you consider whether it is within the public interest to foist this inequity on the managers who have gone the extra mile in these trying times to stay positive and fire up their workers and keep providing the same service to the same number of Michigan residents with 11,000 fewer employees. 

Respectfully submitted,

Alan J. Quattrin, MAGE-OPEIU Compensation Committee Chair

NOTICE ON OVERTIME & HOLIDAY PAY UPDATE AS OF 2/20/08

We are recommending that all members wishing to file a grievance use the following verbiage on a CS-100 Grievance Form http://www.michigan.gov/documents/CS-100_Grievance_Form_HRMN_65218_7.doc ( or the form is available through your personnel office):  

       "The Department has violated Civil Service Rules, Regulations, Policies, Procedures, Past Practice and the FLSA by refusing to pay me overtime pay for overtime worked.  I should be made whole for my losses. "

File the grievance directly to Step 2, which is your Central Office, Labor Relations in Lansing.  Make sure to send a copy to the MAGE office.  We will hold all grievances in abeyance while we seek resolution to this inequity.

 PREVIOUSLY REPORTED:

The rules and regulations regarding the use of sick Leave to compute overtime have been changed to mirror the contract language recently negotiated in all of the union contracts.

MAGE is in the process of contesting the promulgation of these changes.  During the interim these changes will be implemented.

Members should understand that using sick leave in a pay period will negatively affect their ability to earn overtime pay in that pay period, including holiday pay.

We will keep you updated on our progress in fighting these changes.

Updated 11/1/07

Pursuant to the three-year agreement negotiated during the 2004 Coordinated Compensation Proceedings, MAGE members received a 2% base wage increase effective October 1, 2007 and will receive a 2% base wage increase scheduled to take effect the first pay period in April 2008.

The MAGE agreement negotiated during the 2005 Coordinated Compensation Proceedings, also provided that Corrections Shift Supervisors 11, 12 & 13, and Corrections Security Inspectors receive a special wage increase of 30-cent per hour on October 1, 2007, and all Assistant Resident Unit Supervisors 11 and Resident Unit Managers 13 receive a special wage increase of 40-cent per hour on October 1, 2007. These latest special increases were the final installment of a 3 consecutive years of special base wage increased negotiated specifically for those classifications.

MAGE is now embroiled in wage discussions for FY 2008-09. The State is demanding substantial concessions regarding health care benefits which include increases in employee’s premium cost and deductibles and co-pays, along with increases in prescription drug co-pays.

As this article went to press MSEA, SEIU and UAW Local 6000 had reached agreements which included some increases in health insurance costs to members. Specifics are not currently available.

Call Your Legislator Now Or Accept Cuts Later !

By: John DeTizio, Labor Relations Director of MAGE-OPEIU

http://house.michigan.gov/       http://senate.michigan.gov/

The Civil Service Commission approved the previously negotiated MAGE agreement at its meeting of December 5, 2006. The Commission approved the following:

A 2 percent across-the-board pay increase effective October 1, 2007, and another 2 percent across-the-board pay increase effective April 6, 2008.

A special 30-cent per hour wage increase for Corrections Shift Supervisors 11, 12, 13, and Corrections Security Inspector 13, effective October 1, 2007.

A special 40-cent per hour wage increase for Assistant Resident Unit Supervisors 11 and Resident Unit Managers 13, effective October 1, 2007.

Renewal of the Professional Development Fund for Managerial, Supervisory and Confidential employees at $150,000, and renewal of the Professional Development Fund for B & A unit employees at $50,000.

MAGE members will remember that the Civil Service Commission already approved our agreement which provided our 2% raise on October 1, 2006 and which will provide another 2% in April of 2007.

The agreement also already provided for a $.25 per hour pay increase for Corrections Shift Supervisors 11, 12, & 13 and Corrections Shift Inspector 13s on October 1, 2006, and a $.40 per hour increase for our Assistant Resident Unit Supervisor and Resident Unit Manager classifications on October 1, 2006.

MAGE-OPEIU Local 2002 has now culminated an agreement with the Office of the State Employer, which provides for 10% base wage increases over the next three years.

Highlights of the agreement (which is expected to be approved by the Civil Service Commission in December) are as follows.

Base wage increases that total 10% over the three-year agreement are as follows:

October 2005 1%         April 2007 2%

April 2006 1%              October 2007 2%

October 2006 2%         April 2008 2%

1. Special wage increase for RN Managers:

A. On October 1, 2005, each pay step for employees in the following classes will be increased by one dollar and fifty cents ($1.50) per hour prior to any across the board increase:

Registered Nurse 12, 13 (confidential)

Registered Nurse Manager 12, 13, 14, 15

Registered Nurse Director 15, 16 and 17

B. On October 1, 2005, each pay step for employees in the following classes will be increased by one dollar ($1.00) per hour prior to any across the board increase:

Practical Nurse Supervisor 11 and 12

2. Special wage increase for Pharmacists:

A. On October 1, 2005 each pay step for employees in the following classes will be increased by ten percent (10%) prior to any across the board increase.

Pharmacist Manager 13 and 14

3. Special bonus for Supervisory Dentists:

A. On a trial basis, a recruitment and retention payment of up to $5,000 may be paid, at the discretion of the Employer, to excluded dentists who have been employed with the state for at least 2,080 hours on the last day of the first full pay period in February 2006. The payment, if made, will be paid as a gross pay adjustment in the paycheck for the first full pay period in February 2006 and in subsequent years.

4. Effective October 1, 2005 move the Treasury Investment Analyst 9, 10, and P11 to pay range NERE-236, the Treasury Investment Analyst 12 to pay range NERE-237, and the Treasury Investment Specialist 13, 14 and 15 to pay range NERE-184.

5. Effective October 1, 2005 implement a Lottery Sales Incentive Program for Lottery District Sales Representative 10, 11, and 12, Lottery Regional Sales Manager 13, 14 and 15, and Promotional Specialists 14 and 15. Employees may receive up to $2,500 per year in performance bonuses.

6. Add Election Day as a new holiday to be observed on General Election Day in even numbered years.

7. Expand the current School Participation Leave to include Community Participation Leave (i.e. volunteer for charities) and revise Civil Service Regulation 5.09 C.

8. Continue the Professional Development Funds at their current level of $150,000 for the Managerial, Supervisory & Confidential Fund and $50,000 for the Business and Administration Employees Fund.

9. Effective January 1, 2005 the accumulation cap for annual leave shall be increased by forty (40) hours for each accrual step. The current cap for pay off of annual leave shall be maintained.

10. Reinstate the Banked Leave Time program at four (4) hours per pay period for twenty-one (21) pay periods effective with the pay period beginning January 2, 2005.

Captains Overtime Pay Issue as of 11/28/2005

Due to the amount of grievances filed in November and the examples we were able to provide showing the problems that were incurred over this inequity, the Department of Corrections has requested that Civil Service approve their request to compensate Captains with overtime pay when working holidays.   This request was approved November 22, 2005, and will be effective November 21, 2005 through September 23, 2006.  

This is another example of what can be accomplished when we work together.  Our strength is in numbers!  Tell that to your peers who are not members when they ask why they should belong to MAGE- OPEIU Local 2002.

UPDATE ON CLOTHING ALLOWANCE ISSUE & WAGE COMPRESSION PROBLEM in CORRECTIONS

The Employer agrees to recommend to the Civil Service Commission that the dry cleaning allowance for Corrections Shift Supervisors 11, 12 and 13 and Corrections Security Inspectors 13 who are required by the Employer to wear uniforms be increased to $575 annually, beginning in fiscal year 2005-06. A payment of $325 will be made to eligible employees as soon as administratively feasible after Civil Service Commission approval.

Direct Wage Increase for Fiscal Year 2006-07 and 2007-08:

Effective October 1, 2006, employees will receive a two-percent (2%) base rate increase.

Effective at the beginning of the first full pay period in April, 2007, employees will receive a two percent (2%) increase.

Effective October 1, 2007, employees will receive a two-percent (2%) base rate increase.

Effective at the beginning of the first full pay period in April, 2008, employees will receive a two percent (2%) increase.

Special Wage Increases for Fiscal Year 2006-07 and 2007-08:

Effective October 1, 2006 the pay rates for each pay step in the Corrections Shift Supervisor 11, 12 and 13 and Corrections Security Inspector 13 pay ranges will be increased by $.25 per hour.

Effective October 1, 2006 the pay rates for each pay step in the Assistant Resident Unit Supervisor 11 and Resident Unit Manager 13 pay range will be increased by $.40 per hour.

Effective October 1, 2007 the pay rates for each pay step in the Corrections Shift Supervisor 11, 12 and 13 and Corrections Security Inspector 13 pay ranges will be increased by $.30 per hour.

Effective October 1, 2007 the pay rates for each pay step in the Assistant Resident Unit Supervisor 11 and Resident Unit Manager 13 pay range will be increased by $.40 per hour.