Compensation Bills Head To Governor For Signature

In a year when state agencies had approximately $180 million less to appropriate, state agencies are still on schedule to receive $37.5 million for targeted state employee salaries. Lawmakers also passed legislation that requires that no benefits be adjusted until lawmakers approve an additional $60 million for state employee salaries. These bills are currently on Gov. Mary Fallin’s desk awaiting approval.

“This pay raise is the first step in improving state employee compensation and reducing unnecessary agency turnover, “ said Sterling Zearley, OPEA executive director. “ We certainly appreciate lawmakers who see that Oklahoma must address low employee pay to retain our good workers and recruit qualified applicants to state agencies.”

SB 2131 by Sen. Jolley and Rep.Martin provided a 6.25 percent pay increase for some positions with salaries substantially below market or are difficult to fill. Correctional officer positions received an 8 percent increase. Special attention was paid to positions that had not had a salary increase in approximately eight years.
Legislators said these adjustments are part of a multi-year plan to bring state employee compensation to 90 percent of market. A 2013 compensation study showed state employee compensation lags significantly behind what employees could make in the private market. This discrepancy has contributed to higher than average turnover in some state positions, costing millions of dollars annually.

The raises were consistent with the compensation study recommendations suggesting Oklahoma begin improving salaries in 2014 before making any changes to current employee benefits. The study indicated state employee benefits were generally higher than those in the private sector. However, it also showed that the benefits’ value did not make up for low salaries.

“We started the budget with certainly a difficult circumstance but we knew going in we were going to fight for common education and for our state public employees who had not received a raise in the last seven years. I’m excited to say that we won the day,” said House Appropriations Chairman Scott Martin. “We did a fantastic work this year by bringing 105 million dollars of new money for common education and passing the first year of a five year plan 37 million dollars to help fund the first phase of state employee pay raises. It certainly was a challenging year with the shortfall we had entering the session but we were extremely creative with the way we put this budget together. There certainly were some cuts to agencies but we tried to hold those as minimal as possible. We made increases to some agencies. We held a lot of those core services flat. So, even in a dire year we were able to do some really significant things for the entire State of Oklahoma.”

Even though the legislation targeted particular positions in agencies, some agencies like DHS were able to extend the pay raise to positions not in the target group. During the past eight years, DHS was among the agencies unable to give raises to most employees. OPEA will be working with other agencies to encourage them to provide raises to as many positions as possible utilizing their current budgets.

Another bill, HB1794 by Rep. Christian and Sen. Shortey, says that employee benefits will not be reduced or realigned by the legislature until an additional $60 million or more is approved to state agencies for pay increases.
“While this year’s raises were a good start, we need to continue to be responsible in improving salaries, especially for those that did not get an increase this year,” Rep. Christian said. “This is not just a one-year plan but a multi-year effort to improve the compensation and make state agencies competitive employers.”

“OPEA has been involved in the entire process to improve state employee compensation. We have been the only employee group present during the study and budget negotiations. We’ve worked closely with our legislative friends throughout session,” Zearley said. “We still have a long way to go to get compensation to where it needs to be but we’ve made progress this year. We’ll continue to work during the interim and next session, too. Our members should be commended for their efforts in advocating on behalf of all state employees.”

As a result of the study, OPEA stressed the importance of removing state agency pay bands from the legislative process making state employee salaries less political. HB3293 by Rep. Osborn, Rep. McCall, Rep. Ownbey, Rep. McBride, Rep. Walker, Rep. Billy, Rep. Wood, Rep. Sean Roberts and Sen. Jolley says that the Office of Management and Enterprise Services (OMES) will develop a compensation schedule for all positions in the executive branch. Those are to be developed and published by January 1, 2015. The bill also begins the process of revamping the state’s performance pay system.

By doing this, Oklahoma will removing the responsibility for establishing positions’ pay bands from lawmakers and empower the Human Capital Management Division of OMES to work with state agencies to determine salaries.
“For too long, salaries have been political. State agencies and OMES will now be able to develop pay bands based on the needs of the agency and their programs.” Zearley said. “It makes sense to have the state agencies work with OMES to set reasonable salary ranges rather than the legislature.”

OPEA also worked to remove language in the bill that would have reduced state employee sick leave and the dependent health insurance subsidy. The proposed reduction was not consistent with the study’s findings that said salaries must be improved before any benefit realignment.

Lawmakers did approve a plan to change the pension system of future state employees from a defined benefit plan to a defined contribution plan. This change will not apply to current Oklahoma Public Employee Retirement System (OPERS) retirees or current employees.

“Our members wanted to ensure that with this change their pensions would still be protected. Oklahoma must keep sufficient funds in the OPERS system to cover the pensions of all the current and future retirees who have earned their retirement, “ Zearley said.


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