Doing the math on the proposed contract for state government’s biggest union takes a little more algebra than a normal package of raises and concessions.
The 42-month deal on the table for SEIU Local 1000 includes a one-time bonus of $2,500, three annual raises totaling 11.5 percent and a succession of new payroll deductions for retiree health care.
With those numbers, SEIU leaders are casting the contract as their biggest-ever deal. According to the state Human Resources Department, it’s worth about $4 billion over the life of the contract.
But to add in another layer of complexity, the last increase in retiree health care contributions takes effect on July 1, 2020 – six months after the contract expires.
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For contract supporters, that gives SEIU time to negotiate a new raise or bonus before the final increase kicks in, or to try to diminish the impact of that deduction.
To the contract’s opponents, the lag represents a risk that could bite the union if a recession or a new governor hold to a tight budget in the 2019-20 financial year. One of the contract’s critics, for example, created an online calculator that shows some SEIU members might have been better off with a previous offer from Gov. Jerry Brown’s administration, particularly after the final increase in deductions for retiree health care.
SEIU leadership contends the calculator does not present the full value of the contract for its members, especially because it downplays the bonuses members will receive.
“It’s misleading because it misrepresents the actual amounts that people will take home. It’s not an accurate or truthful source of information. For a full understanding of our tentative agreement, members are encouraged to come to an official union voting location or to call our member resource center,” Margarita Maldonado, SEIU Local 1000 vice president for bargaining told The Bee.
SEIU members have until Jan. 17 to vote on the contract. To figure out what the contract will mean for your income, follow these steps.
▪ On July 1, 2017, you’ll get a 4 percent wage increase. Multiply your salary by 1.04. If you’re making $50,000, that’s a $2,000 raise.
▪ On July 1, 2018, you’ll get another 4 percent wage increase. Multiply your 2017 salary by 1.04 to get your new salary. If your salary was $50,000 a year in 2016, your new salary would be $54,080.
You’ll also start seeing your first payroll deductions for retiree health care. The new payroll deduction will take 1.2 percent of that, or $649 from someone who was earning a $50,000 salary in 2016.
▪ On July 1, 2019, you’ll get a 3.5 percent wage increase. Multiply your 2018 salary by 1.035. If your salary was $50,000 in 2016, your new salary would be $55,973.
When the raise kicks in, your retiree health care deduction also would climb by 1.1 percent. That means 2.3 percent of your income would go to the new fee. If you made $50,000 in 2016, that would be $1,288
▪ The contract expires on Jan. 1, 2020. The final increase in deductions for retiree health care begins on July 1, 2020. It’ll climb by another 1.2 percent to a total of 3.5 percent. For the worker making $50,000 in 2016, that would be a $1,959 payroll deduction.
▪ About 20,000 SEIU members in more than 50 job categories will receive special salary adjustments in the new contract that would raise their pay beyond the base agreement. Most of them take effect on July 1, 2017, raising pay between 2 and 15 percent for certain employees.
If you’re getting one of those special raises at a rate of 5 percent on July 1, 2017, multiply your salary by 1.05 and then multiply the solution by 1.04. The result would be a salary of $54,600 for an SEIU member who earned $50,000 in 2016.