The State Worker

Raises coming for California state government’s 27,000 managers

About 27,000 managers in California state government are about to get a 3 percent salary hike and a new deduction from their paychecks meant to offset the costs of the health care they’ll use in retirement.

The raises come first.

They’ll kick in on Oct. 1, according to a directive published Monday by the California Human Resources Department.

Next July, the managers will join several other state bargaining units starting to make contributions toward their retiree health care.

By then, managers likely will receive another raise, state Human Resources Director Richard Gillihan said.

Altogether, the raises are expected to cost about $99.4 million a year, according to the state Finance Department.

This week’s raises go to a group of state employees who are not represented by unions, which means Gov. Jerry Brown’s office has wide leeway to set their compensation without labor negotiations.

Since last year, his administration has struck several agreements with unions that compel employees to make contributions toward their retiree health care. The state has a $71.8 billion unfunded retiree health care liability, according to a 2014 report from the state controller’s office.

Gillihan said the state has not yet determined exactly how much managers will start paying for retiree health care next year. Over three years, the sum is projected to increase to up to 4 percent of manager salaries, with the state matching employee contributions.

Meanwhile, the Brown administration is in talks with 14 bargaining units that have recently expired labor contracts.

A fifteenth union with a current contract, the one that represents Cal Fire firefighters, also is at the table regarding a pay dispute.

Talks are unfolding without much urgency. They cannot be finalized until the Legislature returns in January.

“The pace has slowed down since the Legislature left town,” Gillihan said. “The reality is if we had a deal with somebody tomorrow, it’s not going to be ratified until the first of the year.”

The largest union, 95,000-member Service Employees International Union 1000, announced to members this week that it is returning to the bargaining on Oct. 10. The International Union of Operating Engineers, which rejected a tentative contract with the Brown administration in July, has talks scheduled for next week, according to a bargaining bulletin.

Adam Ashton: 916-321-1063, @Adam_Ashton