CA and Largest State Employees' Union Reach Agreement

June 19, 2006 ( - California state negotiators and the state's largest union representing government employees tentatively agreed on a contract that would change the way pensions are formulated for certain new employees.

The Sacramento Bee and the union’s Web site report that, according to the agreement, employees hired beginning January 1, 2007, will have retirement benefits based on an average of their final three years’ salary rather than a single “spike” year as is in effect for current employees. The contract is for the 87,000 members of the Service Employees International Union (SEIU) Local 1000, which includes a variety of positions from Department of Motor Vehicle clerks to janitors.

SEIU 1000 members also fended off a state challenge to their health care benefits, in part retaining the formula in which taxpayers will fund 80% of the premium for the union workers and their families, according to the Bee. However, about 2,200 state teachers will see the state’s portion of their health care costs converted from the 80% formula to a flat-dollar equivalent.

In addition, the contract will raise the workers’ wages by an average of 7.5% to 9.8% during the next two years. According to the Bee, union members will receive a $1,000 one-time bonus upon ratification under the terms of the deal, and a 3.5% pay raise will kick in on July 1. They will receive another pay hike on July 1, 2007, between 2% and 4%, depending on the cost of living.

The settlement comes after the union announced last Monday that it had achieved 85% support from its membership on a strike authorization vote.

If approved by union members and the state legislature, the agreement would be for three years, retroactive to July 1, 2005, and would extend to June 30, 2008.