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Ronald Reagan Presidential Library
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This is a PDF of a folder from our textual collections.
Collection: Reagan, Ronald: Gubernatorial Papers,
1966-74: Press Unit
Folder Title: [Personnel] - California State Personnel Board
(1968 Annual Report)
Box: P37
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PRESS*
DEPARTMENT EUREKA OF THE STATE THE STATE
40
GALIFORNIA
THE CALIFORNIA OF
STATE PERSONNEL BOARD
1968
ANNUAL REPORT
ON STATE SALARIES AND
PERSONNEL MANAGEMENT
CALIFORNIA STATE PERSONNEL BOARD
801 CAPITOL MALL, SACRAMENTO, CALIFORNIA 95814
Board Members
ROBERT S. ASH
December 6, 1968
MAY LAYNE BONNELL
SAMUEL J. LEASK
NITA WENTNER
JOSEPH L. WYATT, JR.
JOHN F. FISHER
Executive Officer
The Governor of California
and
Members of the Senate and the
Assembly of the State of California
Gentlemen:
The State Personnel Board, at its regular meeting on December 6, 1968, adopted this report on
State Salaries and Personnel Management as the annual report provided for in Government Code
Section 18712. As further provided in this Section, this report is transmitted to the Governor
and to each House of the Legislature.
Our salary increase fund recommendations for the 1969-70 Fiscal Year appear in the Employee
Compensation Section. In other sections of the report we have commented on selected topics of
personnel management which we believe will be of interest to you at this time.
Respectfully submitted,
CALIFORNIA STATE PERSONNEL BOARD
Danil SAMUEL J. J LEASK, Leask President
Thay Layne Bonnell
Nita Wentner
MAY LAYNE BONNELL, Vice-President
NITA WENTNER, Member
Robert D ash
ROBERT S. ASH, Member
Member
TABLE OF CONTENTS
CALIFORNIA STATE SALARIES AND PERSONNEL MANAGEMENT
Page
Summary of Salary and Employee Benefit Recommendations
for 1969-70 Fiscal Year
1
I. Employee Compensation
3
A. Salary Setting Policies and Practices
3
B. The State's July 1968 Salary Adjustment Program
4
C. Changes in Salaries Outside of State Service
5
D. The State's Salary Adjustment Needs
6
E. Executive Compensation
7
II. Employee Benefits
10
A. Premium Pay for Overtime
11
B. Work Week of Fire Suppression Classes
12
C. Night-Shift Differential
13
D. Health Benefits
14
E. Unemployment Insurance
14
F. Summary
15
III. Employer-Employee Relations
15
IV. Employment Opportunities for the Disadvantaged
17
A. Fair Employment Practices
17
B. Career Opportunities Development
18
Page
V. Sick Leave Administration
19
VI. Workmen's Compensation
20
Appendix - Out-Service Training Annual Report
23
SUMMARY OF SALARY AND EMPLOYEE BENEFIT RECOMMENDATIONS
FOR 1969-70 FISCAL YEAR
To keep the salaries of State civil service employees in line with salaries
paid for comparable work outside State service, the Personnel Board rec-
ommends the appropriation of $39, 713, 000 from the General Fund and
$36, 078, 000 from Special and other funds to provide salary adjustments
in the 1969-70 Fiscal Year. $24, 750, 000 from the General Fund and
$30, 020, 000 from Special and other funds will permit a 5% general in-
crease for State employees. $14, 963, 000 from the General Fund and
$6, 058, 000 from Special and other funds is included for needed special
adjustments in excess of the 5% general increase recommended.
In order to bring State employee benefits and supplementary compensa-
tion practices into closer alignment with those of private industry, the
Personnel Board further recommends that:
Funds be appropriated to meet the State's overtime obligations under
amendments to the Fair Labor Standards Act which require certain
State schools and hospitals to pay premium pay for overtime. An
appropriation of $780, 000 is needed to finance the State's obligation
from February 1, 1967, through June 30, 1969. An additional
$350, 000 is required for the coming fiscal year.
Legislation be enacted and funds appropriated to pay premium pay
for overtime to other State employees who are not covered by the
Fair Labor Standards Act, but whose counterparts in private indus-
try receive premium pay. The estimated additional annual cost
will be approximately $1.4 million from the General Fund and
$3.4 million from Special and other funds.
Funds be appropriated to provide payment of night-shift differentials
to selected classes of State employees at an annual cost of approxi-
mately $1, 750, 000 from the General Fund and $250, 000 from Special
and other funds.
The State's contribution to health insurance be increased $5.28 to a
total of $13.28 per employee to cover entire payment of the employee's
basic plan at an additional total cost of about $5 million per year.
The State provide unemployment insurance benefits to its employees
laid off due to budget reductions or other reasons of economy at an
estimated annual average cost of $154,000.
- -
I. EMPLOYEE COMPENSATION
A. Salary Setting Policies and Practices
The Personnel Board is responsible for setting the salary ranges of
the State's 116, 000 civil service employees. Government Code
Section 18850 assigns this responsibility to the Personnel Board and
also provides the basic policies that guide the Personnel Board in
establishing and adjusting State salaries. These policies are:
Salary ranges of State classes shall be set in proper relation
to each other SO that "like salaries shall be paid for comparable
duties and responsibilities".
Consideration shall be given to prevailing rates for comparable
service in other public employment and private business.
The cost of any salary adjustments shall not be "in excess of
existing appropriations which may be used for salary increase
purposes".
The State reviews the status of State employee salaries and the need
for salary adjustment funds on an annual basis. In the fall of each year,
the Personnel Board conducts extensive surveys of the salaries and
wages being paid in private industry in the San Francisco Bay and Los
Angeles areas to employees doing work comparable to that being done
by State employees. The Personnel Board also surveys salaries paid
in other public agencies and refers to salary surveys conducted by
other organizations, both public and private.
In November of each year, following the publication of the survey re-
sults, a public hearing is held by the Personnel Board at which time
State departments, employees, and employee organizations have an
opportunity to present their views of salary increases required for the
next fiscal year. This hearing is in addition to numerous conferences
between the staff and departments and employee groups that occur
throughout the year on specific salary questions and problems.
Government Code Section 18712 requires that the Personnel Board
prepare this annual report for the Governor and the Legislature on
the status of State salaries. The salary surveys of private industry
and government and the views and information of State departments
and employees are all considered fully by the Personnel Board in ar-
riving at the recommendations included in this report.
-3-
In order that State salaries may be considered in the light of the most
current data, the salary surveys are again conducted in February and
March while the Legislature is in session. The results of these surveys
are then available for use in reviewing the adequacy of the Personnel
Board's estimate of fund needs made earlier in its report to the Governor
and the Legislature and in making any revisions to earlier fund estimates
that are indicated. Salary adjustments made by the Personnel Board,
within funds appropriated for that purpose, are usually effective at the
beginning of the new fiscal year.
B. The State's July 1968 Salary Adjustment Program
In its December 1967 Report to the Governor and the Legislature, the
Personnel Board recommended the appropriation of $35, 515, 000 from
the General Fund and $31, 700, 000 from Special and other funds for
salary adjustments during the 1968-69 Fiscal Year. The requested
amount was to provide a 5% general adjustment for almost all employees
along with special inequity adjustments to a smaller number of employees
at a cost of $12.8 million from the General Fund and $3 million from
Special and other funds.
In 1968, the Legislature appropriated and the Governor approved funds
which made possible the 5% general increase recommended by the Board.
The increase was effective July 1, 1968. For special adjustments,
$3.9 million from the General Fund and $4.7 million from Special and
other funds were made available.
The appropriations in 1968 provided $8. 6 million for special adjustments
in contrast with the Board's recommended fund of $15.8 million.
$5 million of the requested funds were to provide a 5% special adjust-
ment for Nurses and Psychiatric Technicians which was not possible
within the lesser amount appropriated. For some of the classes for
which the Board felt that there was support for special adjustments of
5% or more, it was able to provide special adjustments of only 2-1/2%.
As a result, salaries for these classes continued to lag behind those of
their counterparts outside State service.
The special adjustments granted by the State Personnel Board effective
July 1, 1968, were as follows:
+2-1/2% for 20,000 employees in the fields of medicine, psychology,
uniformed law enforcement officers, food preparation and ser-
vices, laundry and other personal services, building trades,
fire prevention, public health, education administration, agri-
cultural inspection and for senior clerical personnel.
-4-
+2% for 4, 650 correctional officers, youth authority group super-
visors and related personnel.
+5% for employees in forest firefighting classes while they are on
firefighting duty.
+5% for 500 employees in a variety of classes where a special
increase was necessary to bring about proper internal alignment
with other State classes.
The increase for State employees resulting from the general and special
adjustments averaged 5.7 per cent.
C. Changes in Salaries Outside of State Service
The need for State salary increases is influenced mainly by increases in
salaries paid in private industry and, to a lesser extent, by salaries
paid by other large public employers in California. The following para-
graphs summarize recent changes in the private and public sectors and
indicate the urgency for appropriate State salary adjustments.
1. Private Industry: Salaries and wages in private industry are cur-
rently increasing at the greatest rate since World War II. The
annual rate of increase has risen from between 3-1/2% and 4% in
the years immediately prior to 1966 to a current annual rate be.-
tween 6% and 7%.
Between March 1968 and October 1968 the State Personnel Board's
private industry surveys showed an increase of 3.9%; a rate higher
than for any previous corresponding period. Based on this trend,
it is estimated that the Board's March 1969 surveys will show an
annual change in private industry salaries of more than 6%.
Other indicators of change in salary levels are equally strong. The
Bureau of Labor Statistics reports that first-year wage increases
resulting from major collective bargaining agreements settled during
the first six months of 1968, averaged 7. 5% in manufacturing indus -
tries and 7.7% in nonmanufacturing industries. Many of these con-
tracts emphasized large wage increases in the first year with various
fringe options in subsequent years. Even so, the annual average
wage increase for these contracts was over 5% for the life of the
contract thus assuring a continuation of a high salary increase trend.
-5-
Pace-setting contract settlements in recent months include the July
agreement between the Machinists and Auto Workers Unions and
major Aerospace firms; and the August settlement between the steel-
workers and the major steel producers, both calling for a 6% adjust-
ment immediately. The three-year agreement between the Communi-
cations Workers of America and the Bell System will increase wages
and benefits about 6. 5% per year and is comparable to earlier agree-
ments in the auto, rubber, and copper industries. Nationwide col-
lective bargaining agreements as reported by the Bureau of National
Affairs averaged 20¢ per hour in the third quarter of 1968. This is
considerably above the 14. 9¢ per hour average for the third quarter
of 1967 which was the highest figure reported since 1945.
2. Local Government: The increases granted during the past year by
California's 25 largest cities and 25 largest counties averaged 6.5%.
Average increases granted July 1, 1968, by the three major local
government competitors were: Los Angeles City, 5.5%; Los Angeles
County, 6. 2%; and San Francisco, 7. 9%. It is estimated that large
local public agencies will, as in recent years, grant increases by
July 1969 at least comparable to those occurring in private industry.
3. Federal Government: The Federal Government granted increases
averaging 4. 9% to its classified workers in July 1968 which were
intended to erase half the lag between Federal rates and June 1967
national average private rates. Provisions have already been made
for an additional adjustment in July 1969 to eliminate the remaining
half of the lag and to reflect the advance in private rates in the year
ending in June 1968. Federal officials are now estimating that the
increase for Federal employees in July 1969 will average 8% with
some of the top executive and administrative levels receiving sub-
stantially more.
D. The State's Salary Adjustment Needs
In recommending the salary adjustment fund needs, the Personnel Board
has taken into consideration existing salary levels, clearly established
salary trends and the information and recommendations presented by
various State Departments and employee groups.
The Board estimates that an appropriation of $39, 713, 000 from the
General Fund and $36, 078, 000 from Special and other funds will be
needed for salary adjustments for State civil service in the 1969-70
Fiscal Year. These funds would provide an average adjustment of 6. 7%.
Approximately $54. 8 million of the funds recommended for 1969-70
would be needed to grant a 5% general increase to practically all civil
service employees. In addition, $14,963,000 from the General Fund
and $6, 058, 000 from the Special and other funds is needed to provide
special adjustments for employees in classes for which prevailing
salary data and recruitment and retention difficulties indicate an urgent
need for such adjustments.
In representations to the Personnel Board in its salary hearing on
November 7, 1968, employee groups uniformly recommended adjust-
ments beyond those now being recommended by the Board. The em-
ployee groups requested general increases ranging from 7. 5% to 10%
plus special adjustments ranging from 2. 5% to 35%. The general in-
creases and special adjustments recommended by the employee groups
would require an appropriation of between $125 million and $150 million.
These recommendations were in addition to requests for improvements
in employee benefits.
The Board has given serious consideration to the information and views
presented by the employee groups but believes that the funds recom-
mended by the Board will be adequate to keep State employee salaries
in line with those being paid outside State service and will allow the
State to recruit and retain a qualified work force.
E. Executive Compensation
1. The Problem of Executive Compensation
The most glaring inequity and inconsistency in the State salary
structure relates to executive compensation. The salary lag of
department directors in California is becoming increasingly signifi-
cant. In addition, the salary structure for senior management
positions is severely compacted.
When compared with other large government jurisdictions the
salaries of many State executives are low. For example in the
State of New York, the state most comparable to California in size,
organization and complexity, the average salary paid to department
heads is $34,556 per year. For similar departments in California
the average director's salary is $25, 727 per year. This is a dif-
ference of over 34%.
The following table shows how certain California state positions
compare with positions in related fields in other California juris-
dictions and other states.
-7-
Table I
ANNUAL
STATE POSITION
SALARY
LOCAL AGENCY & STATE POSITIONS
ANNUAL SALARY
DIRECTOR, DEPARTMENT
COUNTY ENGINEER, Los ANGELES
OF PUBLIC WORKS
$25,725
COUNTY
$32,820
CITY ENGINEER, Los ANGELES CITY
31,104
DIRECTOR OF PUBLIC WORKS,
SAN FRANCISCO
33,036
COMMISSIONER OF HIGHWAYS
NEW YORK
35,500
MICHIGAN
29,000
WISCONSIN
24,312
DIRECTOR, DEPARTMENT
HEALTH OFFICER, Los ANGELES
OF MENTAL HYGIENE
27,300
COUNTY
28,692
DIRECTOR, DEPARTMENT
DIRECTOR OF PUBLIC HEALTH,
OF PUBLIC HEALTH
27,300
SAN FRANCISCO
32,244
COMMISSIONER OF HEALTH
NEW YORK
38,000
MICHIGAN
32,000
WISCONSIN
30,656
COMMISSIONER, CALIFORNIA
SHERIFF, Los ANGELES COUNTY
35,000
HIGHWAY PATROL
23,625
CHIEF OF POLICE, Los ANGELES CITY
32,820
CHIEF OF POLICE, SAN FRANCISCO
28,368
DIRECTOR, DEPARTMENT
DIRECTOR OF PUBLIC SOCIAL
OF SOCIAL WELFARE
25,725
SERVICES, Los ANGELES COUNTY
35,500
GENERAL MANAGER, DEPARTMENT OF
SOCIAL SERVICES, SAN FRANCISCO
27,180
DIRECTOR OF PUBLIC WELFARE
NEW YORK
35,000
MICHIGAN
29,500
WISCONSIN
33,856
Executive salaries have increased at a slower rate than the sala-
ries of-their exempt and civil service subordinates. As a result
the differentials in salary between directors and their subordinates
have diminished. There are currently 108 civil service classes
whose salary ranges are compacted because of the low salary
ceiling created by the salaries of department directors.
Currently, in 20 departments, the salary differential between the
director and chief deputy director is less than 5%. This is illus-
trated in Table II on the following page.
-8-
Table II
Per Cent Differential
Between the Director
Department
and his Chief Deputy*
Agriculture
0.1%
Conservation
0.1
Corrections
0.1
Equalization
0.1
Fish and Game
0.1
Franchise Tax
0.1
General Services
0.1
Highway Patrol
0.1
Mental Hygiene
0.1
Motor Vehicles
0.1
Parks and Recreation
0.1
Public Health
0.1
Public Works
0.1
Water Resources
0.1
Youth Authority
0.1
Housing and Community Development
2.4
Health Care Services
4.5
Rehabilitation
4.5
Alcoholic Beverage Control
4.6
Professional and Vocational Standards
4.9
* "That per cent by which the Director's salary is greater than the salary
of his Chief Deputy.
-9-
2. Approaches to Executive Salary Adjustments
Significant improvements in executive salaries have been made in
other governmental jurisdictions in recent years. Some jurisdictions
have adopted systems for the timely review and adjustment of execu-
tive salaries. Among these are the Federal Government (Commis-
sion on Executive, Legislative, and Judicial Salaries), the State of
Michigan (State Officers' Compensation Commission), and the County
of Los Angeles (Executive Salary Review Committee). Each has
established a commission or committee to review the salaries of
executives and to recommend to the law-making body a program for
salary adjustment.
The lack of a regular systematic review and updating of executive
salaries is a major deficiency in the personnel program of the State
of California.
3. A Study is Underway
Both the Governor and the State Legislature have directed the Com-
mission on California State Government Organization and Economy
to study the problems of executive compensation. The Commission's
report will be completed by February 1, 1969. It is hoped that the
recommendations made by the Commission will receive considera-
tion and action by the Legislature and that a system of timely review
and adjustment of executive compensation in California State Govern-
ment will be provided.
II. EMPLOYEE BENEFITS
Employee Benefit Trends
A report of the Chamber of Commerce of the United States, "Employee
Benefits, 1967", indicates that the average cost of employee benefits in
443 nonmanufacturing firms surveyed was 25. 6% of the total payroll -
excluding such additional supplementary compensation practices as night-
shift differential and premium pay for overtime. By comparison, the State's
cost for Fiscal Year 1967-68 was 23. 7% or 1. 9% less than in private indus-
try. Supplementary compensation practices of premium pay for overtime
and holidays and shift differentials represent an additional 3% expenditure
by industry with no corresponding expenditure by the State.
-10-
Although the State employee is considered to be relatively well treated in
some benefit areas such as sick leave, paid vacation and paid holidays,
this is more than offset by below average health and welfare and life insur-
ance coverage and the absence of unemployment insurance.
Specific areas where State compensation practices appear to be lagging most
are discussed separately below:
A. Premium Pay for Overtime
In no other area do the differences between the practices of private
industry and State loom SO large as in the payment of premium pay for
overtime. Virtually all industries pay nonsupervisory employees at
least time-and-one-half for overtime. In most, the premium pay is
required by law. The State now pays a premium for overtime to a
small group of employees at the State Printing Plant, the San Francisco
Port Authority and temporary craftsmen whose compensation is governed
by special statutes.
Recently the State has been required to pay time-and-one-half for over-
time to a large group of State employees as a result of the inclusion
of State "hospitals, rest homes, and schools" under the overtime pro-
visions of the Federal Fair Labor Standards Act as amended in
February 1967. In June 1968, the United States Supreme Court ruled
that the amendment was constitutional, thereby requiring states as well
as other governmental jurisdictions to begin paying the premium rate
for covered employees.
The Personnel Board staff is currently consulting with the United States
Department of Labor to determine the exact coverage for State employ-
ees. The California Attorney General has advised that the State of
California will be obligated to pay the premium rate for overtime worked
by these employees since February 1, 1967. Estimates for this retro-
active payment are as high as $780,000 to June 30, 1969. Financing
will also be necessary to continue this payment in future years at an
estimated cost of $350,000 per year if overtime use continues at the
present level. To conform to the law, it will be necessary for the
Legislature to appropriate funds to meet the State's obligations under
the Act.
Implementation of the Fair Labor Standards Act represents only a par-
tial solution to the problem of overtime compensation in State service.
There are large numbers of additional employees who are not covered
by the mandatory provisions of the Act, but whose counterparts in
private industry are covered and received premium pay when required
to work overtime. This condition represents an internal inconsistency
in State compensation policy; approximately 20% of those State employees
-11-
entitled to premium pay by industry standards receive that pay, while
most of the others - equally entitled to it by industry practice - do not.
For these additional employees not covered by the Fair Labor Standards
Act, the estimated additional annual cost of overtime pay at a time-and-
one-half rate will be approximately $1. 4 million from the General Fund
and $3.4 million from the Special and other funds. The estimates are
based on the Calendar Year 1967 experience and the assumption that the
use of overtime continues at the same level as in the past. It is possi-
ble, however, that this estimate, based on past performance, can be
reduced by more rigorous overtime administration.
For over 15 years the Board has recommended that legislation be en-
acted permitting the payment of time-and-one-half for overtime to State
employees when justified by prevailing practice. The Board again urges
the adoption of such legislation. For the State civil service, the Board
recommends it be authorized to determine those occupations and classes
which should receive premium pay for overtime on the basis of prevail-
ing practice in private industry and other public agencies.
B. Work Week of Fire Suppression Classes
Although reductions have been made in the work week schedule of fire
suppression classes in the Division of Forestry in recent years, the
hours presently served by these employees, including duty, standby and
on-call time are still among the highest required by public fire service
organizations.
The Personnel Board recommends that the Division of Forestry and the
Legislature further reduce the work week for these classes to more
closely parallel the work week prevailing for comparable classes in
other public fire service organizations.
1. Recent Changes for State Forestry Personnel. Prior to 1961, the
maximum extended duty week of Division of Forestry fire suppres-
sion personnel was 120 hours. Effective July 1, 1961, this was
reduced to 104 hours for both seasonal and permanent employees.
Assembly Bill 1351, effective July 15, 1965, declared that the
normal work week of permanent employees of fire suppression
classes of the Division of Forestry shall not exceed 96 hours.
These employees are now on a maximum 96-hour duty week during
the fire season. The duty week for one quarter of these employees
who work in the local contractual fire protection program is 96
hours during the entire year. The fire season averages six months
per year for the other three quarters of the fire suppression per-
sonnel. During the remainder of the year, these employees work
-12-
a 40-hour week. Therefore, during the course of one calendar year,
the average of fire season and nonfire season duty weeks for these
employees is 68 hours.
At the time the work week for permanent employees was reduced to
96 hours, the duty week for the seasonal class of Forest Firefighter
(Seasonal) was returned to 120 hours. The Legislature approved
the 96-hour duty status for permanent personnel by taking into
account the funds which would be saved by returning the Firefighter
(Seasonal) employees to a 120-hour duty status.
2. Prevailing Practice. The current salary-setting base for the Divi-
sion of Forestry fire suppression classes includes eleven local fire
protection agencies which perform fire service comparable to the
Division of Forestry and also the United States Forest Service. The
duty week of these eleven local agencies averages about 78 hours.
The duty week for the United States Forest Service is 75 hours. The
24 largest municipal fire departments in the State have an average
duty week of approximately 60 hours, with a range of 52-67 hours.
C. Night-Shift Differential
Although it is common practice to pay night-shift differentials in industry
and in many governmental jurisdictions, the State provides this benefit
to only a small fraction of the employees who actually work evening and
night shifts.
Surveys in the Los Angeles and San Francisco Bay Areas by the Bureau
of Labor Statistics in the last two years reveal that 80% to 90% of the
surveyed employers who have formal night shifts provide a differential
payment for workers on these shifts.
In 1966, the Personnel Board established a basic compensation plan for
night shift employees providing for a differential of 10¢ per hour
($17. 33 per month) for the evening shift and 15¢ per hour ($26. 00 per
month) for the night shift. This plan has been extended to only about
500 workers, all of them employed at toll bridges or hydroelectric
plants, where it has been financially possible to pay the night-shift rate
because of special funding. Approximately 16, 000 other employees
work in positions subject to night work, either in rotating or permanent
shift assignments. Approximately half of these work in occupations
whose counterparts in private industry or other public jurisdictions
receive night-shift differentials. The Personnel Board, as it has since
1966, again recommends that sufficient funds be appropriated so that
night-shift differentials may be extended to the additional classes of
State employees where practice supports such payments. The annual
cost of night-shift differentials is estimated at $1, 750, 000 from the
General Fund and $250, 000 from Special and other funds.
-13-
D. Health Benefits
The 1968 increase in the State's contribution to the cost of basic em -
ployee health insurance from six to eight dollars represents an improve-
ment in the State's health insurance plan. Unfortunately, even this
increase did not significantly improve the State's relative position; it
continues to lag far behind prevailing practice in private industry.
A 1968 study of collective bargaining agreements that include employer
contributions to health and welfare plans (conducted by the State Depart-
ment of Industrial Relations), revealed that:
88% of the workers were covered by plans paid in full by the
employer; and
the average monthly employer contribution to health and welfare
plans (including life insurance) was $30.45.
If the State's contribution to basic health benefits for the employee only
were increased from $8 to $13.28 per month to cover the full cost to
the employee, the cost to the State would amount to approximately
$5 million per year.
The Personnel Board, as it has since 1966, supports the recommenda-
tion of the Public Employees' Retirement System for full payment for
the basic health plan for each employee.
E. Unemployment Insurance
Not only is employer contribution to unemployment insurance the pre-
vailing practice, it is required by law in most industries. State em-
ployees, however, are without this protection in case of layoff.
State employment is relatively stable compared to most industries.
The average number of layoffs per year from permanent full-time posi-
tions for the last five years has been 160. The number laid off in any
one year ranged from a low of 100 in 1964 to a high of 260 in 1967.
Although the numbers are not large, these employees are forced to
carry a burden not required in most other types of employment. Based
on experience factors, the laid-off employee would receive payments
averaging $60 per week for about 16 weeks. Based on the number of
layoffs in the last five years, the average annual cost to the State would
have been approximately $154,000.
-14-
The Personnel Board recommends again this year, as it did in 1967,
that an unemployment insurance program be provided with the following
features:
It would apply to State employees with permanent or probationary
status;
It would apply only to layoffs due to budget reductions or other
reasons of economy;
It would be funded by State reimbursement of the unemployment
insurance fund in the amount of actual insurance payments; and
The disability insurance feature of the Unemployment Insurance
Code would not apply to State employees.
F. Summary
Enactment of Board recommendations for provision of unemployment
insurance benefits and an increase in the State contribution to employee
health insurance would increase costs by another 8 of one per cent of
payroll. This increase would make the State costs of benefits 24.5%
of payroll - still 1. 1% below nonmanufacturing industry's 1967 contri-
bution of 25. 6% of payroll.
The payment of premium pay for overtime, night-shift differentials,
basic health insurance costs, and unemployment insurance and the
recommendation for reduction in the work week schedule for fire sup-
pression classes are all strongly supported by prevailing practice.
III. EMPLOYER-EMPLOYEE RELATIONS
The effort to establish mutually satisfactory relationships between a public
employer and its employees and their representatives continues to be one
of the most dynamic areas in government today. Significant changes in
law, policy, and practice are occurring throughout the country and Cali-
fornia is no exception. Recent activity in the State Legislature in this area
has included: interim committee hearings; the introduction and considera-
tion of numerous bills; and enactment in 1968 of Senate Bill 1228, which
requires some features of a more formalized negotiation system for local
government.
-15-
Although State employees were specifically exempted from coverage of
Senate Bill 1228, its provisions do have an immediate interest for the State
Personnel Board. House Resolution 530 requests the Personnel Board to
submit findings and recommendations to the State Assembly by February 4,
1969, regarding the statutory changes made by Senate Bill 1228, "including
procedures for implementing these changes with respect to State employees
subject to their jurisdiction".
In order to respond adequately to this request, the Personnel Board has:
(1) addressed a detailed questionnaire to State executives and employee
organizations representing State employees soliciting their views and
specific proposals on how a more formal employee relations process might
be structured, and (2) conducted a public hearing on this subject providing
an opportunity for all interested groups and individuals to present their
views. This approach will permit the Board to ascertain the viewpoints of
those most affected by any change in the law or policy before submitting
its findings and recommendations.
In addition, and of fundamental importance are the efforts made by Person-
nel Board and Staff members to comprehend the significance and evaluate
the effects of alternatives to policy decisions which must be made in the
development of appropriate legislation. Board and Staff members have en-
gaged in exhaustive research and participated in conferences on the subject
over a period of at least two years.
Pros and cons currently are being considered in connection with such factors
as:
Scope of the Legislation.
Determination of appropriate bargaining units.
Compulsory arbitration policy status of supervisors.
Impasse procedures.
Administrative structure and procedures for implementation.
There are no simple or universally accepted solutions to the several issues
raised in implementing and administering a formalized negotiation process.
The impact on the State's personnel management program, administrative
processes, and decision-making structures which might result from a
negotiation system is as yet unmeasured.
The Personnel Board believes that any plan for more formalized employee
representation must maintain a proper balance between the enhancement of
employee participation in decisions affecting their employment situation
and the need to preserve merit employment, appropriate managerial dis-
cretion, and influence of elected officials on public policy.
-16-
A separate special report on this subject will be transmitted to the
Legislature in February 1969.
Grievance Procedure Review
Although less dramatic, a significant aspect of the employer-employee re-
lations is the day-to-day administration of these relations. One facet of
this continuing relationship is the grievance procedure. By rule, the Per-
sonnel Board initially adopted a servicewide grievance procedure in 1961.
An intensive review of this process was completed in September 1968 by a
joint committee composed of both employee and management representa-
tives. Unanimous recommendations for improvement and changes were
developed for presentation to the Personnel Board. As a result of these
recommendations, the State Personnel Board adopted several proposed rule
changes in the grievance process to strengthen the grievance procedure's
effectiveness in identifying and resolving employee dissatisfactions in the
State service.
IV. EMPLOYMENT OPPORTUNITIES FOR THE DISADVANTAGED
A. Fair Employment Practices
For a number of years the State Personnel Board has carried out
specific activities to ensure that equality of employment opportunity
exists in State service. Specific continued or expanded activities, many
of which have been detailed in prior reports, include:
Recruitment of minority representatives to serve as members
of qualifications appraisal panels.
Review of examination materials to ensure that competitors are
tested at a level no higher than that necessary to predict job
competence.
Conduct of an ethnic census of examination competitors to mea-
sure the success of efforts to equalize opportunity.
In addition to general distribution, a monthly summary of exam-
inations is sent to local offices of the Urban League, National
Association for the Advancement of Colored People, Congress
of Racial Equality, the Mexican-American Political Association,
State Service Centers, various community service organizations
and minority community newspapers.
-17-
Recruitment advertising is placed on a regular basis in some
20 newspapers whose readers are predominantly members of
minority races.
For selected examinations the announcements are printed in
Spanish as well as English.
Development and use of culture-fair examinations and of non-
verbal written tests and alternate selection methods where
verbal skills are not necessarily related to job performance.
Each of these activities is periodically reviewed and updated.
B. Career Opportunities Development
In May 1968, the Personnel Board established a Career Opportunities
Development Unit to help implement the Governor's Career Opportuni-
ties Development Program in State service, and to provide centralized
coordination and direction for all related activities.
The Career Opportunities Development Program is an aggressive effort
to:
Develop recruitment, selection, placement, and other person-
nel procedures to facilitate hiring the disadvantaged.
Identify, publicize and promote the use of existing job opportuni-
ties and apprenticeship programs within the State civil service
for which the disadvantaged already qualify.
Analyze existing jobs to separate out subprofessional tasks
which can be grouped into entry-level or subprofessional positions.
Upgrade the skills of disadvantaged employees and prepare them
for career service and advancement by providing training and
educational opportunities.
Since the announcement of the Program by the Governor's Office in 1968,
the Unit has concentrated on developing new classes and modifying
existing classes for the employment of the disadvantaged, including
specifically:
Developing the classes of Correctional Program Assistant in the
Department of the Youth Authority, the class of Parole Aid in the
Department of Corrections, and the class of Hospital Worker in
the Department of Mental Hygiene. It is anticipated that approxi-
mately 250 persons will be employed in these positions during
Fiscal Year 1968-69.
-18-
Developing a pilot project in conjunction with the Department of
General Services for community-oriented recruiting of a poten-
tial of about 50 Janitor Aids through community action organiza-
tions in Sacramento County.
Developing a career ladder, for use in the Service Center Pro-
gram, which allows disadvantaged individuals to qualify for
professional status on the basis of experience and appropriate
training. To date, 29 temporary trainees have qualified for
permanent appointments to new entry classifications and 21 em- -
ployees have been promoted to new preprofessional positions in
the career ladder.
Current activities of the Unit include in addition to the foregoing:
Developing a continuous ethnic roster of State employees.
Developing broad trainee classes covering most occupational
groups in State service to facilitate hiring of the disadvantaged.
Providing consultative services to State departments and the
staff of the Personnel Board.
The State Personnel Board members are reviewing all facets of the
Career Opportunities Development Program and are monitoring prog-
ress through frequent reports, discussions with management staff,
and public hearings to ensure that the program succeeds without lower-
ing the caliber of merit employment.
V. SICK LEAVE ADMINISTRATION
The Joint Committee on Conference of the Legislature suggested that the
Personnel Board report to the Legislature and to the Governor on the use
of sick leave in State service with a view to reducing State expenditures for
sick leave. The following information is provided in response to that
request.
Sick leave usage for full-time State civil service employees has ranged
between 7.6 and 7.9 days per employee per year for the past five years
with the average for the 1967-68 Fiscal Year being 7.9 days. The stated
usage rate is somewhat higher than that of local public agencies in California
but is below the average of the Federal Government.
-19-
The State should not be satisfied with its record. Sick leave in the 1967-68
Fiscal Year caused the loss of 794, 784 man-days of productive work.
There is substantial evidence that the great majority of career State em- -
ployees are conscientious in their use of sick leave. The Personnel Board
is, however, carrying out various activities to improve the State's sick
leave record.
For several years the Board has been comparing each department's
sick leave usage to a usage norm. These reports call attention to
departments that should be making special efforts to reduce sick
leave.
The Personnel Board provides supervisors with a handbook describ-
ing the State's sick leave program and their responsibilities in that
program.
In March 1968 the Board completed an analysis of State sick leave
by category of employee and by usage reason. This led to a com-
munication from the Cabinet Secretaries to departments whose usage
exceeds their norm seeking a review and action on sick leave usage.
Among the efforts being made by departments to reduce unnecessary sick
leave usage are:
Increased emphasis upon sick leave administration as a part of
supervisory training programs.
Accelerated information programs to inform all employees of the
purposes of sick leave and the dangers of abuse.
The use of data processing equipment to identify high users of sick
leave and subsequent notification of the responsible supervisor so
that personal follow-up can be accomplished.
Intensive counseling of high users by their supervisors with reports
to management in the case of continued usage that does not appear
to be fully warranted.
VI. WORKMEN'S COMPENSATION
The Joint Committee on Conference of the Legislature and the Governor's
Survey on Efficiency and Cost Control have both expressed concern over
the number, severity, and subsequent cost of occupational injuries in the
State service. This section of the report provides requested information
on the nature and extent of workmen's compensation claims and Board
recommendations for reducing industrial injuries and their cost in State
service.
-20-
Workmen's compensation expenses incurred for injuries occurring in Fiscal
Year 1966-67 amounted to $6, 369, 090 for self-insured departments and
$342, 012 for policy insured departments for a total cost of $6. 7 million.
If these costs continue to increase at their present rate, this figure will
exceed $12. 5 million by 1972. During the past fiscal year, disabling injuries
occurred at the rate of 18. 4 per million employee hours worked resulting
in 86, 115 days lost due to disability.
Back injuries are the largest single contributor to the injury rate, account-
ing for 13.9% of the occupational injuries and 21. 3% of the incurred costs
for self-insured departments during the Fiscal Year 1966-67. Cardiovas-
cular claims, while representing only 1% of the self-insured claims, ac-
counted for 20% of the incurred expenses during the same year. As a
major step in formulating an action program to reduce the frequency and
cost of disabling injuries, the Personnel Board met with representatives
of State departments and employee organizations in June 1968. Using the
information and recommendations presented at that meeting the Board
developed a recommended program which has been presented to the Gover-
nor's Cabinet. The program's overall objective is to reduce occupational
injuries by 10% in the next year. Among the steps designed to attain this
goal are:
Issuance of a Governor's policy statement to motivate departmental
action.
Cabinet Secretary review and evaluation of departmental accident
programs and their accountability for results.
Identification of accident reduction as a management and supervisory
responsibility.
Early return of injured employees to modified work assignments
suited to their physical condition.
Adoption of the 10% per year goal of reducing occupational injuries, and
departmental programs for its implementation. will focus the attention and
energies of supervisors and managers on a persisting problem. Quarterly
reports issued by the Personnel Board will assist managers in the evalua-
tion of program effectiveness.
-21-
APPENDIX
OUT-SERVICE TRAINING ANNUAL REPORT
1967 - 1968
Out-service or specialized training is a program that provides for the assign-
ment of State employees to recognized educational institutions and facilities to
receive training which meets specific agency needs for scientific, technical,
professional and administrative skills. This program is regulated by State
Personnel Board Rules. An annual report to the Governor and to the Legis-
lature is required by Government Code Section 19451. The following table
constitutes that report.
1967-68 Fiscal Year
After
Short Term
Part Time
Full Time
Department
Working Hours
No.
Man-
Direct
No.
Man-
Direct
No.
Man-
Direct
No.
Direct
Empl.
Days
Cost
Empl.
Days
Cost
Empl.
Days
Cost
Empl.
Cost
ABC **
AGRICULTURE
28
109
$ 2,948.85
3
179
$ 500.87
7
$
427.60
BANKING DEPT, STATE
1
10
401.10
CALIFORNIA DISASTER
OFFICE
6
35
515.00
CONSERVATION
8
35
906.08
1
7
35.50
10
1,175.00
CONTROLLER'S OFFICE
2
6.
-
CORPORATIONS
99
124
1,670.00
5
106.00
CORRECTIONS
*
EDUCATION
24
83-1/2
3,036.85
EMPLOYMENT
12
60
6,943.00
22
132
2,571.00
404
30,575.00
EQUALIZATION
11
78
3,118.11
1
25.00
FINANCE
13
57
3,348.00
24
892.00
STATE LANDS DIVISION
4
9
176.90
14
1,143.77
FISH AND GAME
6
44
1,713.00
3
92.00
FRANCHISE TAX BOARD
3
-
822.89
3
114.00
GENERAL SERVICES
29
61
2,602.50
2
5
86.00
3
120.00
HARBORS AND WATERCRAFT
2
5
72.00
HEALTH CARE SERVICES
1
2
119.00
HIGHWAY PATROL
49
172
6,857.35
1
32
$
85.00
8
354.00
HOUSING AND COMMUNITY
DEVELOPMENT **
INDUSTRIAL RELATIONS
19
100
1,394.35
2
15
122.65
19
419.58
INSURANCE **
JUSTICE
27
96
2,916.74
18
486.50
MENTAL HYGIENE
421
1,369
27,883.00
32
141
2,365.00
63
2,515.00
MOTOR VEHICLES
9
90
1,981.32
1
-
42.90
9
295.00
MILITARY DEPARTMENT
23
128
468.66
4
713
-
10
-
PARKS AND RECREATION
24
214
2,629.00
P&V STANDARDS
2
4
79.00
PUBLIC EMPLOYEES'
RETIREMENT SYSTEM **
PUBLIC HEALTH
61
197
6,836.31
14
33-5/8
213.40
9
186
1,610.79
33
1,350.06
PUBLIC UTILITIES
COMMISSION *
PUBLIC WORKS
138
597-1/2
22,975.44
18
3
1,420.50
103
2,310.40
REAL ESTATE
1
10
36.00
21
661.00
RECLAMATION
4
18
903.00
1
40.00
REHABILITATION
27
702
1,342.00
261
2,441
-
SAVINGS AND LOAN
70
187
3,727.31
8
433.98
SECRETARY OF STATE
1
4-1/4
-
SERVICE CENTER PROGRAM
21
21
456.65
33
755.00
SOCIAL WELFARE
48
80-1/2
3,502.02
20
1,724.00
SPB
7
36
1,724.49
1
3-1/8
75.00
23
568.24
VETERANS AFFAIRS
22
44-1/2
1,415.40
31
352.30
WATER RESOURCES CONTROL
BOARD
19
116
5,211.00
WATER RESOURCES
79
252
19,748.75
25
1,012.92
YOUTH AUTHORITY
66
137
3,617.67
10
26
241.00
49
1,155.25
TOTALS
1,338
4,567
$142,300.09
154
1,268-7/8
$9,397.47
276
3,375-1/8
$1,770.79
948
$49,103.60
*No funds available
**Figures not available
-23-
December 6, 1968
FROM: John F. Fisher
Executive Officer
State Personnel Board
801 Capitol Mall
Sacramento, California 95814
Telephone: 445-5291
FOR IMMEDIATE RELEASE:
1. The California State Personnel Board today transmitted to the Governor
its Annual Report on State Salaries. Board President, Samuel J. Leask
of Los Angeles, announced that the action was unanimous, concurred in
by Vice President, May Layne Bonnell of Sausalito, and Members Robert S.
Ash of Fort Jones, Nita Wentner of Walnut Creek, and Joseph L. Wyatt, Jr.,
of Los Angeles.
2. The Report notes that the rate of private industry salary increases
has clearly accelerated. Personnel Board surveys show that private
industry salary levels have increased 3.9% from March to October 1968.
This is the largest increase in this time period since World War II.
It is anticipated that the March 1969 Personnel Board surveys will
show an annual increase in private industry salaries of more than
6% for the period of March 1968 to March 1969.
3. The Board recommended in its Report that $39,713,000 from the General
Fund and $36,078,000 from Special and other funds be appropriated for
salary range increases for State civil service employees for the
Fiscal Year beginning July 1, 1969.
4. The appropriations recommended by the Board in the Report would permit
5% increases for practically all State civil service employees next
July plus additional adjustments for employees in classes in which
salary problems are particularly severe. These recommended increases
are necessary to place State salaries in line with salaries paid for
-2-
December 6, 1968
similar jobs in private industry and other public jurisdictions.
5. The last increase in State salaries was in July 1968. Most employees
received a 5% increase at that time.
6. In addition to including salary recommendations for the next fiscal
year, the Board's Report included comments on a number of other
personnel matters. The Board recommended that time and one-half for
overtime and night-shift differentials be provided to those State
employees whose counterparts in private industry enjoy such benefits.
The Board recommended that unemployment insurance be extended to
cover laid-off State employees under certain circumstances. The
Board also supported the proposal of the Board of Administration of
the Public Employees' Retirement System that the State contribution
to basic health plans be increased to cover the entire cost of the
basic plan to each employee.
7. Other subjects discussed in the Report included Employer-Employee
Relations, Sick Leave Administration, Executive Compensation, Workmen's
Compensation, and Employment Opportunities for the Disadvantaged.