Pay for thousands of nonunion state government employees went up in the last year, well before September’s ratification of two dozen labor contracts promising the first general wage adjustments for union members in six years.
General government agencies quietly gave raises of more than 4 percent last year to 2,151 middle managers. The raises began after the Legislature’s formal freeze on pay was lifted effective July 1, 2013. Some staff members of the House and Senate and courts also received them.
Each agency had to pay for the upgrades — which topped out at 25 percent for a handful state employees — from their existing budgets, in some cases by leaving job vacancies unfilled.
The extent of pay hikes came to light during contract negotiations between Gov. Jay Inslee’s labor team and state employee groups, led by Greg Devereux of the Washington Federation of State Employees.
“It was a total shock to us. We thought they were frozen,” Devereux said of managers’ salaries, adding that union members were appalled by the discovery. “Whether it was a formal freeze or not, we thought they were getting nothing. ... The thing that really upsets the average state worker is those increases were for the highest-paid people in a year (when) the lowest-paid and moderately paid got nothing.’’
Line workers haven’t been completely left out. About the same time many nonrepresented employees were getting raises, almost two-thirds of rank and file were receiving “step” increases that ranged from 2.5 percent to 5 percent, according to the governor’s Office of Financial Management.
Such raises are typically given to those in their first six years on the job who are meeting standards, and the rule of thumb for many years had been that only one-third of eligible workers were getting them.
But the share getting step raises — nearly 64 percent of classified staff — in the last year was about twice as what has been typical year. That is because a new 13th step took effect in the labor contracts in mid-2013 for workers.
NONUNION RAISES ENDED 5-YEAR PAY DROUGHT
The Olympian and The News Tribune began looking into the pay issue after WFSE members said in September that pay raises for managers were, on average, higher than 6 percent — and in sharp contrast to line workers’ situations.
OFM quickly disputed the union’s early math, and the agency’s closer look found raises actually averaged 5.21 percent for 527 of the 1,061 employees statewide in the Exempt Management Services category. Raises averaging 4.77 percent went to 1,624 of the 3,826 managers in Washington Management Services in the same budget year, which ended June 30.
Overall, this meant raises went to about 44 percent of the two groups, which are not represented by unions. EMS employees are appointed and have no civil service protections, so they can be fired without cause; WMS workers have some protections but are not represented.
Glen Christopherson, the OFM assistant director who oversees the Human Resources division, said the pay adjustments ended a five-year pay drought for exempt and WMS staff who were not getting step raises that union workers did. In some cases, managers were paid less than underlings or saw workloads increase significantly due to consolidations in agencies; many were tied to performance and increasing duties.
By contrast, OFM said more line workers, or classified staff, got step increases tied to time in the job that were comparable with last year’s manager raises — and the step raises were given every year during the recession.
There were 49,150 executive branch employees in classified positions, and of those 15,192 received step increases of up to 5 percent and another 16,083 got increases worth 2.5 percent at the M step.
“Our math shows that 64 percent of classified executive branch employees got either step increases or step M,” OFM spokesman Ralph Thomas said.
OFM said in 2012 that adding the 13th pay step for unionized workers would cost $38 million over two years. The agency has no estimate of how expensive it was to give pay hikes to managers.
Devereux and others at the federation say OFM’s attempt to compare manager pay with step pay is unfair. That is because yearly increments or steps are a way for state government to phase in the true cost of an employee over several years, in effect saving taxpayers on the true value of a worker. Also, the union argues that custodians, food services workers and other low-paid staffers are having a harder time while many managers, by WFSE’s calculation, earn pay that averages more than $70,000.
Devereux said the key point is that managers were getting pay increases and the public didn’t know it was happening.
RAISIES VARIED BY AGENCY
Different agencies and branches of government handled the raises differently. At the Department of Corrections, raises averaged about 3 percent, according to OFM data. A few raises went as high as 5.5 percent.
DOC’s pay adjustments cost the agency $1.3 million, according to Secretary Bernie Warner, who said the money came from across agency operations. DOC has been under severe budget pressures in recent years during which it shut down several prison facilities and reduced staffing, increasing workloads for many.
“The last four or five years there have been a lot of reductions. … Folks have really stepped up to make sure we maintain the quality operations we want,” Warner said last week. “The (increase) to me is something, I’m sure from a staff perspective, they feel over five years it doesn’t keep them up with inflation.”
In some agencies raises were higher — averaging 8 percent for all 79 Exempt Management Services workers at the Gambling Commission, 9.8 percent for two WMS staffers at the Office of the Secretary of State, and nearly 12 percent for two staffers at Retirement Systems. More than 500 raises averaging nearly 5 percent were given at the Department of Social and Health Services, the state’s largest agency, at a cost of $1.3 million from the general fund, $2.1 million from all programs.
In a few cases individual raises were as high as 25 percent — one at the Department of Health, one at the Gambling Commission, and three at Employment Security.
“The three who received the largest increases were WorkSource administrators across the state,” Employment Security spokeswoman Janelle Guthrie said. After the pay freeze lifted, the agency “reviewed salary alignment and made adjustments to improve fairness for employees across the state.”
Spokesmen for legislative branch and judicial branch agencies say raises also occurred there for virtually all staff once the freeze lifted. Prior to that some raises were given in individual cases in order to retain valued workers who got better offers elsewhere.
Inslee also adjusted pay last year for some select positions in his executive cabinet and some low-level support personnel in his own office.
UNION WORKERS POISED FOR PAY BUMPS
Devereux said he thinks his union’s research on the topic of managers’ pay might have helped secure a better wage agreement — 4.8 percent increases in base pay over two years — than Inslee’s team was initially offering.
Inslee was already on record in favor of raising pay modestly, but unions were adamant about seeing significant pay raises this year after going six years without a cost-of-living adjustment for their members.
The federation and other unions such as Washington Public Employees Association have settled for raises of 3 percent in July 2015 and another 1.8 percent or more in July 2016. One-time adjustments ranging from 2.5 percent to 15 percent will go to a few thousand additional workers in positions that are underpaid compared to peers or were experiencing high turnover.
Some workers also can expect step increases. But David Schumacher, director of OFM, says the step increases for line workers are unlikely to touch as large a share of classified staffers this year or next year, because the 13th or M step was a one-time adjustment.
Inslee’s budget office still has to determine formally whether the contracts are financially feasible. The state faces a shortfall of $1 billion to $3 billion in the next budget cycle, depending what lawmakers decide they need to do to comply with a state Supreme Court order to increase K-12 school funding.
OFM’s estimate is that the total bill will be at least $583 million from the state’s general fund, if terms of more than two dozen contracts for wages and health care are extended to all workers in general government, higher education and private home care workers paid out of the state’s Medicaid program.