Thousands of non-union workers to receive longevity bonuses

While most veteran unionized employees are forfeiting their longevity pay as part of the labor concession deal, thousands of non-union workers, including several top officials in Gov. Dannel P. Malloy’s administration, will share millions of dollars in seniority bonuses next month.

The Department of Administrative Services declined Thursday to release a preliminary list of staff slated to receive longevity payments next month. Department spokesman Jeffrey Beckham said it still was being adjusted to reflect resignations, retirements and layoffs over the past six months. But longevity pay is issued twice yearly and 3,599 non-union staff received such bonuses, worth about $7 million in April.

Malloy’s budget chief argued that a new longevity cap imposed on non-union employees earlier this year will save more money over the next 30 years. But he conceded that the administration executives and managers with the most years of service will sacrifice nothing.

Non-union workers would have shared in the longevity pay cutbacks had union workers approved the first labor concession deal. After that deal was rejected in June, however, legislation cutting bonuses for non-union workers was repealed, and it wasn’t reinstated when the deal passed in a second vote.

Key lawmakers from both parties were surprised to learn that the cuts in longevity pay for non-union workers had been revoked.

“This is not apples and apples,” said House Minority Leader Lawrence F. Cafero, R-Norwalk, one of Malloy’s most vocal critics. Cafero noted that while Malloy imposed an across-the-board longevity bonus cap on his top executives in January, many of those same executives will collect thousands of dollars in bonuses in a few weeks. “What looked like a grand fiscal gesture in January has turned out to be a windfall in October for Malloy’s senior staff,” he said. “Where is the shared sacrifice?”

“Oh my God,” said Sen. Edith G. Prague, D-Columbia, co-chairwoman of the Labor and Public Employees Committee. “It’s outrageous.”

The longevity pay system, first created by statute in 1967 and subsequently guaranteed in most union contracts since then, rewards most workers with biannual bonuses after they have achieved 10 years of service. The statutes also call for higher bonuses after workers hit their 15-, 20 and 25-year anniversaries, after which longevity pay is capped.

The bonuses, paid to most eligible workers in April and October, have been an increasing source of controversy at the Capitol amid the fiscal crises of recent years.

Prague, who chastised state employee unions for initially rejecting a concession deal in June before ratifying on a second vote in August, added Thursday that non-union workers should have to make some immediate salary sacrifice.

That appeared to be the plan on June 7 when the legislature enacted a budget policy statute that the administration “shall implement changes to longevity payments for such (non-union) officers and employees comparable to the longevity payment provisions of the agreement” with the State Employees Bargaining Agent Coalition. Malloy signed that into law on June 21.

But on June 30, that language was repealed in another budget policy bill adopted in special session and also signed by Malloy. Instead the administration was directed to apply the longevity pay cap it had imposed on to executives to all non-union staff.

The executive cap was ordered by Malloy on Jan. 21, and applied to about 50 top officials. It said the officials could not earn higher payments in future years, even if they had fewer than 25 years of service.

The order also stipulated that those who hadn’t received a longevity payment in October 2010–such as legislators who left that branch in January to join his administration–would not be eligible for bonuses in the future.

By expanding these ground rules to all non-union workers, the June 30 legislation did two things:

  • It blocked all non-union staff who have not yet qualified for longevity payments from ever receiving them.
  • And it also locked those who do receive them from receiving any future increase in their bonus, regardless of how many years of service they accrue.

By comparison, the concession deal means about 39,800 unionized employees will forfeit their entire longevity payment this year. Another 5,200 union members, primarily involving higher education faculty and Judicial branch professionals, will forfeit 25 percent of their October payment.

About $13.2 million in longevity payments went out to more than 28,640 unionized employees in April.

“The current system has been unfairly skewed towards management–but we have always said that on the merits longevity bonuses make good fiscal sense,” State Employees Bargaining Agent Coalition spokesman Matt O’Connor said. “They encourage the workforce to continue their public service careers. And we believe that longevity bonuses also justly reward workers for decades of service to their employer. Plus they save millions in retraining costs and improves the quality of services that we all count on.

But Malloy’s budget director, Office of Policy and Management Secretary Benjamin Barnes, noted that while these groups will lose money now, they and any other unionized employees hired before June 30 this year remain in the longevity pay system and will be able to qualify for increasing bonuses down the road.

By comparison, all non-union workers shy of 10 years of experience never can qualify for longevity pay under the new system, and those that are eligible to receive them next month won’t see those bonuses increase in the future.

“We believe that the savings we are imposing here is significantly greater over the long-term,” he said.

But 38 out of the 41 salary groups for unionized workers call for longevity bonuses ranging from $75 to $998, and the last allow workers to earn between $1,000 and $1,100 after they reach 25 years of service. Bonuses in the middle three salary groups range from $114 to $568.

By comparison, 18 of the 20 bonus levels Malloy executives can qualify for top $1,000, ranging as high as $5,600.

And Barnes conceded that those executives who already topped out under the old system because  they had more than 25 years of experience — such as deputy OPM Secretary Mark Ojakian, who negotiated the concession deal — aren’t penalized at all under the new system, which simply reinforces an existing cap.

Ojakian, who received a $4,800 payment in April, will not lose his in October and his payments weren’t slated to increase under either the old system or the new one. A former deputy state comptroller before moving in January to the Malloy administration, Ojakian declined to comment Thursday.

And even those executives who have fewer than 25 years of state service might need to work two to four more years, Cafero noted, before the capping system would cost them enough to equal what they otherwise would lose if they had to forfeit their October payment instead.

“This is the problem,” Prague said. “Executives and managers already make good salaries. There’s not a balance here.”

For example, three top scientists at the state’s agricultural experimental station qualified in April for bonuses above $4,100.

Over 18 non-union staffers in the state auditors’ office earned bonuses in excess of $4,000 last time.

“Of course there are examples where management salaries — and as a result, their bonuses — are out of whack,” O’Connor added. “The solution is to do the hard work of transforming state government so that resources are redirected to the people who need services and the workers who deliver them.”

“And that’s our focus right now — holding the Malloy Administration to their obligation to work with us to make state government work better and be a better place to work,” he added.

Barnes added that even though the administration signed legislation in early June that would have required non-union longevity pay to be adjusted comparable to any unionized concessions, it believes such a move might be challenged in court as an illegal taking of salary.

In a 2007 decision, the Connecticut Supreme Court ruled that final, pro-rated longevity payments earned by two retiring assistant attorneys general had to be included in their pension calculations.