State workers unions agree to new contracts

Oregon's two largest state employee unions have reached tentative contract agreements after months of bargaining, culminating in 14 hour sessions which ended late Tuesday night.

The contracts with Service Employees International Union (SEIU) 503 and American Federation of State, County and Municipal Employees (AFSCME) Council 75 bring their members pay raises, an extra paid holiday and in one union's case a change in how their retirement is funded.

SEIU 503 chapter agreed to a four-year contract with the state — a first for the union, which normally agrees to two-year contracts.

AFSCME Council 75 reached a tentative agreement on a two-year contract effecting more than 3,000 state workers. AFSCME also represents Oregon Department of Corrections employees, of which there are nearly 3,000, though they have not reached an agreement.

Both unions will be recommending their memberships ratify the agreements in about two weeks.

"All accounts that I've heard were that it was a collegial and cooperative process this time around, and the state appreciates it," said Matt Shelby, a spokesman for the Department of Administrative Services.

"I don't know if the word cooperation is the right word, but we really worked hard to solve an issue around healthcare," said Ken Allen, AFSCME Council 75's chief negotiator. Healthcare was the most important issue to AFSCME members.

SEIU executive director Heather Conroy said her union took big steps towards reaching the goals of its members as well.

"We're really proud that we've been able to not only secure on economic issues like healthcare and wages, but make significant advancement on issues like career development and access to training," she said.

"Any time you come to a tentative agreement that's a good thing. These are the two largest bargaining units we work with, so it represents significant progress," Shelby said.

Both contracts have similarities, including pay increases, cheaper healthcare premium splits and an additional paid day off.

The AFSCME contract gives employees a 5 percent Cost of Living Adjustment (COLA) — a pay increase —over the duration of the agreement. A 2.25 percent increase will kick in this December and a 2.75 percent increase will take effect December 2016.

For SEIU employees, a 1.48 percent COLA takes effect this December and a 2.75 percent increase takes effect in December 2016. SEIU has included in its agreement a re-opening period in 2017 where it will again negotiate the economics of its contract with the state.

Identical healthcare premium splits in both contracts will improve healthcare costs for state employees. The most expensive health care plans will be split 95-5 percent between the state and employees. The cheapest plans will be split 99-1 percent. Previously, the split for the cheapest plans was 97-3 percent.

Negotiating the 99-1 split was quite difficult, according to Allen. Many state workers in Eastern Oregon were unhappy with the previous contract's terms for being on the 97-3 split because although the premiums were cheaper, they applied to providers that didn't have large coverage networks. That left many in sparsely populated areas with fewer healthcare choices.

Now, any plan that costs 10 percent less than the more expensive plan will be eligible for 99-1 payment. Allen considers that a victory for thousands of state workers who care deeply about the availability of inexpensive yet high-quality healthcare.

Under the SEIU's agreement, the state will no longer "pick-up" a 6 percent contribution towards SEIU employee's Public Employee Retirement System accounts, as has been the policy since 1979. Instead, employees will now have that amount added to their pay, then automatically taken out through a payroll deduction.

"We feel like the reality is that that 6 percent is an employee's contribution," Conroy said of the new policy, which was negotiated to avoid confusion about how PERS contributions work. The policy change is not a pay increase, and if there are additional costs incurred by employees through payroll taxes, the state will increase the employee's pay by .95 percent to offset the costs.

"When SEIU did that it costs the state more money because of higher FICA and unemployment costs. That amount is equal to 0.77 percent on the first COLA, so that's why our percentages differ," Allen said. He added that changing the PERS pick-up policy was never on the table for the AFSCME agreement because its members wholeheartedly rejected the proposition.

Also in both contracts, the day after Thanksgiving will now be a paid day off.

"Getting the day after Thanksgiving off is a big deal," Allen said. "We've been trying to get it for 20 years. People are going to be very happy to have that as a paid holiday."

He said it's a valuable day for state workers to spend with their families (or shopping) when normally not much gets done at work the day after Thanksgiving.

"What's occurred is a lot of state agencies have just had skeleton crews come in and others just take a personal day, so it didn't make sense not grant it as a holiday," he said.

An agreement between the state and Department of Corrections, who are also represented by AFSCME, has not been reached. DOC employees are prohibited from striking because they're public safety workers, and in the event an agreement can't be reached, as was the case in 2014, the negotiations are sent to arbitration.

Allen anticipates that the sticking points for DOC bargaining are the same that faced the AFSCME negotiators yesterday: wages, health care and getting another paid holiday.

When asked if he thinks DOC negotiation will go to arbitration, Allen said he couldn't know. "They're different bargaining units and they sometimes have a different approach. We're very democratic and we'll let it play out for them," he said.

Bargaining for DOC workers is set to resume next month.

gfriedman2@statesmanjournal.com, (503) 399-6653, or on Twitter @gordonrfriedman