1715 - Employee Compensation Request Policy

Category

Compensation

Audience List

• Budget Officers
• Employee Relations Officers
• Labor Relations Officers
• Personnel Officers
• Personnel Transactions Supervisors

Synopsis

This policy:

• Describes parameters for requests for employee compensation that will be considered based on annual budget conditions.
• Explains the process for departments to submit requests for changes to employee compensation.
• Identifies the timeframes to submit requests for employee compensation.
• Provides instructions to departments on how to complete the request form.
• Identifies what information is required to be submitted with any employee compensation request.

Introduction

Government Code section 19826 authorizes CalHR to “establish and adjust salary ranges for each classification of position in the state civil service subject to any merit limits contained in Article VII of the California Constitution.” Pursuant to Government Code section 3517, the Ralph C. Dills Act, changes to the wages, hours, and other terms and conditions of employment for rank-and-file employees must be negotiated with representatives of recognized employee organizations. By law, CalHR represents the Governor as the state employer in such negotiations.

Statement

This policy outlines the process for departments to submit employee compensation requests for bargaining units with contracts expiring in 2025. This policy also applies to employee compensation requests for related excluded employees tied to those bargaining units. For employee compensation requests to be considered, requests must be supported by a critical program need and may require the requesting department(s) to certify availability of departmental funding for the request.

This policy addresses the process for departments to request employee compensation changes to address any of the following critical needs:

• Recruitment and retention difficulties, including:
  • Significantly high vacancy or turnover rates
  • Location-based challenges
  • Upward Mobility
  • Alternate shift assignments
• Pay equity concerns
• Special professional or educational certification
• Performance of atypical duties
• Recognition of special but temporary responsibilities
• Acquisition or possession of special licenses, skills, or training
• Incentive-based pay
• Compaction issues
• Benefits and allowances such as safety footwear, professional dues, etc.
• Other special compensation-related considerations that impact a classification or subgroup within a classification series

Effective July 1, 2024, the discretionary authority to provide a Hiring Above Minimum (HAM) salary rate will be eliminated. Departments must use the Employee Compensation Request process to request all forms of employee compensation, including a HAM Plus Rate, which authorizes a higher entry rate for a classification as listed in Pay Scales Section 5.

Beginning in 2025, CalHR will perform an annual review of the Pay Scales Section 5 list of classifications as part of the Employee Compensation Process. The Pay Scales Section 5 list will be revised as new classifications are added and others are removed.

The HR Manual Section 1707 - Hiring Above Minimum will be updated to reflect this change effective July 1, 2024.

The State of California anticipates significant budget deficits in Fiscal Years 2023-24 and 2024-25. It is vitally important that state government is efficient, effective, and only expends funds that are necessary to the critical operation and security of the state. As such, all employee compensation requests should be scrutinized by departments prior to submission to ensure all non-employee compensation solutions have been exhausted.

Employee Compensation Requests for Upcoming Bargaining

For bargaining contracts expiring in calendar year 2025, departments must submit requests to EmployeeComp@calhr.ca.gov no later than June 1, 2024. Failure to submit a complete request may result in delays in reviewing the request or possible denial of the request.

The following bargaining unit contracts will expire on or around July 1, 2025:

• Unit 2 - California Attorneys, Administrative Law Judges, and Hearing Officers in State Employment (CASE)
• Unit 6 - California Correctional Peace Officers Association (CCPOA)
• Unit 9 - Professional Engineers in California Government (PECG)
• Unit 13 - International Union of Operating Engineers (IUOE)
• Unit 16 - Union of American Physicians and Dentists (UAPD)
• Unit 18 - California Association of Psychiatric Technicians (CAPT)
• Unit 19 - American Federation of State, County, and Municipal Employees (AFSCME)

Employee Compensation Requests Outside Normal Bargaining Timeframes

During the term of an existing contract, there may be critical needs that arise that warrant submission of an employee compensation request prior to the expiration of the contract. These requests must be a result of at least one of the specific criteria below:

• Legislative mandate
• Executive Order
• Health or safety emergency
• Loss of funding/increase of funding
• Critical need to fulfill department’s primary mission/objective
• Potential failure of business operations
• Other urgent need as demonstrated by the department

Departments are required to submit these requests to EmployeeComp@calhr.ca.gov no later than June 1, 2024. Failure to submit a complete request may result in delays in reviewing the request or possible denial of the request.

Requests Not Subject to this Policy

Requests for items that do not involve employee compensation should be submitted to either the CalHR Personnel Management Division or CalHR Labor Relations Division as follows:

Personnel Management Division (PMD): Classification requests that do not result in employee compensation increases should continue to be directed to PMD via email at PMD@calhr.ca.gov or the department’s assigned PMD Consultant. If the department is unsure if the request falls into this category, please reach out to the PMD Consultant in advance of submitting any requests. Examples of non-compensation items for PMD include classification specification changes, alternate range criteria changes, classification consolidations, or questions regarding allocations, delegated personnel functions, etc.

Labor Relations Division (LRD): Other items for bargaining should be submitted to CalHR’s LRD via email at LR.info@calhr.ca.gov as part of the annual Harvest Memo process. These items may include contract language changes or changes related to other terms and conditions of employment.  The Harvest Memo process does not involve employee compensation, reimbursements, allowance, or any other monetary subjects.

Application

Departments interested in submitting a request are required to complete the CalHR 142 and email it to EmployeeComp@calhr.ca.gov no later than June 1, 2024. Departments must include all supporting documentation to provide CalHR ample time to review, analyze, and make a determination on the request. For more information on the Employee Compensation Request process, please review the Employee Compensation Training presentation located on HR Net.      

Please note: A separate request package should be submitted for each problem needing to be addressed with compensation.

CalHR will confirm receipt via email once the request has been received and will provide a CalHR tracking number for each request submitted. Departments must use this number in all future correspondence with CalHR pertaining to the request. 

Department Directors and/or Agency Secretaries should approve any requests submitted.

Timeline

• February 2024-May 2024 CalHR issues annual policy in February identifying the bargaining unit contracts expiring the following year. Departments are responsible for reviewing this policy each year as parameters may change. Departments should also consult with the Employee Compensation Unit if guidance is needed. Departments will then begin to compile data and information for their requests and may consult with the Employee Compensation Unit as needed. During this time, departments will be given an opportunity to present their requests to CalHR and respond to any preliminary questions. CalHR will use these meetings to share if additional data or information is needed. 

• June 1, 2024 Employee compensation requests are due to CalHR.

• June 2024– October 2024 CalHR will analyze requests submitted from departments and determine which requests may be considered during the bargaining cycle.

• November 2024– September 2025 CalHR prepares for upcoming bargaining and will consider items submitted through this process (compensation requests). Collective bargaining will also occur during this period. During this time, CalHR may not be able to share any updates on requests.

CalHR will work closely with departments throughout the process. At the conclusion of bargaining, CalHR will communicate the outcome to the Department Director and/or Agency Secretary departments.

Authorities

• California Budget Act, Item 9800
• Government Code section 19826
• Government Code section 3517.5
• Government Code sections 3512 to 3524

Resources

Forms

• CalHR-142: CalHR-142 Employee Compensation Request
• CalHR-142 Instructions: CalHR-142 Instructions
• CalHR-142 Spreadsheet Template: CalHR-142 Spreadsheet Template

Related Policies

• Policy 1707: Hiring Above Minimum (HAM)

Web Pages

• Bargaining / Contracts: Bargaining Unit Memoranda of Understanding
• Civil Service Pay Scales: Civil Service Pay Scales
• Pay Differentials: List of Pay Differentials

Authorized By

Stephan Higginbotham
Chief, Financial Management Division

Contact Person

Financial Management Division
Employee Compensation Unit
Email: employeecomp@calhr.ca.gov

Superseded Policies

History

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