Personnel & Labor Relations

Session Overview

AWC’s 2007 legislative agenda included two top priorities related to personnel issues – PERS gain-sharing and LEOFF 1 retiree medical and long-term care costs.

The most pressing need was to address gain-sharing. Gain-sharing was a benefit granted a number of years ago to members of Plans 1 and 3 of PERS, TRS and SERS, without clear information regarding the ongoing costs. The Governor, legislative budget writers and local governments all sought to eliminate the benefit. Some employee groups were resigned to the elimination of the benefit but only in exchange for other benefits. Other employee groups opposed elimination of the benefit altogether.

In the end, the Legislature eliminated the benefit but at a cost to local governments nearly equal to the cost of gain-sharing. The details of EHB 2391 are outlined below. The Washington Education Association was not pleased with the final outcome and has already filed legal action challenging the elimination of the gain-sharing benefit. The Legislature anticipated legal action and included in the bill a clause voiding the new benefits if the courts reinstated gain-sharing. Clearly, this issue is not resolved.

The second priority issue was LEOFF 1 retiree medical liability. The Legislature did include in the Operating budget additional resources for the State Actuary to help cities identify their specific liability. The State Actuary will also compile state-wide data. City-specific data will help cities meet their GASB 45 reporting requirements beginning in 2008. In addition, at the direction of the Governor, the Department of Retirement Systems and the State Health Care Authority have begun a comprehensive review of the LEOFF 1 retiree medical benefit and associated costs to local governments. We are working with these state agencies in an effort to identify and secure assistance for cities, counties and fire districts. Please watch for updates on this study in our monthly interim Legislative Bulletins.

We found ourselves on the defensive end of the other significant personnel proposals this year. Outlined below under “Major Bills” are three bills AWC opposed:

• SSB 5340, changing the definition of disability;
• SSB 5659, establishing a family leave insurance program; and
• SHB 1833, expanding the presumption of diseases for firefighters.

We worked with others and successfully reduced the impacts of these bills from their original proposals, but all three measures still place additional burdens on cities. We are especially concerned about the new definition of disability under SSB 5340 and potential additional liability. We will need your help to monitor the impacts of this bill.

Finally, the Legislature reviewed but did not resolve the issue of additional resources for a new significant LEOFF 2 benefit. Key legislators support proponents’ desire to enhance this pension system but have told them they must identify new financial resources because neither the state nor local governments can afford a significant benefit enhancement. We expect a great deal of work on this issue over the interim and during the next session. Gain-sharing may also be back next year, depending on the courts.

Major Bills

Eliminating Gain-Sharing and Providing Alternative Benefits (EHB 2391)

This bill eliminates the gain-sharing benefit for Plans 1 and 3 of the Public Employees’ Retirement System (PERS), Teachers’ Retirement System (TRS), and the School Employees’ Retirement System (SRS) after one additional disbursement in 2008.

Because the gain-sharing benefit was so costly, elimination of gain-sharing after one additional disbursement was an AWC priority for the 2007 session. However, this bill provides additional benefits in exchange for the elimination of gain-sharing, wiping out most of the expected savings. The most significant – and most costly – benefit enhancement affects members of Plan 2 and 3 of PERS, SERS and TRS. Effective July 1, 2008 (September 1, 2008 for TRS and SERS), the bill provides a different early retirement option for members with 30 years of service, allowing them to retire with unreduced benefits at age 62.

Members with 30 years of service who are between 55 and 61 may also retire early with reduced early retirement reduction factors: 2% for a 61-year old member, 5% for a 60-year-old member, and, for members between ages 55 and 59, an additional 3% per year for each year they are younger than 60. The improved early retirement reduction factors go into effect on July 1, 2008.

The bill also provides for an increase in the PERS Plan 1 Uniform COLA effective July 1, 2009, and includes other changes applicable to TRS and SERS only.

All of the benefit enhancements are contingent upon the repeal of gain-sharing. If the courts order reinstatement of gain-sharing benefits, the new benefits would be repealed (except for those who have already retired). The Washington Education Association has already filed suit challenging the repeal of gain-sharing – on the same day the Governor signed the bill. Obviously, it will take the courts some time to act.
Members who retire under the improved early retirement reduction factors are prohibited from drawing their retirement benefits during periods when they work in any compensated capacity for a retirement system employer. (Other retirees can be rehired into eligible positions and work for limited hours while still receiving their pensions.) This restriction ends when the employee reaches age 65.

[C 491 L 07; Effective Date: July 22, 2007 for most sections; sections 1, 3, and 7 are effective July 1, 2007.]

Defining Disability in the Washington Law Against Discrimination (SSB 5340)

In a 2006 decision, McClarty v. Totem Electric, the State Supreme Court provided clarity for employers by adopting the same definition of disability for Washington as the definition in the federal Americans with Disabilities Act. The legislative findings in SSB 5340 state that the McClarty opinion fails to recognize that Washington's antidiscrimination law provides protections independent of federal law.

In the bill, "disability" is defined as a sensory, mental, or physical impairment that is medically cognizable or diagnosable, or exists as a record or history, or is perceived to exist, whether or not it actually exists. The "disability" exists whether it is temporary or permanent, common or uncommon, mitigated or unmitigated, or whether it limits the ability to work or engage in any other activity encompassed within Washington's anti-discrimination law. "Impairment" includes a physiological disorder, cosmetic disfigurement, anatomical loss affecting one or more of several specified body systems, and mental, developmental, traumatic, and psychological disorders.

For purposes of qualifying for reasonable accommodation in employment, the employee's impairment must be known by the employer, or be shown through an interactive process to exist in fact. The impairment must either have:

• A substantially limiting effect upon the individual's ability to perform his or her job, to apply or be considered for a job, or to access equal benefits, privileges, or terms of employment; or
• The reasonable likelihood that engaging in job functions without accommodation would aggravate the impairment to the extent that it would create a substantially limiting effect.

These definitions will apply to all causes of action that occurred before July 6, 2006 (the date of the McClarty decision) and to those that will occur after the effective date of the act, July 22, 2007.

[C 317 L 07; Effective Date: July 22, 2007]

Establishing Family and Medical Leave Insurance (E2SSB 5659)

This bill outlines a basic framework for a family leave insurance program, which would go into effect on October 1, 2009. It would provide $250 per week for a maximum of five weeks of leave taken by a parent following birth or adoption of a child, and would mandate job protection for employees taking leave if they work for an employer with more than 25 employees.

It establishes a 13-member joint legislative task force to study the establishment of a family and medical leave program and report its findings and recommendations, including proposed legislation, to the Legislature by January 1, 2008.

It does not specify the state agency responsible for administering the family leave insurance program, nor does it establish premiums to finance the benefits, instead directing the task force to make recommendations on both issues.

It states that leave under the bill must be taken concurrently with leave taken under the federal Family and Medical Leave Act or the state Family Leave Law, and permits employers to require that leave under the bill be taken concurrently or otherwise coordinated with leave allowed under collective bargaining agreements or employer policies.

[C 357 L 07; Effective Date: July 22, 2007 for most sections; sections 2 and 19-25, which relate to the task force and initial administrative expenses, took effect on May 8, 2007; sections 3-18 and 26, which relate to the payment of benefits, take effect July 1, 2008.]

Expanding the Presumption of Diseases for Firefighters (ESHB 1833) – Partial Veto

The bill expands the diseases and conditions that are presumed to be job-related for firefighters for workers’ compensation purposes, including certain heart injuries and additional cancers.

A presumption is added for heart problems that are experienced within 24 hours of strenuous physical exertion due to firefighting activities. "Firefighting activities" means fire suppression, fire prevention, emergency medical services, rescue operations, hazardous materials response, aircraft rescue, and training and other assigned duties related to emergency response.

Certain cancers are added to the list of cancers presumed to be occupational diseases: prostate cancer diagnosed prior to the age of 50, colorectal cancer, multiple myeloma, and testicular cancer.

Under the bill, a firefighter is entitled to attorney fees and other costs when the presumption is upheld on appeal.

The original version of the bill changed the evidence standard from “a preponderance of the evidence” to “clear, cogent and convincing evidence”– which would have made it virtually impossible for an employer to rebut the presumption. This change was not included in the version of the bill that passed.

[C 490 L 07 Partial Veto; Effective Date: July 22, 2007]

Partial Veto: Governor Gregoire signed the bill on May 15 after vetoing the Legislature’s statement of intent in Section 1. She noted that this section made broad generalizations about the incidence of cardiovascular disease and was concerned about the unintended interpretations of broad generalizations.

Minor Bills

Revising Veterans’ Scoring Criteria in Examinations (HB 1065)

This bill clarifies that veterans’ preference points for civil service exams must be given whether the government employer administers the exams or hires a private company to do so. For veterans returning to employment after active military service of one or more years, five percentage points will be added to the score of every promotional examination until the veteran's first promotion, instead of to the score of one promotional examination only.

[C 449 L 07; Effective Date: July 22, 2007]

Defining Wages for Industrial Insurance Purposes (SHB 1244)

An injured worker’s time-loss benefit under the workers’ compensation system is based on the worker’s wages. This bill clarifies that for purposes of calculating time-loss payments, wages include the employer's payment or contributions for health care benefits unless the employer continues ongoing and current payment or contributions for these benefits at the same level as provided at the time the worker was hurt.

[C 297 L 07; Effective Date: July 22, 2007]

Purchasing Service Credit for Periods of Temporary Duty Disability (SHB 1261)

The provisions for state or local government employees to purchase service credit for time spent away from work due to an on-the-job injury vary depending upon the retirement system. This bill makes the provisions more uniform, allowing members of LEOFF 2, TRS, SERS, and PSERS who are injured in the course of employment to purchase up to 24 consecutive months of service credit for each period of temporary duty disability, if the member received industrial insurance benefits for the injury period.

The member must pay the required employee contributions for the period of temporary duty disability, and after the member contributions are made, the employer will then be billed for employer contributions for the same period. (These are the same provisions already in effect for PERS members, due to legislation passed in 2005.)

[C 49 L 07; Effective Date: July 22, 2007]

Regarding Public Employment of Retirees (SHB 1262)

This bill imposes restrictions on rehiring members of Plan 1 of the teachers’ retirement system that are similar to restrictions on hiring PERS 1 retirees that were enacted in 2001 and 2003.

For both plans, prior written or oral agreements between an employer and employee to resume employment with the same employer are prohibited. This bill clarifies that mere expressions or inquiries about post-retirement employment by an employer or employee that do not constitute a commitment to rehire the employee are not considered an agreement.

[C 50 L 07; Effective Date: July 22, 2007]

Addressing Portability of Retirement Benefits (SSB 1264)

The bill amends the chapter providing portability of pubic employee retirement benefits to remove certain adverse impacts on public employees who change retirement systems during the course of their careers.

[C 207 L 07; Effective Date: July 22, 2007]

Addressing Death Benefits for Public Employees (SHB 1266)

This bill stipulates that the $150,000 death benefit for members of Washington’s retirement systems is payable upon death due to an occupational disease or infection that arises in the course of employment, as well as from injuries sustained in the course of employment.

[C 487 L 07; Effective Date: July 22, 2007]

Amending the Process for Adopting Contribution Rates for the State Retirement Systems (SB 5014)

This bill implements a number of changes recommended by the State Actuary regarding the process and timing for adoption of contribution rates used to help fund the various state retirement systems. The bill specifies that the Pension Funding Council and the LEOFF 2 Retirement Board will adopt rates by July 31 of even-numbered years instead of September 30, and that economic assumptions will be evaluated in odd-numbered years instead of every four years, in the fall instead of the spring, beginning in the fall of 2007.

[C 280 L 07; Effective Date: July 22, 2007]

Protecting Veterans and Military Personnel from Discrimination (SB 5123)

This bill amends Washington’s Law Against Discrimination to prohibit discrimination based on a person's status as a veteran or member of the military, as it relates to employment and other transactions and activities.

The bill defines "veteran or military status" to include any honorably discharged veteran as defined in RCW 41.04.007, and any active or reserve member in any branch of the armed forces of the United States, including the National Guard and Coast Guard.

[C 187 L 07; Effective Date: July 22, 2007]

Regarding Annual Increases in Certain Retirement Allowances (SB 5175)

This bill changes the age requirements for COLA eligibility in PERS 1 and TRS 1 so that a member must have been retired for at least one year by July 1 and reach age 66 by December 31 in order to be eligible for the adjustment given during that year.

[C 89 L 07; Effective Date: July 1, 2007]

Authorizing Six-Year Collective Bargaining Agreements (SSB 5251)

This bill amends the Public Employees' Collective Bargaining Act (PECBA) to increase the maximum allowable term for collective bargaining agreements between cities, counties, municipal corporations, and school districts and their respective employees from three to six years.

[C 75 L 07; Effective Date: July 22, 2007]

Providing Certain Domestic Partner Rights and Benefits (SSB 5336)

This bill creates a state domestic partnership registry and provides enhanced rights for same-sex couples, including hospital visitation, the ability to authorize autopsies and organ donations, and inheritance rights when there is no will.

Couples would have to share a home, not be married or in a domestic relationship with someone else and be at least 18. Unmarried heterosexual couples will also be eligible to register as domestic partners if one partner is at least 62.

Although SSB 5336 does not affect domestic partnerships created by a city or other subdivision of the state, state registry is required in order to obtain the benefits under this law. The bill includes other provisions regarding coordination of state and local domestic partnerships.

[C 156 L 07; Effective Date: July 22, 2007]

Suppressing Workers’ Compensation Claims (SSB 5443)

This bill prohibits employers from engaging in claim suppression and subjects them to monetary penalties between $250 and $2,500 for each offense. "Claim suppression" is defined as intentionally inducing employees to fail to report injuries; inducing employees to treat injuries in the course of employment as off-the-job injuries; or otherwise acting to suppress legitimate workers' compensation insurance claims. Claim suppression does not include bona fide workplace safety and accident prevention programs.

[C 77 L 07; Effective Date: July 22, 2007]

Bills That Failed

Extending Military Leave for Public Employees (HB 1127)

The bill would have increased the amount of paid military leave public employers must provide to employees on active military duty or active training duty from fifteen days to thirty days.

Regulating Employment Decisions Based on the Consumption of Lawful Tobacco Products (SHB 1154)

Aimed at protecting the rights of smokers, this bill would have prohibited employers from requiring employees or applicants to:

• Disclose whether they had consumed lawful tobacco products at any time, or
• Agree not to consume lawful tobacco products off the premises of the employer during non-working hours.

Providing Retirement Benefits at Earlier Ages (HB 1199)

This bill would have allowed members of PERS 2 and 3 and plans 2 and 3 of the teachers’ and school employees’ retirement systems to retire with an unreduced retirement benefit if they were at least age 55 and the sum of their age and years of service equaled 85 or more.

Regarding Injured Worker Medical Rights (2SHB 1503)

This bill would have made a number of policy changes within the state workers’ compensation system, granting additional rights to claimants and establishing additional requirements and restrictions on the Department of Labor & Industries, employers, and medical providers.

Concerning Contracts for Correctional Industries Services (SHB 1762)

This bill would have prohibited local governments from contracting for inmate labor with the Correctional Industries division of the State Department of Corrections if doing so would result in the termination of unionized employees, unless there had been a prior agreement that bargaining unit work could be performed by prison labor.

Modifying Gain-Sharing Benefits (HB 1771/SB 5779)

This legislation, advanced by the Governor, would have eliminated Plan 1 and Plan 3 gain-sharing, provided an adjustment to the Plan 1 COLA, and allowed current Plan 3 members to contribute to an optional "assured benefit program" that would have in effect provided them with a two-percent benefit formula at retirement.

Regarding Survivors of Pre-LEOFF Firefighters (HB 1824)

This bill would have allowed survivors of pre-LEOFF firefighters killed in the line of duty or retired because of a duty-related disability to remarry without losing their survivor pension benefits.

Certifying Unions Without an Election (SHB 1913/SSB 5772)

This legislation would have changed the Public Employees’ Collective Bargaining Act by lowering the threshold for certifying a union by signed authorization cards (rather than through an election) from 70% to a simple majority.

Modifying Gain-Sharing Benefits and Increasing Contributions to Unfunded Liabilities (HB 2116)

This bill would have increased the investment return threshold that triggers a gain-sharing event (from an average of 10% for four years to 14%), limited Plan 3 gain-sharing to those members hired prior to July 1, 2007, and established additional employer contribution rates to amortize the unfunded liability in Plan 1 of PERS & TRS.

Protecting the Integrity of Public Sector Collective Bargaining (SHB 2326)

This bill would have created a public disclosure exemption for records from any public employee collective bargaining, labor negotiations, or grievance or mediation that would reveal strategies or positions taken by any employer or labor organization during those proceedings.

Exempting Labor Relations Materials from Collective Bargaining (SHB 2348)

This bill would have amended state collective bargaining law to make it clear that records of mediations and evidence submitted as a showing of interest in support of any representation petition are confidential and privileged and not subject to public disclosure.

LEOFF 2 Pension Improvements (SHB 2381)

This bill would have used the additional revenue to the state from voluntary compliance under the Streamlined Sales Tax legislation, in excess of amounts needed for local government mitigation, for LEOFF 2 pension enhancements. The bill did not define the pension enhancement. The State Treasurer would have been directed to transfer state voluntary compliance revenue, but not exceeding $12.5 million per quarter. The transfer would have been divided equally between the LEOFF 2 fund and to local jurisdictions for public safety purposes. The distributions to cities, counties and fire districts for public safety purposes would have been apportioned based on the number of law enforcement officers and firefighters employed within the local jurisdiction as a percentage of the total number of officers.

The bill failed this year but we expect significant legislative discussion on the issue during the interim and the introduction of similar legislation in 2008. This issue is a top priority for police and fire employee groups.

Modifying Gain-Sharing Benefits (SHB 5668)

The bill would have eliminated gain-sharing benefits for future members of Plan 3 of PERS, TRS and SERS, retaining the benefit for those hired prior to July 1, 2007. It would also have provided newly-hired TRS and SERS members with the choice of joining either Plan 2 or Plan 3 (new PERS members already have this choice).

Defining “Employer” in the Washington Law Against Discrimination (SSB 5873)

The Washington Law Against Discrimination protects individuals from discrimination based on race, color, creed, national origin, sex, sexual orientation, the presence of any sensory, mental, or physical disability, or the use of a trained guide dog or service animal. In the employment context, the law exempts employers with fewer than eight employees. This bill would have made the law apply to all employers with at least one employee.

Addressing LEOFF 2 Retiree Medical Coverage (SSB 5589/HB 1678)

These bills would have allowed retired members of LEOFF 2 to purchase health care benefits through the Washington State Health Care Authority.

[ previous article ] [ return to top ]