[Archived] Question # 10: What is the cost if the retroactive application of the current promotional rule was applied to all eligible employees?

Question:

What is the cost if the retroactive application of the current promotional rule was applied to all eligible employees? (Vice Mayor Bennett-Parker, Councilman Seifeldein)

Response:

The cost to apply the current promotional rule to all eligible employees using the Years of Service Adjustment Model (YOSAM) is estimated to be at least $3.7 million.  The table below outlines the minimum cost by pay scale.  

The cost to apply the current promotional rule is most likely significantly higher due to the fact that it was not possible to account for each employee’s step at the time of hire as this information is not readily available for analysis and would be needed in order to provide a more accurate estimate. As such, YOSAM was applied assuming that all employees started at step 0 (zero) on their respective pay scales, which is not a practice that is applied universally in the City.  

In addition to challenges in creating a more accurate estimate for the cost to apply the promotion policy to all employees retroactively, this application of the promotion policy assumes that the steps on the City’s pay scales are reflective of each employee’s years of service in the City; this is not how the City’s promotion policy is defined.  The promotion policy states that employees are “placed on the pay grade associated with their new job classification on the step held prior to promotion unless the increase exceeds 20%”; this is not the same as being assigned to the step that correlates with an employee’s years of service.   

It is also important to note that in FY 2016, the HR Department shared a series of considerations when using the YOSAM model:  

1.Previous Pay Policies

The YOSAM was developed in response to the Public Safety Work Group’s concern over what they considered to be pay alignment issues resulting from the City’s previous pay practices. It is important to note that these pay practices were not exclusively applied to the Public Safety Work Group but they were also applied to employees on the General Scale. While the Public Safety Group feels that the City’s previous pay policies were erroneous, the City has never explicitly stated that it agrees with this position. However, the application of the YOSAM potentially would support this position. The City Manager does not support implementation of YOSAM.  

2.Retroactive Exposure

The YOSAM is designed as a retroactive pay adjustment over the last 30 years. As such, the City should seriously consider the inherent impact of applying retroactive pay adjustments such as:  

• a.Impact to any overtime pay
• b.Impact to retirement plan costs  

If YOSAM is applied, these matters should be reviewed from a legal point of view and there should be clarity in how these potential effects will be addressed.  

3.Years of Service vs. Years of Experience

As the name implies, the YOSAM takes into account an employee’s years of service. This could create an internal pay equity issue for employees who have several years of experience with the City but is new to their current job. For example, while an employee may have 15 years of service with the City, they could be in their current job for only 3 years. If that employee is at a Step 10, they would be moved to a Step 15. There could be a number of scenarios why this may not be appropriate such as they were recently promoted into a managerial position with very little management experience. Comparing this employee to an employee in the same or similar job who is at a step 15 and who has 15 years of direct management experience, this would create an internal pay inequity. 

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