The Department of Human Resources (CalHR) debuted July 1, 2013 as part of a general reorganization of state government proposed by Governor Jerry Brown. It consolidated functions of the Department of Personnel Administration with certain programs of the State Personnel Board and became part of the newly-created Government Operations Agency in July 2013. The department manages the state’s personnel functions and is the governor’s representative in collective bargaining with unions; sets salaries and benefits for employees excluded from collective bargaining and employees exempted from civil service; administers the employees’ Savings Plus Program; and provides legal representation to state agencies in labor relations.
Governor’s Reorganization Plan (pdf)
California Department of Personnel Administration (Wikipedia)
California public employees were given the right to bargain collectively in 1977 with passage of what would become known as the Ralph C. Dills Act. The legislation redefined the employer/employee relationship by requiring personnel rules and policies to be bilaterally developed. Until then, the State Personnel Board, created in 1934, was the sole agency involved in personnel matters but it was decided that a separate agency was required to handle collective bargaining.
In 1979, Governor Jerry Brown asked the Little Hoover Commission to conduct a comprehensive review of the state’s personnel system. It recommended that a cabinet-level department be created to oversee all personnel management functions and that the State Personnel Board be replaced with a State Employment Equity Board to serve as a neutral third-party in the administration of employer-employee organization relationships. The commission also provided specific recommendations for streamlining the state’s personnel management system.
The Legislature created the Department of Personnel Administration in 1981, but left the State Personnel Board intact with functions that often overlap the DPA. And the legislators ignored the recommendations for streamlining. During the mid-‘80s, California de-centralized testing and hiring of employees to individual agencies, but significantly reduced the State Personnel Board’s budget, impairing its ability to help direct the de-centralization process. The result was significant deficiencies in employee testing and hiring.
In 1995, the Little Hoover Commission produced another report entitled “Too Many Agencies, Too Many Rules: Reforming California’s Civil Service. Among a host of suggestions that were soon to be ignored by the Legislature, it recommended that the State Personnel Board be abolished. Around the same time, the Office of Legislative Analyst issued a report that said the state’s civil service system was a mess and needed a fundamental rethinking. Many of the recommendations from both the Legislative Analyst and the commission would have reduced the power of organized labor and increased that of management.
The Department of Personnel Administration was renamed the Department of Human Resources (CalHR) in 2012 when the Legislature took over several functions of the State Personnel Board and came under the umbrella of the newly-created Government Operations Agency on July 1, 2013.
Prospects for Civil Service Reform in California (Katherine C. Naff, San Francisco State University)
CalHR represents the governor in collective bargaining with unions, sets salaries and benefits for employees not included in collective bargaining (and those excluded from civil service), manages all aspects of state employment previously handled by the State Personnel Board, is the sole administrator of the state Savings Plus pension program and provides legal representation to state agencies for appeals of disciplinary actions and labor relations matters.
CalHR has eight basic responsibilities:
Benefits—The Benefits Division partners with the California Public Employees’ Retirement System (CALPERS) to administer the state employee benefit package. Benefits include dental and vision insurance, life insurance, legal services, and other insurance programs; flexible spending accounts; employee assistance; workers compensation; disability and return-to-work programs; safety/wellness; award programs; and pre-tax parking reimbursement.
Civil rights—The Office of Civil Rights ensures that state workers observe the civil rights of citizens and state employees.
Labor relations—CalHR represents the governor and the state management position in negotiations with the exclusive representatives of the collective bargaining units. The state's rank-and-file employees are divided into 21 bargaining units. Each bargaining unit is represented by a union; in some cases the same union represents multiple units. Contract issues include wages, hours and working conditions. Once the department and a union agree on a new contract, the Legislature must vote on its economic provisions and any law changes it requires for implementation. Once it receives legislative approval, the agreement goes to the governor for signature. The union also submits the agreement to its members in the bargaining unit for ratification.
Personnel management—CalHR administers the state’s classification plan, salaries and supervisorial programs.
Selection—The department creates and administers civil service examinations to job candidates.
Legal—The Legal Division represents the governor, the DPA and other state agencies in all labor relations matters and most employment and personnel matters, including state and federal litigation, arbitration, OSHA citations, workmen’s compensation claims and unfair labor claims.
Savings Plus—The Savings Plus program offers a 401(k) Plan and a 457 Plan to eligible State of California employees. The department is the sole fiduciary and administrative body for the program.
Training
Workforce planning—The department manages the state’s strategy for recruiting civil service employees.
Overview of the California State Personnel Management System (pdf)
Only a small portion of the Department of Human Resources comes from the state. In 2013-14, all but $7.9 million of its total $94.5 million budget came from the General Fund. $100,000 came from Special Funds and the rest from non-state sources.
Minimum Wage
In July 2010, Governor Arnold Schwarzenegger responded to a budget stalemate by ordering 200,000 state workers be paid the federal minimum wage of $7.25 per hour. Department of Personnel Director Debbie Endsley sent the order to State Controller John Chiang who refused to comply with it. The order excluded approximately 37,000 state workers who had already reached tentative labor agreements. Chiang said the state had enough money to pay its bills and called the governor’s pay-cut order a ploy. But the legal basis of his refusal was a computer system issue that prevented him from complying with the order. Endsley wasn’t buying the explanation. She said Chiang’s predecessor, Steve Westly, had addressed the computer problem in 2003 and had found the “technical tasks involving changing pay for more than 200,000 employees can be accomplished.” A similar refusal by Chiang in 2008 was still being adjudicated by the courts. But in the meantime, Endsley told him “to take the necessary steps to make changes to your computer system to comply with state law.” Endsley and Chiang exchanged lawsuits.
The standoff continued until Governor Schwarzenegger left office. Governor Brown dropped the lawsuit in February 2010 while announcing a comprehensive hiring freeze. Chiang responded: “I am pleased and thankful that Governor Brown saw this litigation as a frivolous waste of hard-earned tax dollars that should be dedicated to fixing our schools, protecting our communities and rebuilding our infrastructure.”
Letter to the Controller (from Debbie Endsley, director of Department of Personnel Administration)
Schwarzenegger Puts 200,000 Workers on $7.25 Per Hour (MSNBC)
Schwarzenegger Minimum-Wage Plan Is Legal, Judge Says (by Michael B. Marois and Christopher Palmeri, Bloomberg BusinessWeek)
Calif Governor Freezes Hiring, Drops Minimum Wage Suit (Associated Press)
Furloughs
Due to budget woes in California, Governor Schwarzenegger issued an executive order in December 2008 directing the DPA to impose a furlough on state employees for two days each month. The DPA developed a furlough plan that implements the closing of state government operations on the first, second and third Friday of each month and executed it early the next year.
A number of lawsuits challenging the executive order followed but the furloughs continued. Two years and an estimated $1.6 million later, the issue neared resolution, although five state worker labor unions in 2011 asked a judge to order Governor Brown to stop what they said were illegal three-day-per-month furloughs. Unlike the barbed exchanges between labor and the administration that marked Governor Schwarzenegger’s tenure, both sides were cordial and expressed a desire to settle the matter amicably. The major stumbling block was more than $2 billion in back pay the union said was their due, money the state dearly did not want to give up in the middle of a budget crunch.
Union lawsuits still floating around in 2011 focused on how the policy was applied. One lawsuit contended that it was illegal to cut prison officers' pay but then delay their commensurate time off because of staffing shortages. In May 2011, San Francisco's 1st District Court of Appeal upheld a lower court ruling that former Governor Arnold Schwarzenegger illegally furloughed State Compensation Insurance Fund employees.
State Employee Furlough per Governor's Executive Order S-16-08 (DPA website)
California Union Workers Sue to Halt Furloughs (by Jon Ortiz, Sacramento Bee)
Appeals Court Affirms State Fund Furlough Decision (by Jon Ortiz, Sacramento Bee)
California Court Finds Certain State Employees Exempt from Work Furloughs (Epstein Becker Green law firm)
Are Unions and Jerry Brown in Final Throes of Furlough Fight? (by Jon Ortiz, Sacramento Bee)
Pension Reform
As a candidate in 2010, Governor Jerry Brown said pension benefits should be rolled back to help rein in state retirement system costs. He advocated raising the retirement age for new employees from 55 to 60 and said current employees should pay more into the system. Brown said he would end “pension-spiking,” whereby public employee retirement benefits are increased by promotions, overtime, bonuses and unused vacation time in a person's final year. He wanted to calculate benefits using a worker's average base salary during the last three years of service. Change could come through legislation at the ballot box or in the Legislature, or across the negotiating table. The Department of Personnel Administration negotiates contracts with the unions and the Legislature ratifies the agreements. Unlike his predecessor, Governor Schwarzenegger, Brown refused to demonize workers and said they shouldn’t be blamed for economic problems caused by Wall Street and mortgage sellers. “But at the same time, as I did as governor, I know when it's time to tighten our belt,” he said.
Should the belt be tightened on the six pension plans administered by the state through negotiations and, if so, how much?
Pension Critics
Many supporters of pension reform think public sector unions are too greedy and politically powerful, and have put the state in financial jeopardy. But even those who don’t vilify unions think the state simply can’t afford the retirement benefits and often point to the $26.6 billion deficit the state grappled with as Governor Brown took office in 2011. Seven in 10 people said they supported a cap on pensions for current and future public employers, in a Los Angeles Times/USC Dornsife College poll in April 2011.
A study in February 2011 by the nominally nonpartisan Little Hoover Commission called California pension plans at the state and local level “dangerously under funded” and recommended “aggressive” reforms. While noting the stock and housing market collapses, it also fingered “risky political behaviors” for the growing pension fund vulnerabilities. It said pension costs “would crush” California. It suggested major belt-tightening measures and hinted that the Legislature should take a cold, hard look at significant changes to collective bargaining laws by taking pensions entirely off the bargaining table and substituting some form of arbitration.
A financial analysis by the California Foundation for Fiscal Responsibility in May 2011 called it a fairness question between public and private sector unions. "Public employees are getting far more benefits than those in the private sector," said Marcia Fritz, the foundation's president and longtime advocate of pension downsizing. The foundation favorably cited proposals that would reduce payouts by about 40% for workers currently on the state payroll and by 25% for people hired after 2011.
Pension Defenders
Many people who resist major changes to the pension system say the battle is really over a larger issue. “Pension reform is a Trojan horse for an attack on public employees," argues Steven Maviglio, a spokesman for Californians for Health Care and Retirement Security. “The agenda is to de-fund and demoralize public employees and also weaken the union political cause. We've seen that in Ohio, Indiana and Wisconsin.” Some see an even larger Trojan Horse trailing behind that one and claim the attack on unions is a partisan assault by Republicans on one of the largest financial backers of the Democratic Party.
In recent years, arguments for solving the long-term imbalances of the pension funds are often incorrectly conflated with the immediate problem of the state’s large budget deficit. George Skelton at the Los Angeles Times, a supporter of pension reform, crunched the numbers and minced no words in his assessment of the pension debate: “Let's be clear: State employee pensions are not to blame for Sacramento's budget deficit. Not by any math. … Hypothetically, even if the governor and Legislature eliminated all payments to the state and teacher pension funds, they still would face a budget deficit of nearly $12 billion. And, of course, that's not a realistic scenario. They're not going to completely stiff public employees and provide them with no retirement benefits at all.”
Arguments against moving too quickly or acting too harshly cite improvements in pension viability from relatively short-term up ticks in the stock market and the effects of recent reforms already agreed to by unions. The Department of Personnel Administration negotiated contract agreements with the state’s six unions in early 2011 that included increased pension contributions by their members that, along with built-in furlough days, will reduce paychecks by 8% to 10% if ratified by union membership and approved by the Legislature.
Brown Details Plan for California State Worker Pension Reforms (by Michael J. Mishak, Los Angeles Times)
Public Pension for Retirement Security (Little Hoover Commission)
Public Beats Private for Pay and Benefits, Pension Reform Advocates' Study Says (by Jon Ortiz, Sacramento Bee)
Proposals Would Cut Benefits for California Employees 25% to 40% (by Marc Lifsher, Los Angeles Times)
Cutting Public Pensions Now Won’t Save California (by George Skelton, Los Angeles Times)
Comments by State Treasurer Bill Lockyer (State Treasurer’s website) (pdf)
Former Directors of the Department of Personnel Administration (Precursor to the Department of Human Resources)
Julie Chapman, 2012-2014
Ronald Yank, 2011-2012
Debbie Endsley, 2009 – 2010
David Gilb, 2006 – 2009
Michael Navarro, 2003 – 2006
Marty Morgenstern, 1999 – 2003
David Tirapelle, 1988 – 1998
Jim Mosman, 1985 – 1988
Michael Frost, 1983 – 1984
Allen Goldstein, 1982 – 1983
Marty Morgenstern, 1981 – 1982
- Table of Contents
- Overview
- History
- What it Does
- Where Does the Money Go
- Controversies
- Suggested Reforms
- Comments
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