Kelsey Knorp
National Beat Reporter
At the start of the Regents’ morning session on July 22, UC President Janet Napolitano announced the pending implementation of her UC Fair Wage Fair Work Plan. Over the next three years, minimum wage will increase to $15 per hour for UC employees who work more than half time. The first phase of the plan will go into effect on Oct. 1, bumping the current minimum wage up to $13 per hour. In 2016, that figure will increase by another dollar, and by 2017, the $15 wage will take full effect.
Napolitano underscored the UC’s obligation to more liveable wages as the third biggest employer in the state of California. “Our community does not exist in a vacuum,” she said.
The new wage fittingly accompanies the rollout of a brand new payroll/personnel system to the tune of $375 million, $220 million of which will be funded by the Regents. The remaining cost for the new technology, known as UC Path, will be covered by redirected funds from the ten UC campuses. According to UC Chief Financial Officer Nathan Brostrom, the overhaul has proven necessary after at least 11 instances of error in the current systemwide payroll system, which is about 35 years old.
Regent Hadi Makarechian questioned whether the UC could approach less costly companies, such as Paychex or ADP, to run payroll operations. “Other companies couldn’t run a customized system that also includes functions like human resources,” Brostrom said.
Lt. Gov. Gavin Newsom expressed even deeper skepticism. He cited a Standish Group study that found 94 percent of such large-scale IT projects at the federal, state, and local levels to ultimately be failures, or “restarts,” that require additional funds. According to his calculations, seven such projects have already cost the state approximately $2 billion. “There’s no accountability here,” he said.
Napolitano made a point of affirming that the new minimum wage will apply to both direct and subcontracted employees, but discrepancies between the two groups have been a source of concern for unions in recent months. Union President of the American Federation of State, County, and Municipal Employees Local 3299 Kathryn Lybarger spoke at the July 22 session to update the board and the public on the progress of California Senate Bill 376. The bill would require that the UC pay subcontracted workers the same amount it would pay its own workers for the same work.
According to Lybarger, the bill “sailed” through the Senate to the Assembly floor, despite past reluctance on the part of the Regents to address the problem internally. She also informed the board that AFSCME 3299 stands against any pension changes for UC employees, a cause that drew several other speakers as well.
The UC agreed to a pension cap decrease from $265,000 to $117,000 for new employees as part of the same deal with Gov. Jerry Brown that enabled a two-year tuition freeze and allocated $436 million in state funds to help pay off the university’s $7.8 billion pension debt. Since the cap alone won’t cut it in the long term, the university must devise a new pension tier. As a result, unionized workers will have to renegotiate their contracts with the UC as they come up for renewal.
Union Vice President Jamie McDole, who represents 12,000 UC workers through the local chapter of University Professional and Technical Employees, recalled the last round of budget negotiations, when the UC decided against a multi-tier pension system. Ultimately, she reminded the Regents, members of UPTE-CWA 9119 had agreed to fund 1 percent more of their pensions to maintain the health of the current, more generous system. She echoed the claim of several other speakers: the existing pension system plays a crucial role in the longstanding employment of qualified workers.
“Our members put their money where their mouth is,” McDole said. “Offering a portable plan such as defined contribution will only encourage top quality employees to come learn [skills] at UC and then go away. And that’s not what the University is about.”
The next meeting of the UC Regents will be held at UC Irvine from Sept. 16-17.