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HomeMy WebLinkAbout1999-09-14; City Council; 15390; Clarification Of Vacation Accrual PracticeCl- OF CARLSBAD - AGEN-4 BILL w a t FOR MANAGEMENT AND GENERAL EMPLOYEES RECOMMENDED ACTION: Adopt Resolution No. 99 -3%” compensating affected management and CCEA represented employees for vacation hours in excess of the accrual maximums and limiting the City’s fiscal liability to existing accrual maximums for affected management and CCEA represented employees. Additionally, establishing an annual voluntary conversion of accrued vacation hours for affected management employees. ITEM EXPLANATION: Maximum vacation balances have been established with the various employee groups and are outlined in the City’s Personnel Rules, the Memoranda of Understanding with the City’s different bargaining groups, and the Management Compensation and Benefits Plan. These maximum vacation balances are intended to put a cap on the total number of vacation hours that an employee can earn and accrue. Theoretically, once the maximum is reached, the employee does not earn or accrue any additional vacation hours until his/her vacation balance falls below the maximum. As a result of the conversion to a new payroll system in January 1998, City staff became aware of a concern involving the accrual of vacation hours for all full-time and three-quarter (3/4) time employees. The intent is to cap an employee’s vacation hours at a predetermined maximum, and these vacation accrual maximums are not currently enforced for City employees. It is only when an employee leaves City service that the vacation accrual maximum is enforced, as terminating employees are compensated only for hours up to the maximum. When City staff became aware of this practice in January 1998, it was determined that vacation hours would be displayed in two separate areas on the employee’s paycheck. Any hours below the vacation accrual maximum would be reflected as “Vacation” and any hours over the maximum would be listed as “Vacation Over Max.” The City’s long-standing practice is to pay employees for vacation hours up to the maximum when they leave the City; hours listed under the column of “Vacation Over Max” are currently “forfeited” upon an employee’s separation from City service. Although the City historically has not compensated employees when they terminate their employment for any vacation hours accrued over the maximum vacation accrual, recent court decisions suggest that the City is obligated to compensate employees for any accrued vacation hours that appear on the employee’s paycheck, regardless of how those hours are listed on an employee’s paycheck. Exhibit 2 illustrates that, as of August 22, 1999, there are twenty-nine (29) management employees and thirty-three (33) employees represented by the Carlsbad City Employees’ Association (CCEA) whose paychecks reflect “Vacation Over Max” hours. There are also employees represented by the Carlsbad Police Officers’ Association (CPOA), the Carlsbad Police Management Association (CPMA) and the Carlsbad Firefighters’ Association (CFA) whose paychecks reflect “Vacation Over Max” hours. The City is currently meeting and PAGE2OFAB# 15,;,340 conferring with these employee groups in order to address the over maximum vacation accrual practice. Should a mutually agreeable solution be reached with any or all of these employee associations, a separate recommendation will be presented to the City Council at a later date. The attached Resolution only provides an approach for management and CCEA represented employees at this time. Any reference to management employees does not include management employees represented by the Carlsbad Police Management Association (CPMA). Because the City may be obligated to compensate employees for all accrued vacation hours, it is staffs recommendation that the %ity Council autborize the following: 1. Effective October 3 1, 1999, compensate affected management and CCEA represented employees for any accrued vacation hours over the existing vacation accrual maximums. 2. Effective November 1, 1999, apply the existing cap on the ability of management and CCEA represented employees to earn and accrue vacation that is above the vacation accrual maximum. Any affected employee whose vacation balance exceeds the maximum as of this date will not be allowed to earn or accrue any additional vacation hours until his/her vacation balance falls below the maximum vacation accrual. 3. There are several management and CCEA represented employees who accepted the “One to Four Years Additional Service Credit” retirement option that was offered by the City and the Public Employees’ Retirement System (PERS). Because these employees were obligated to retire prior to June 30, 1999, we are requesting that the City Council ratify this decision retroactive to June 1, 1999. This will enable the City to compensate these retiring employees for all accrued vacation hours. 4. It is staffs recommendation that the City Council authorize a change to the Management Compensation Plan to allow management employees, only, to voluntarily convert up to 80 hours of accrued vacation each December to cash, provided that the employee has actually used 80 hours of vacation during that calendar year. It is proposed that this option would be available to management employees in December 1999. 5. The City Council authorizes the City Manager to execute side letter agreements with the Carlsbad City Employees’ Association (CCEA) to implement these provisions. FISCAL IMPACT: The cost associated with paying the affected employees for vacation hours accrued over the maximum is approximately $351,000. The majority of this amount was expensed in the 1998/1999 fiscal year in anticipation of resolving this issue. There is no fiscal impact associated with implementing the vacation conversion option for management employees. The City will pay employees for accrued vacation whether it is taken as paid vacation or converted to cash under this provision. PAGE3OFAB# 15; 390 EXHIBITS: 1. Resolution No. cjq -3@ (including the vacation provision of the Revised Management Compensation and Benefits Plan) 2. Vacation Over Maximum Summary 3. Underlined/Strikeout Copy of the vacation provision of the Management Compensation and Benefits Plan 3 I RESOLUTION NO. 99-320 CLARIFICATION OF VACATION ACCRUAL PRACTICE FOR MANAGEMENT AND GENERAL EMPLOYEES. WHEREAS, the City’s current practice does not clearly represent the intention of the language in Section 3 of the Management Compensation and Benefits Plan (attached as Exhibit 1) which states that “all management employees shall be permitted to accumulate up to and including forty (40) days of vacation.. .Former CMWD management employees shall earn vacation as contained in their Individual Agreement. This includes the carryover of unused vacation;” and WHEREAS, the Carlsbad City Employees’ Association and representatives of the City of Carlsbad met and conferred and reached agreement on a Memorandum of Understanding (MOU) for the period from January 1, 1999 through December 3 1,1999; and WHEREAS, the City’s current practice does not clearly represent the intention of each party as agreed upon in Article 22.B Vacation Accrual of the CCEA MOU which states that “All employees shall be entitled to accrue vacation up to a maximum of 240 hours;” and WHEREAS, the City’s current practice does not clearly represent the intention of each party as agreed upon in Attachment B, Section I of the CCEA MOU which states that former CMWD employees will accrue vacation hours based on their years of service, and that “Effective January 1 of each year, vacation time in excess of the above- mentioned hours will be eliminated;” and WHEREAS, it has been and remains the intention of the City Council that management employees covered by the Management Compensation and Benefits Plan and employees represented by the Carlsbad City Employees’ Association (CCEA) stop 1 earning and accruing vacation hours once the existing vacation accrual maximum is 2 II reached by an employee. I 3 NOW, THEREFORE BE IT RESOLVED by the City Council of the City of 4 Carlsbad as follows: 5 1. 6 That the City agrees to compensate management and CCEA represented 7 employees for any accrued vacation hours that are over the existing vacation accrual a maximum, effective October 3 1, 1999. Compensation will be calculated at an 9 employee’s current rate of pay. 10 2. That beginning November 1, 1999, the City will apply the existing cap on the 11 ability of management and CCEA represented employees to earn and accrue vacation that 12 13 is above the stated vacation accrual maximum. Any affected employee whose vacation 14 /I balance reaches the vacation accrual maximum will not earn or accrue any additional 15 hours until his/her balance falls below the maximum. 16 3. That the aforementioned decision to compensate affected employees for 17 vacation hours that are over the existing vacation accrual maximum is ratified retroactive 18 to June 1,1999. 19 20 21 22 23 4. That the City Council hereby amends Section 3, Management Leave, of the Management Compensation and Benefits Plan to implement these provisions and to allow management employees to voluntarily convert up to 80 hours of accrued vacation each December to cash, provided that an employee has used 80 hours of vacation during 24 that calendar year. 25 5. That this Resolution only provides an approach for management and CCEA 26 27 28 represented employees at this time; any reference to management employees does not - 1 2 2 4 c w 6 7 a 9 10 11 12 13 14 15 16 17 ia 19 20 21 22 23 24 25 26 27 28 include management employees represented by the Carlsbad Police Management Association (CPMA). 6. That the City Manager is hereby authorized to execute side letter agreements with the Carlsbad City Employees’ Association (CCEA) to implement these provisions. PASSED, APPROVED AND ADOPTED at a regular meeting of the Carlsbad City Council, held on this 14th day of September, 1999, by the following vote, to wit: AYES: Council Members Lewis, Nygaard, Finnila, Hall & Kulchin NOES: None ABSENT: None ATTEST: (SEAL) EXHIBIT 1 l Vacation All management employees shall earn vacation on the following basis: Beginning with the first (1st) working day through the completion of five (5) full calendar years of continuous service - 80 hours/year (3.08 hours biweekly). Beginning the sixth (6th) year of employment through the completion of ten (10) full calendar years of continuous service - 120 hours/year (4.62 hours biweekly). Beginning the eleventh (11 th) year of employment through the completion of eleven (11) full calendar years of continuous service - 128 hours/year (4.92 hours biweekly). Beginning the twelfth (12th) year of employment through the completion of twelve (12) full calendar years of continuous service - 136 hours/year (5.23 hours biweekly). Beginning the thirteenth (13th) year of employment through the completion of thirteen (13) full calendar years of continuous service - 144 hours/year (5.54 hours biweekly). Beginning the fourteenth (14th) year of employment through the completion of fifteen (15) full calendar years of continuous service - 152 hours/year (5.84 hours biweekly). Beginning the sixteenth (16th) year of continuous employment, vacation time shall be accrued, and remain at a rate of 160 hours for every full calendar year of continuous employment thereafter (6.15 hours biweekly). Management employees with comparable service in local government agencies may be granted credit for such service for the purpose of computing vacation at the discretion of the City Manager. All management employees shall be permitted to earn and accrue up to and including three hundred and twenty (320) hours of vacation, and no employee will be allowed to earn and accrue vacation hours in excess of the three hundred and twenty (320) hour maximum.* The City Manager shall be responsible for the granting of vacation to all management personnel, except in the case of the City Attorney’s Oflice, where the City Attorney shall be responsible for granting vacation. Former CMWD management employees shall earn and accrue vacation up to and including the maximum as contained in their IndividuaZ Agreement. * If there are unusual circumstances that would require an employee to exceed the vacation accrual maximum, he/she must submit a request in writing to the Department Head and the City Manager. The Department Head and the City Manager may grant such a request if it is in the best interest of the City. Requests will be handled on a case-by-case basis and will be considered only in extreme circumstances. a Vacation Conversion Each December, management employees (with the exception of Police Lieutenants and Police Captains) will be allowed to voluntarily convert up to 80 hours of accrued vacation to cash, provided that they have used 80 hours of vacation during the calendar year. b A EXHIBIT 3 0 Vacation All management employees shall earn vacation on the following basis: Beginning with the first (1st) working day through the completion of five (5) full calendar years of continuous service - 80 hours/year (3.08 hours biweekly). Beginning the sixth (6th) year of employment through the completion of ten (10) full calendar years of continuous service - 120 hours/year (4.62 hours biweekly). Beginning the eleventh (11 th) year of employment through the completion of eleven (11) full calendar years of continuous service - 128 hours/year (4.92 hours biweekly). Beginning the twelfth (12th) year of employment through the completion of twelve (12) full calendar years of continuous service - 136 hours/year (5.23 hours biweekly). Beginning the thirteenth (13th) year of employment through the completion of thirteen (13) full calendar years of continuous service - 144 hours/year (5.54 hours biweekly). Beginning the fourteenth (14th) year of employment through the completion of fifteen (15) full calendar years of continuous service - 152 hours/year (5.84 hours biweekly). Beginning the sixteenth (16th) year of continuous employment, vacation time shall be accrued, and remain at a rate of 160 hours for every full calendar year of continuous employment thereafter (6.15 hours biweekly). Management employees with comparable service in local government agencies may be granted credit for such service for the purpose of computing vacation at the discretion of the City Manager. All management employees shall be permitted to earn and accrue ~~MHwA& up to and including three hundred and twenty (320) hours s%+@+&s of vacation, and no employee will be allowed to earn and accrue vacation hours in excess of the three hundred and twenty (320) hour maximum. * The City Manager shall be responsible for the granting of vacation to all management personnel, except in the case of the City Attorney’s Office, where the City Attorney shall be responsible for granting vacation. Former CMWD management employees shall earn and accrue vacation up to and including the maximum as contained in their Individual Agreement. This 4 * If there are unusual circumstances that would require an employee to exceed the vacation accrual maximum, he/she must submit a request in writing to the Department Head and the City Manager. The Department Head and the City Manager may grant such a request if it is in the best interest of the City. Requests will be handled on a case- by-case basis and will be considered only in extreme circumstances. l Vacation Conversion Each December, management employees (with the exception of Police Lieutenants and Police Captains) will be allowed to voluntarily convert up to 80 hours of accrued vacation to cash, provided that they have used 80 hours of vacation during the calendar year.