ARIZONA STATE SENATE
Phoenix, Arizona
employee pay; overtime
(NOW: state employees; pay;
benefits)
Prohibits the
use of unbudgeted vacancy savings to promote or give a raise or bonus to any
person for leaving merit system coverage.
Eliminates the required one week waiting period for qualifying for
unemployment insurance benefits if a person is required to attend uncompensated
training required by a state approved apprenticeship program. Expands the authorization to join employee
organizations from political subdivision public safety personnel to all
political subdivision personnel. Requires
the Arizona Department of Administration (ADOA) to report to the joint legislative
study committee on state employee compensation (SEC study) committee on each
state agency relating to exempting employees from the state’s personnel
system. Establishes the equal pay
committee and the study committee on state employee qualifications for overtime
pay.
Background
In 1989, H.B. 2298 allowed public safety employees serving in any city, town, county or fire district to join employee associations and to give testimony to governing bodies. In addition, this bill prohibited termination, disciplinary action or discrimination of employees of cities, towns, counties and fire districts for exercising these rights. H.B. 2122 expands this authorization to include public employees of any political subdivision while maintaining prohibitions regarding termination, discipline or discrimination.
Under current law, all state employees in the ADOA system who are non-exempt under the Fair Labor Standards Act of 1938, excluding elected or appointed employees, qualify for overtime compensation. These employees, who comprise approximately 80 percent of the ADOA workforce, are eligible for overtime if they work in excess of their weekly work schedule. H.B. 2122 creates a legislative study committee to review and analyze overtime pay issues.
Current Arizona statute prohibits wage discrimination based on sex. Wage discrimination based on race, however, is not addressed in Arizona statute. According to the National Committee on Pay Equity, seven states have statutes addressing equal pay for both race and gender. Two federal laws protect workers against wage discrimination. The Equal Pay Act of 1963 prohibits unequal pay for equal or substantially equal work performed by men and women. Title VII of the Civil Rights Act of 1964 prohibits wage discrimination on the basis of race, color, sex, religion or national origin.
According to the National Conference of State Legislatures, several states utilize differing forms of equal pay commissions to study and report on the implementation of gender and/or race wage discrimination prohibition in the public and/or private sector. Furthermore, the Center for Policy Alternatives (CPA) has drafted model legislation aimed at reducing the wage gap based on race and gender. The model legislation also institutes an equal pay committee to address the problem of unequal pay. According to CPA, twelve states, including Arizona, are considering such model legislation. H.B. 2122 incorporates some of the tenets of the model legislation, including creation of an Equal Pay Committee, prohibition of wage discrimination based on race and the requirement that employers found liable of wage discrimination pay compensatory and punitive damages, in addition to a penalty to the Industrial Commission (Commission).
Under current law, individuals seeking unemployment benefits are required to meet different criteria, including having been unemployed for a waiting period of one week. In many situations, workers are required to receive uncompensated training as a condition to keep their employment. Many times, unions or other organizations are able to pay for the member’s or employee’s training but cannot afford to replace the weekly wages for that worker. Concern has been expressed that this situation creates economic hardships on these individuals and their families. H.B. 2122 removes the waiting week period for these individuals to enable them to receive a week of unemployment benefits for a week of uncompensated training, for a total of up to five weeks of unemployment benefits each benefit year. H.B. 2122 makes technical changes in the location of the new language inside the applicable statute. Also, language is included that clarifies that those receiving uncompensated training are not considered unavailable to work nor employed for the purpose of the statute.
Potential fiscal impacts of this legislation may stem from the reimbursement of expenses of the equal pay committee, potential effects of the expansion of the eligibility for unemployment benefits on the unemployment trust fund and employer tax rates and the administrative costs associated with compiling the ADOA report to the SEC study committee.
1. Eliminates the required one week waiting period for the purpose of qualifying for up to five weeks of unemployment insurance benefits (one week of benefits for each week of training) if a person is required to attend uncompensated training required by a state approved apprenticeship program.
2. Specifies that an individual is considered unemployed and available for work by participating in uncompensated training required to keep the person’s job.
Equal Pay Committee (S.B. 1266)
3. Establishes a nine-member equal pay committee to study specified factors for, and consequences of, wage disparities based on gender and race in both the public and private sectors and its impact on families and the economy. Prescribes the membership of the committee.
4. Requires the committee to submit an annual report of its findings and recommendations to the Governor and Legislature by December 10 of each year.
5. Qualifies members of the committee for reimbursements of expenses only.
6. Requires the Industrial Commission to provide staff and support services to the committee.
7. Requires the Governor to appoint members no later than ninety days after the general effective date.
8. Expands the right to join employee associations that comply with state law from public safety employees of cities, towns, counties and fire districts to public employees of all political subdivisions in general.
9. Expands the bodies to which public employees may testify without reprisal from cities, towns, counties and fire districts to all political subdivisions.
10. Prohibits state agency heads from authorizing the use of unbudgeted vacancy savings to grant any promotional or financial payment to forego merit system coverage to state agency employees subject to the state personnel system.
Study Committee on State Employee
Qualifications for Overtime Pay (H.B. 2122)
11. Establishes the study committee on state employee qualifications for overtime pay, consisting of four members of the Senate and three members of the House of Representatives. No more than two members from each chamber may be from the same political party.
12. Requires the committee to review and analyze:
a. Whether overtime pay should be based on time worked in excess of an employee’s daily work schedule or weekly work schedule;
b. Whether DOA has received notification of grievances regarding work schedules and overtime pay and how these grievances were resolved;
c. The policies of state agencies regarding overtime pay;
d. Fiscal analysis of any proposed change in the qualification for state employee overtime;
e. Other issues relevant to state employee overtime pay.
13. Requires the committee to submit a report of its findings and recommendations by November 15, 2001 to the Governor, Legislature, Secretary of State and Director of the Arizona State Library, Archives, and Public Records.
14. Repeals the study committee on state employee qualifications for overtime pay on January 1, 2002.
15. Increases the Senate membership on the committee from three to four.
16. Requires DOA to submit a report on each state agency relating to state employee compensation to the SEC study committee by December 15, 2001. The report is required to contain the following information:
a. the process the agency uses to exempt an employee.
b. the number of exempt employees employed by the agency, the date those employees were exempted and the reason each employee was exempted.
c. promotional or financial payment offered or given to the employee as motivation to give up merit system coverage.
d. verbal or written commitments offering continued due process protection to employees in exchange for exemption from merit system coverage.
e. the impact to the agency’s overtime budget due to exempting employees.
17. Requires the joint legislative study committee on state employee compensation, to:
a. review the report submitted by DOA.
b. hold public hearings intended to gather information. The hearing will also include an assessment by DOA on the impact that arbitrarily exempting employees will have on the overall state employee compensation system.
c. discuss, with a representative of the Wage and Hour Division of the U.S. Department of Labor, whether or not arbitrarily exempting state employees satisfies state and federal standards, specifically with respect to overtime pay.
18. Make recommendations, if any, for legislation.
19. Provides for a repeal date for the DOA report requirements of January 1, 2004.
20. Makes technical changes.
21. Provides for a general effective date.
Adopted the strike everything amendment.
Limits the exemption from the qualifying work week for unemployment benefits for individuals required to leave employment for mandatory training required by a state approved apprenticeship program.
GOV 4/10/01 DPA/SE 3-2-1 FII 2/7/01 DPA/SE 7-2-1-0-0
3rd Read 4/23/01 16-11-2-0 3rd Read 3/20/01 37-16-7-0
Prepared by Senate Staff
April 24, 2001