Assigned to GOV                                                                                                                                 FOR COMMITTEE

 

 

 

ARIZONA STATE SENATE

Phoenix, Arizona

 

FACT SHEET FOR H.B. 2603

 

performance based personnel system

 

Purpose

 

Establishes a performance based personnel system.

 

Background

 

Generally speaking, exempt state employees are employees and officers that are hired and retained at Athe will of@ the appointing person, such as agency directors and limited staff.  Nonexempt employees are those persons currently employed under the DOA personnel system.  Nonexempt employees may be separated from state service for cause as prescribed in statute. “Exempt” is the category utilized by H.B. 2603 to consist of persons hired within an agency who are not covered by the state personnel system.  Exempt employees generally retain protections granted by state and federal labor laws, including the Fair Labor Standards Act (FLSA), Occupational Safety and Health Act (OSHA), whistle-blower protections, and state laws against nepotism and the purchase of office.  Exempt employees, however, are retained on the basis of the adequacy of their performance.

 

This legislation allows agencies to utilize unbudgeted vacancy savings to grant pay raises to personnel exempt from the state personnel system, uncovers program managers, managers and any persons in charge of work units vested with a certain amount of discretion and independent judgement from the state personnel system, and alters the types of appeals that may be heard by the state personnel board.   Because the specific fiscal impacts of these changes are unknown, the total fiscal impact of this legislation is indeterminable.

 

Provisions

 

Performance Based Personnel System

 

1.      Establishes a performance based personnel system and prescribes the duties of state agencies and the Director of DOA.

 

2.      Requires the Director of DOA to annually evaluate and submit a report before October 1 on the implementation and operation of the performance based personnel system to the Governor and the Legislature.

 

State Personnel System Exemptions

 

3.      Prohibits the continued designation of a position as nonexempt from the state personnel system if the Director of DOA determines that a position is an exempt position.

 

4.      Removes requirement that state personnel rules allow for leaves of absence from a position in state service to an exempt position.

 

5.      Requires the Director of DOA to review and approve or disapprove the designation of positions as exempt or nonexempt.

 

6.      Exempts the following from the state personnel system:

 

  1. persons in charge of and  in control of a branch establishment, division or section of an agency, board or commission.
  2. any person in charge of a work unit who are vested with a certain amount of discretion and independent judgment, specifically including assistant directors, program managers and managers.
  3. persons in an attorney position at the Department of Law.
  4. positions that are determined to be exempt and that are not classified as an exempt position after October 1, 2001 or at the time the position is next vacant, whichever occurs later.

 

7.      Requires agency heads to annually submit the following before December 1 of each year to the Director of DOA:

 

  1. a list of all positions exempt from the state personnel system.
  2. an organizational chart that shows each exempt position relative to other positions in the agency.

 

8.      Specifies that executive staff, executive secretarial and administrative assistant positions required to maintain a direct confidential working relationship with exempt officials are exempt from the state personnel system.

 

9.      Limits exemption from the state personnel system those persons who provide legal counsel other than directly to the top level positions of a department or agency.

 

Pay Raises

 

10.  Allows state agency heads to use unbudgeted vacancy savings to give pay raises to exempt employees if the agency head certifies that the action does not and will not result in the need for an increased appropriation and to give salary increases to retain all state personnel if the agency head certifies that the action will not result in the need for an increased appropriation.

 

11.  Requires vacancy savings pay raises to be based on merit and may be made annually up to the lesser of a 10 percent increase or the competitive market amount as determined by ADOA.

 

12.  Requires vacancy savings salary increases to be used to retain personnel receiving bona fide job offers from non-state employers and allows increases in salary to meet the salary of the job offer if it is within the position’s pay range.

 

Appeals to the State Personnel Board

 

13.  Removes authorization for state employees to appeal suspension for more than 40 working hours to the state personnel board.

 

14.  Limits each party’s presentation and cross-examination of witnesses and giving of evidence to the state personnel board to eight hours, unless a party petitions for additional time and presents evidence supporting the petition.

 

15.  Eliminates ability of the state personnel board to reduce penalties chosen by an agency that are excessive.

 

16.  Provides a purpose statement.

 

17.  Provides for a general effective date.

 

House Action

 

RGO                2/27/01            DP       6-4-0-0-0

3rd Read           3/20/01                        33-21-6-0

 

 

Prepared by Senate Staff

April 5, 2001