Clark County, its biggest union debate need for longevity pay

Clark County and its largest union have a disagreement that is rooted in how future employees should be compensated after they have put in eight years.

At the heart of the matter is longevity pay, a payment system for county employees that kicks in after they reach eight years of service. The Service Employees International Union Local 1107 is the last bargaining unit to still have longevity pay for future county employees in its contract. As the county’s biggest union, it represents about 4,970 employees and another 3,300 employees at University Medical Center.

In the past few years, the county and other unions have phased out longevity pay for future employees. Longevity pay has remained intact for all employees who started their employment before the benefit ended for future workers. In the employee groups in which longevity for future workers has ended, staffers already on the job at the time of the change remain eligible, even if they haven’t yet hit the eight-year mark. Those hired before changes are eligible to continue receiving longevity until retiring. And their longevity pay factors into their pension plans.

Last year, the county paid some $34.5 million out in longevity pay to eligible employees, ranging from the ranks of upper management to firefighters, maintenance workers and staff at UMC. That figure includes all employee groups, not just SEIU-affiliated workers.

The county has pushed in its contract negotiations with the SEIU to eliminate longevity pay for future employees. That proposal would preserve longevity pay for those already receiving it and allow employees already on the job to still receive longevity after reaching the eight-year mark. That offer has included a 2 percent cost-of-living increase. Negotiations haven’t ended, and it remains uncertain what will come of longevity pay for future, new hires.

On one side of the debate is the argument that longevity is a good tool to reward employees who stay with the county for the long term and avoid costs such as recruitment, retraining and overtime to cover for vacancies.

On the other side is an argument that longevity pay has become an archaic way to reward employees that is no longer effective or necessary.

HOW LONGEVITY PAY WORKS

Here’s how longevity pay works: After an employee has worked for the county for eight years, he receives an annual check for 0.57 percent of the base pay for each year of service. The amount increases with the number of years of service and with other increases to the base salary.

An employee who earns $50,000 a year and has eight years of service would receive $2,280 for the first longevity check. Longevity payments come as one annual lump sum check after an employee’s anniversary date.

According to county salary data:

■ Out of 10,610 employees on the county’s payroll in 2013, 4,090, or 38.5 percent, received longevity. Those figures, which don’t include UMC staff, encompass all groups that received longevity, not just SEIU-affiliated workers.

■ Out of those 4,090 employees that received longevity pay in 2013, the average payment was $6,202, according to an analysis of the data.

■ Longevity pay grows with time of service and as base pay increases, growing beyond $10,000, particularly for employees who get promotions into management positions. Out of that list, 623 county employees received longevity payments of $10,000 or more. The highest paid longevity earners include a mix of staffers including management, fire captains, public works staff, attorneys and analysts.

■ SEIU-affiliated staff earned $13.3 million total in longevity pay in 2013. That is down from $14.2 million in 2009. Total longevity pay for management staffers has dropped from $1.5 million in 2009 to $1.15 million in 2013. The management group has 177 staffers.

Martin Bassick, president of the SEIU Local 1107, said preserving the benefit for employees is a good tool to boost retention and contended it can save money in the long run on things such as recruiting and training costs and overtime when staff fill in for vacancies.

“It’s important for us to be competitive,” Bassick said. “Longevity is an incentive to have just that.”

Bassick also said that eliminating longevity pay for new future hires would particularly be harmful for areas such as University Medical Center, where medical professionals can jump to more lucrative jobs at private hospitals. He also said that eliminating longevity pay for new hires is problematic.

“It’s not good for the workforce because now what you get is a two-tiered system,” he said. “Some of them have it, and some of them don’t.”

Bassick said that longevity payments to employees are relatively small, especially as the longevity payment initially starts. He also noted that eliminating the benefit for future hires wouldn’t generate any savings for eight years.

Bassick also noted that longevity pay extends into the ranks of management as staff from supervisory bargaining units get promoted.

“For whoever’s speaking out about longevity, when they say our management team doesn’t have that, that’s not true,” Bassick said.

LONG-TERM SAVINGS

In an interview, County Manager Don Burnette said efforts to eliminate longevity pay for future employees have never been about immediate short-term savings. Instead, it’s about long-term savings and positioning the county’s financial footing in the decades ahead, he said.

Eliminating longevity pay for SEIU-affiliated employees would save an estimated $358 million in the course of 30 years, according to county projections.

“I know we don’t realize the savings for eight years, but those costs are things we’ll have to incur in the future,” Burnette said.

The county’s long-term budget needs include the Clark County Detention Center, UMC and the Metropolitan Police Department. In addition, the county has lost 20 percent of its workforce in the recession, and the savings would allow the county to add employees in the long term, Burnette said.

In 2002, new management staffers were no longer eligible for longevity. However, an employee who is promoted to management is eligible to continue receiving it.

Without that provision, longtime employees would face a salary cut if they gave up longevity for a promotion. That’s because the typical raises to the base salary would be smaller than the longevity payment.

In the management group, 61 people were hired after longevity ended, which the county estimates saves about $460,000 annually.

Burnette said longevity pay’s end for future employees hasn’t hurt recruiting efforts for groups that have given it up. About 2,500 put in for firefighter jobs. Posted advertisements for juvenile probation officers drew 647 applicants.

“We’ve had no trouble whatsoever recruiting high-caliber, extremely talented employees,” he said.

County Commission Chairman Steve Sisolak said the county has been actively pursuing bargaining longevity pay out of contracts.

“That’s because of the enormous costs of it,” he said. “It’s simply not sustainable as we move forward.”

Noting that other employee groups have given up the benefit for future hires, Sisolak said: “You want to be fair to everybody.”

CULTURAL CHANGE

In 2002, the county’s management compensation plan ended longevity for new hires, as did the Clark County Prosecutors Association. The county’s bargaining unit for district attorney investigators followed in 2005.

Between 2008 and 2013 other employee groups gave up longevity pay for new hires, including park police, juvenile justice supervisors, managers and probation officers, and firefighters. In August, the county ended longevity pay for nonunion employees when restoring a 2 percent pay cut.

Former County Manager Thom Reilly led the county’s initial push in 2002 to eliminate longevity pay for new management hires. Management staff already receiving longevity continue to receive the benefit.

Reilly said the arguments for longevity pay, which started growing to prominence in the United States in the 1940s, are no longer well-placed.

“It’s pretty archaic,” he said. “It’s not a good tool for recruitment or retention.”

The change was cultural too. Reilly said that in the past, employee recognition luncheons would note only the years of service, with nothing in the way of accomplishments.

When longevity pay first become common in the nation, there was a wider disparity between public- and private- sector wages, he said. Since then, public-sector jobs have become more competitive in salaries, he said, even without longevity pay. In addition, Reilly said, it’s better to have a system that rewards employees for innovation and performance, not simply how many years they have worked in one place.

Also, work habits of younger employees have shifted, and professional employees are much more mobile, moving around to different opportunities, he said.

National statistics show longevity pay is relatively rare. Nationally, 5 percent of local government employees receive longevity pay, according to a Bureau of Labor Statistics 2013 report.

“It’s not widely used,” Reilly said. “It’s disappearing everywhere for good reason.”

Longevity pay elsewhere in area local government agencies varies.

New officers with the Metropolitan Police Department are no longer eligible. Neither are staffers at the city of Las Vegas. The city ended it for new executive and appointed employees in 2001. Between 2011 and 2013, the city’s bargaining unions did away with longevity pay for new hires.

New employees represented by the SEIU at the Regional Transportation Commission are still eligible for longevity pay, due to an arbitrator’s decision in 2012. Union-represented staff at the Southern Nevada Health District and Las Vegas Convention and Visitors Authority are also eligible.

Contact Ben Botkin at bbotkin@reviewjournal.com or 702-405-9781. Follow @BenBotkin1 on Twitter.