The Nexus Group: Retirement & Benefits for March 6

Mar 06, 2015

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Posted by Jerry Bender

The Nexus Group: Retirement & Benefits for March 6

Bills are clearly on the move through both chambers as they race to meet the March 11 deadline where bills need to clear their chamber of origin.

HB 1355: Increasing the minimum hourly wage to twelve dollars an hour over four years, passed the House on March 3rd along a party line vote (51 to 46 with 1 excused). It has been sent to the Senate where it is doubtful to pass.

The bill lays out a series of graduated raises in the minimum wage:

Beginning 1/1/2016 – $10.00
Beginning 1/1/2017 – $10.50
Beginning 1/1/2018 – $11.00
Beginning 1/1/2019 – $11.50
Beginning 1/1/2020 – $12.00
And thereafter: rate adjusted for inflation

The net effect on school districts is expected to be minimal.

HB 1356: Establishing minimum standards for sick and safe leave from employment passed the House on March 3rd with a party line vote identical to HB 1355 above. It has been sent to the Senate where it also is doubtful it will pass.

The bill would require employers, which include political subdivisions (school districts) of the state and any municipal corporation or quasi-municipal corporation with more than four full-time FTE’s to provide paid leave to employees. Paid leave would be permissible for (1) specified medical reasons relating to the employee’s or a family member’s health; (2) reasons permitted under existing law requiring unpaid leave for purposes related to domestic violence, sexual assault, and stalking; (3) closure of the employee’s place of business or child’s school or place of care due to specified public health emergencies. The leave is accrued based on the number of hours an employee works, ranging from one hour for every 40 hours worked to one hour for every 30 hours from a Tier 3 employer. Leave would be allowed to be carried over.

The fiscal note reads, “OSPI assumes districts’ leave policies provide a sufficient amount of leave to meet the hourly requirements for Tier 1–3 employers. Tier 1 employers have 5–49 FTE’s, Tier 2 (50–249 FTE’s) and Tier 3 employers have 250 or more FTE’s. Districts may have to modify policies to comply with the eligible uses of leave defined in the bill and if the updated policies result in an expansion of leave eligibility, districts may see an increase in leave usage, which could result in additional costs for substitute teachers.”

The bill reads that paid sick and safe leave requirements do not apply to any employees covered by a bona fide collective bargaining agreement to the extent the requirements are expressly waived in clear and unambiguous terms.

For more information, read the actual detailed bill and to the bill narrative report.

This bill has some possible costs that I believe were unintended, but nevertheless could result from this bill. There is a significant cost to universities who use student employees. OSPI did not consider the district cost for part-time employees, such as a community coach for a sport who would qualify if he/she works more than 240 hours a year. Cities and counties also know it will cost them, but as is the case for numerous agencies in the fiscal note, the costs are indeterminate.

SHB 1737 Addressing the availability of retired teachers as substitutes.

This bill is now on the House Second Reading calendar awaiting action. Leaders in the House are confident this bill will pass by the deadline. Representative Sam Hunt proposed an amendment that made three basic changes from the original bill:

  1. Districts must document a shortage of certificated substitute teachers;
  2. The number of hours a retired teacher may work without suspension of retirement benefits was increased from 216 hours to 630 hours (The intent was to basically allow up to a semester of substitute availability, but this would vary depending on the length of an individual school day); and
  3. The bill will sunset August 1, 2019. The bill as amended was adopted in committee by a 31 to 2 vote, so it clearly has strong bipartisan support.

SB 5148 Allowing members who retire early under alternate early retirement provisions as set forth in RCW 41.32.765(3) and 41.32.875(3) to work as substitute teachers and continue receiving retirement benefits at the same time.

This bill did not make the cutoff so is deemed dead. There is strong opposition by Senators Bailey and Schoesler to this bill, and the chair of the committee chose to not bring the bill before the committee even though its two prime sponsors were Republican Senators Parlette and Dammeier.

Assuming passage of EHB 1737, the challenge will be to get support from Senator Hill, the chair of the Senate Ways and Means Committee, to schedule a hearing and then a vote. But at this point, the House bill has yet to pass the chamber.

SB 5941 Concerning certification of adjunct faculty as common school substitute teachers.

This bill requires the Professional Educator Standards Board to amend or adopt rules that provide for issuance of the certification necessary to serve as substitute teachers, other than emergency substitute certification, to adjunct faculty currently employed in institutions of higher education who meet certain criteria.

The bill was approved by the House on a vote of 48–1. It has been sent to the Senate awaiting scheduling before the House Education Committee.

SSB 5976 Establishing a consolidating purchasing system for public school employees.

Sponsors: Senators Litzow, Keiser, Becker, Rivers, Hobbs, Hill, Hatfield, Fain, Baumgartner, McAuliffe, Dammeier

This bill creates the School Employees’ Benefits Board (SEBB), within the state Health Care Authority (HCA), to design and approve state-wide insurance benefit plans for school employees and to establish eligibility criteria for participation in insurance benefit plans. It would remove health benefits from collective bargaining at a district level and put the responsibility for statewide collective bargaining with the Governor or his designee.

This bill is virtually the same as SB 6442/HB 2724 which was introduced in the 2012 Legislative Session and received no floor action in the Senate and no hearings in the House.

The stated intent of the bill is to create savings through assumed efficiencies to assure equitable access to health care for all eligible employees and their dependents and to assure assumed cost-effectiveness through pooling, leveraged purchasing, and administrative simplification. One of the chief savings would come from an elimination of the broker and administrative fees currently paid in the private plans in place.

This bill is currently in the Rules Committee and has not been put on floor calendar.

There are two other bills of note that are a direct result of a King 5 news story regarding convicted felons receiving state pensions. These bills are clearly politically motivated and actually represent policy changes which technically put them out of order since the deadline for action on policy bills was February 27. This does not mean, however, that the Senate Ways and Means Committee will not hear them.

SB 6076 Garnishing public pensions to pay for the costs of incarceration of a public employee convicted of a felony for misconduct associated with such person’s service as a public employee.

Sponsors: Senators Bailey, Litzow, Benton, Baumgartner, Sheldon, Becker, Schoesler, Angel, Miloscia, Honeyford, Braun, Fain

Addresses the Department Of Retirement Systems’ compliance with an order to garnish up to fifty percent of the gross monthly benefit for costs of incarceration, probation, parole, or restitution imposed on a member, former member, or retiree as a result of a conviction or a plea of guilty or nolo contendere to the commission of a felony for misconduct associated with the person’s service as a public employee for which credit in the plan was accrued, for felonies committed on or after July 1, 2015.

SB 6077 Authorizing the forfeiture of the pension of a public employee convicted of a felony for misconduct associated with such person’s service as a public employee.

Sponsors: Senators Bailey, Litzow, Benton, Baumgartner, Sheldon, Becker, Angel, Schoesler, Hewitt, Miloscia, Braun, Fain

This bill requires a court, if a member of a state retirement system or plan is convicted of or pleads guilty or nolo contendere to an offense that is a class 1,2,3,4, or 5 felony that was committed in the course of, or was related to, the member’s employment as a public official or public employee, to order the person’s membership terminated and the person shall forfeit all rights and benefits earned under the state retirement system or plan.

Feel free to contact me if you have any questions.

Fred Yancey
The Nexus Group

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