FISCAL NOTE
Date Requested: March 14, 2017
Time Requested: 01:39 PM |
| Agency: |
Personnel, WV Division of |
|---|
| CBD Number: |
Version: |
Bill Number: |
Resolution Number: |
| 1620 |
Introduced |
HB3082 |
|
|---|
| CBD Subject: |
Labor, State Personnel |
|---|
|
FUND(S):
Sources of Revenue:
Other Fund
Legislation creates:
Neither Program nor Fund
Fiscal Note Summary
Effect this measure will have on costs and revenues of state government.
The Division of Personnel is unable to provide financial data since annual leave payment is based upon an employee’s rate of pay and for other reasons explained herein.
Fiscal Note Detail
| Effect of Proposal |
Fiscal Year |
2017
Increase/Decrease
(use"-") |
2018
Increase/Decrease
(use"-") |
Fiscal Year
(Upon Full
Implementation) |
| 1. Estmated Total Cost |
0 |
0 |
0 |
| Personal Services |
0 |
0 |
0 |
| Current Expenses |
0 |
0 |
0 |
| Repairs and Alterations |
0 |
0 |
0 |
| Assets |
0 |
0 |
0 |
| Other |
0 |
0 |
0 |
| 2. Estimated Total Revenues |
0 |
0 |
0 |
Explanation of above estimates (including long-range effect):
Estimated Costs
• The Division of Personnel is unable to provide financial data since annual leave payment is based upon an employee’s rate of pay and for other reasons explained herein. For employees with less than 5 years of service, agencies would be obligated to provide an additional 0.13 days of annual leave per month (from 1.25 to 1.38 days per month). The effects of additional annual leave could include, but is not limited to:
o Increase in the use of annual leave. While the approval of annual leave is discretionary, the language would provide newer employees with the ability to take more time off from work. Since leave accrued by new hires can no longer be used to enhance insurance or retirement benefits at retirement, employees are less motivated to retain balances.
o More time on paid leave for medical reasons since approval of annual leave is not discretionary when sick leave is exhausted. Agencies are required to continue to pay their portion of the health insurance while an employee is on sick leave, annual leave, and/or medical leave of absence without pay.
o Increased amount of annual leave compensation due upon separation (i.e. resignation, dismissal, layoff, or retirement). This is required per the West Virginia Division of Labor’s Wage Payment Collection Act and the West Virginia Division of Personnel’s Administrative Rule.
o Increased amount of time an employee may use annual leave to remain on payroll upon separation due to resignation or retirement. This not only ties up a position, but the agency is obligated to provide health insurance while terminal annual leave is exhausted.
• Modifications to the wvOASIS system will be required to track the different accrual rates.
Estimated Savings
• It is difficult to estimate the savings since annual leave payment is based upon an employee’s rate of pay. However, employees with 10 years, but less than 15 years of service, will accrue 0.12 days less per month than current employees with the same service (from 1.75 to 1.63 days per month) and employees with 15 or more years of service would be accruing 0.25 days less per month than current employees with the same service (from 2.00 days to 1.75 days per month).
• Employees would be eligible for less discretionary paid time off from work.
• Employees would be eligible for less time on leave due to medical reasons since annual leave is used when sick leave is exhausted. Agencies are required to continue to pay their portion of the health insurance while an employee is on sick leave, annual leave, and/or medical leave of absence without pay.
• Decreased amount of annual leave compensation due upon separation (i.e. resignation, dismissal, layoff, or retirement). This is required per the West Virginia Division of Labor’s Wage Payment Collection Act and the West Virginia Division of Personnel’s Administrative Rule.
• Decreased amount of time an employee may use annual leave to remain on payroll upon separation due to resignation or retirement.
Memorandum
• Possible exacerbation of existing recruitment and retention issues with the annual leave rate dropping for employees after 10 years of service. Annual leave accrual is an increasingly valuable recruiting tool for agencies as pay and other benefits diminish.
• Agencies will be required to track, through use of the wvOASIS system or otherwise, two sets of accrual leave rates for their employees, requiring more time and resources.
• Employees hired before 6/30/17, with 5 or less years of service, will be accruing less annual leave than employees hired after 6/30/17 which could decrease morale. This will worsen an existing morale issue relating to new employees in the same classification getting paid more than current employees due to lack of pay increases (pay compression) and recruitment challenges. This dissatisfaction may result in increased costs associated with employee turnover and grievances.
• Requires amendment to West Virginia Division of Personnel’s Administrative Rule (143CSR1).
• Agencies not covered by the Division of Personnel are not obligated to comply with the leave provisions provided under Division of Personnel law, rule, or policy. This would further complicate leave administration.
Person submitting Fiscal Note: Joe Thomas
Email Address: joe.f.thomas@wv.gov