Merced County should restore loyalty bonuses, independent review says

Merced County should restore a $750 loyalty bonus to its veteran employees, an independent fact-finder determined in a report released to the public Wednesday.

A fact-finder was hired after Merced County failed to reach an agreement with its largest union. The dispute was centered around the county not renewing a $750 loyalty bonus, which was in place since 2001. The fact-finder is paid equally by the union and county to hear arguments from both sides and make a recommendation.

According to the report, the recommendation to the Board of Supervisors was to retroactively restore the 2014 loyalty bonus and consider making the bonuses a permanent benefit in the future.

The recommendation from the fact-finder is advisory only and doesn’t compel the county to take action. But leaders from the union, which has been fighting for the loyalty bonuses since April, say it’s a victory to have a neutral third-party side with them.

“We are pleased that the panel’s conclusion supported what we have been saying all along, that there was no business reason for the takeaway,” said Dartine Solis, president of the American Federation of State, County and Municipal Employees, Local 2703. “This represents a huge victory for our union members going forward. We hope that the county will agree with the decision and restore the $750 immediately.”

The loyalty bonuses provided $750 annually to employees who’ve worked for the county 10 years or more. The bonuses were used as a tool to recruit and retain employees, said county spokesman Mike North, but were not automatically renewed in the union’s contracts. County and union officials would renegotiate the bonuses with each new agreement.

But the loyalty bonuses from AFSCME’s last contract expired and weren’t reinstated after December 2013. An estimated 374 employees got a final loyalty bonus in 2013, costing the county $280,500, the report said. Roughly 600 county employees across the organization received the bonus in 2013.

North said the loyalty bonuses weren’t continued because recruitment and retention problems no longer exist. “Because of changes to the economy and the labor pool, the county hasn’t had issues with retaining employees so the loyalty bonuses didn’t serve their purpose anymore,” he said.

The Board of Supervisors also gave direction that no economic items would be approved in this round of negotiations, according to Merced County Human Resources Director Marci Barrera. She estimated the bonuses cost the county more than $400,000 for all employees in 2013, calling it a “substantial cost.”

“That’s a significant amount of money for a county that’s struggling financially,” Barrera said. “It was no longer in the contract, and the board did not agree to give an economic item this year if they didn’t have to.”

However, the county never said it was unable to fund the loyalty bonus, according to the fact-finder’s report. Not renewing the bonuses is perceived as a concession by employees that counted the money as part of their compensation since 2001, AFSCME representatives said.

County employees haven’t seen raises since 2009, although the cost of living has increased, the report said. The workers also suffered wage cuts, layoffs and furloughs, said Kristy Waskiewicz, business agent with Local 2703.

“It was an egregious act for them to take away a benefit when there was no business need to do so, especially from people that had given so much already,” Waskiewicz said. “A neutral, third person looked at the issue and agreed with us – the county had no justifiable reason for doing this.”

Neighboring Madera and Stanislaus counties approved raises for AFSCME employees in the past year, she added.

Merced County and AFSCME officials will begin new negotiations in March. According to the fact-finder’s report, the dispute over the loyalty bonuses could poison the next round of labor talks.

“The county’s continued insistence on eliminating the 2014 bonus will hang like a dark cloud over the bargaining table and will strain the parties’ relationship both at and away from the table,” the report said.

This story was originally published February 11, 2015 at 6:57 PM with the headline "Merced County should restore loyalty bonuses, independent review says."