Arbitrator Orders State to Make Workers Whole

Justice for state employees – hundreds of workers will finally be compensated

 “This situation began under the Lynch administration. Governor Hassan inherited it. We hope she will fully uphold the arbitrator’s decision and make sure the funds are available to truly make the workers whole,” said Diana Lacey

Yesterday, an independent arbitrator ruled in favor of more than 1,000 NH state employees in a key victory that reversed a unilateral change the state made to lower employee pay.  The decision directed the state to make the affected employees whole with back pay. The ruling corrects a violation of state law and the Collective Bargaining Agreement between the State and the Executive Branch workers represented by SEA/SEIU Local 1984.

The dispute began in August of 2012, when Matthew Newland, Manager of Employee Relations and a Governor John Lynch appointee, issued a memo to state human resource and payroll representatives rescinding a long standing practice related to shift differential payments that apply to more than 1,000 state workers.

State agencies with continuous operations face the challenge of recruiting and staffing employees to work beyond standard day shifts. An effective practice used by many employers to meet this challenge, including the State, is to adjust employees’ hourly pay. There are many state functions that require round the clock staffing, such as correctional law enforcement, emergency services, and providing direct care in health facilities, including New Hampshire Hospital and Veterans’ Homes.

After the state stalled for months a resolution that could come from less formal remedies, SEA/SEIU Local 1984 filed an Unfair Labor Practice petition with the Public Employees Labor Relations Board (PELRB), and then a subsequent ULP after the state further stalled progress.  Ultimately, the PELRB ordered the parties to go to arbitration and the state finally abided. After more than a year of wrangling, the arbitration took place in January of this year.

In yesterday’s decision, the arbitrator found the practice of paying shift differential was established through a state memo issued in 1989, and there was no evidence that the practice had been rescinded since. The practice had been in place and “occurred with such regularity and frequency that employees could reasonably expect the practice to continue on a regular or consistent basis.” Therefore, the practice could not be rescinded through a memo; the differential pay is subject to collective bargaining.

During the arbitration, the state asserted that ordering payment of the back shift differential pay would require a legislative appropriation and thus the arbitration decision would be advisory only. The arbitrator, however, addressed this in the decision saying that funds to cover shift differential came from the agency’s overtime budget. “When overtime accounts were deficient, the agencies reallocated funds to ensure that employees were paid their respective wages, including overtime pay and shift differentials….The agencies certainly have the discretion to reallocate resources and funds to comply with the make whole remedy in this Decision.”

“Making the affected employees whole was the desired outcome,” said Diana Lacey, President of SEA/SEIU Local 1984.  “For affected workers paying rent, buying food and heating their home is more challenging now than ever.  These employees work hard providing critical services such as caring for veterans, the elderly and the mentally ill; watching over prisoners and responding to emergencies. It is only fair that they be compensated for their time,” she said.  “This situation began under the Lynch administration. Governor Hassan inherited it. We hope she will fully uphold the arbitrator’s decision and make sure the funds are available to truly make the workers whole.”

The application of the shift differential payments has not been consistent in the various facilities; as each facility has unique practices and needs.  Each facility had handled its own payroll processing and there were provisions in each process to accommodate the shift differential payments.

In 2012, the state rolled out an off the shelf software product to consolidate payroll and leave accrual processing.  During arbitration, Newland acknowledged that the new computerized payroll system was incapable of processing the various benefits and payments for all agencies in a consistent manner. It was far easier to simply end the practice of paying shift differential than to admit the costly software was not compatible with the state’s payroll needs.

In his decision, the arbitrator wrote that “the fact that determining the overtime rates is complicated does not justify the unilateral elimination of the payment of shift differentials to employees” and “moving to a new computerized payroll process does not authorize the state to have unilaterally eliminated a two decade long practice of paying shift differentials.

 

 

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