Pay Cuts on the Horizon for WCAB and DWC Staff?

Thursday, January 14, 2010 | 0

By Julius Young

Gov. Arnold Schwarzennegger's budget proposal was Jan. 8.

He's shifting his strategy from furloughs to proposed pay cuts.

A recent ruling by Alameda County Superior Court Judge Frank Roesch found that many of the furloughs of state workers were illegal.

Unveiling his plan to plug the gaping hole in California's budget (which may be as much as $20 billion), today the Governor signaled that he will seek a 5% state worker pay cut and an increase in employee retirement contributions equal to 5% of salary, instead of furloughs. If enacted, these cuts could reduce state worker pay by 10%. The affect of furloughs was an effective 14% pay cut for many state workers.

This can't go into effect without legislative approval, and state worker unions contend that the Governor must enter a bargaining process.

But it seems clear that Schwarzenegger has no plans to exempt "user funded" state agencies from the proposed cuts.

Writing in the Sacramento Bee, Kevin Yamamura notes that:
"The administration has said the state needs special-fund savings to help preserve its overall cash flow. It also believe most state workers are paid from a blend of special funds and general funds."

Schwarzenegger apparently believes that $1.6 billion will be saved by this maneuver in the next fiscal year.

This will come as a bitter pill to many of the clerks, raters, and judges at the California Workers' Compensation Appeals Board, and to much of the DWC staff.

If the economy does not recover soon these cuts could be chronic.

While it's good to note that furloughs will increase access time to to the courts, the effect of pay cuts is demoralizing to WCAB and DWC staff.

It's not a pretty picture. And it's particularly galling to employers, insurers and the comp community, all of whom continue to see user funding assessments rise.

Hopefully the state worker unions will prevail in the courts if not in the legislature. User funding should be sacrosanct.

Julius Young is an applicants' attorney with Boxer & Gerson in Oakland. This column was reprinted with his permission from his blog, http://www.workerscompzone.com