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Lawmakers urged to reject new labor contracts

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in Compensation and Benefits,Employment Law,Human Resources

The nonpartisan California Legislative Analyst’s Office (LAO) has urged state law­makers to consider rejecting some or all of six new collective bargaining agreements negotiated with state employee unions in March.

LAO was required to conduct fiscal analyses of the six agreements before law­makers could ratify the contracts.

The pending contracts would increase employee contributions to pensions and change pension formulas to require employees to work longer before retiring, receive lower pension benefits or both. Most of the contracts would also eliminate two paid holidays—no more paid time off for Columbus Day and Lincoln’s Birthday.

Gov. Jerry Brown had projected that the state would save $515 million in the 2011-2012 fiscal year by reducing employment costs by 10%.

The LAO isn’t so sure. Its analysis predicts savings totaling less than half that amount, falling short by $306 million. The LAO also noted that the contracts contain some provisions that could increase costs over time, especially with regard to time off.

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