Personnel Related Cost Savings Measures

1. Personnel Related Cost Savings Measures Options and Issues Hazel McMullin, Deputy Director Human Resources

2. Where Gwinnett County Started • Third Quarter 2008 • Services, Value and Responsibility Study • Primarily County Administrator Departments • 9 Ad Hoc Committees • Fleet, Core Services, Administration, Public Safety, Supplies/Inventory, Personnel/HR, Planning and Development, Rates/Fees, Facilities/Support Services • $26.2 million in savings for 2009 budget

3. Personnel Related Cost Saving Measures • Implemented • Hiring Freeze • Vacant Position Eliminations • Retirement Incentive Offer • Reduction in Force • Departmental Reorganizations/Staff Realignment • Reallocation of personnel costs – Capital, SPLOST and enterprise funds where appropriate; other agencies • Other policy changes • Reduction of excess sick leave payout • Exclusion of overtime from pensionable earnings • Increased employee contribution to DB pension • Eliminated longevity pay

4. Personnel Related Cost Saving Measures • Considered but not implemented • Furloughs • Across the board pay reductions • Specified vacancy to posting hold times • Total/no consideration hiring freeze • Holiday reduction • Leave cap/carryover/accrual reductions

5. Retirement Incentive Offer • Offered only in departments where a business need existed to reduce personnel costs to achieve budget targets • Costs for program paid by reserve fund set up from departments budgets or directly from departmental budgets • Required that costs savings be carried into future years • Captured full cost of program RIO and regular retirement costs

6. Retirement Incentive Offer • Offered to 317 employees • Target was 250 • 203 accepted • Left organization by 9/18/09 • Cost/Savings of program • $5 million in salary savings ’09 • $4 million in RIO (only) costs ’09 • $1 million in net ’09 savings • $55 million in cost savings thru 2012

7. Retirement Incentive Offer • Eligible to retire on or before 12/31/2010 • Components of the Incentive • Additional 20% Annual Leave payout • 20% Sick leave payout • Longevity – 1 week of pay for each 2 years of service • Health Insurance at no cost for 24 months • Leave without Pay until eligibility date, if not currently eligible for retirement

8. Retirement Incentive Offer - Issues • Future retirees on LWOP hard to administer – tracking, future leave accruals, status during LWOP • Program administration hectic but doable • Clarity about RIO provisions and communication (how to calculate what) for administration staff • Pensionable versus nonpensionable earnings • Clarity about what are costs, what are savings, how to calculate and communicate • Press/Media Interest/Open Records

9. Reduction in Force • January 2009 • Planning and Development (30) • September 2009 to Present (17) • Human Resources, Support Services, Department of Transportation, Department of Financial Services • Still more to do based on new business plans for departments • Future outsourcing impacts

10. Reduction in Force • General announcements in advance • Merit Rules • Guide process • Retreat rights in January • Multiple rounds of bumping • Administrative and timing nightmare • Removed before September • Individual meetings with designated employees on day of notification • Two weeks paid administrative leave • Severance pay – 2 weeks per full year of service • Required signed severance agreement with litigation waiver

11. Reduction in Force - Issues • 40 and over/under 40 • ADEA severance agreement requirements • Date/timing requirements • Different timelines • Adverse impact • Immediate removal of access • Facilities, computers • RIF to retirement (declined RIO) • Severance payout • Must be after last paycheck and separate from earnings • Tracking • General • Simultaneous with RIO with similar but different rules and timelines

12. Furloughs • Reduction of work hours to achieve cost savings • Unpaid or through accrued leave usage • Voluntary or Involuntary • Cost savings easy to capture • Cost savings immediately realized • Easy concept to understand • Seems “fair” if applicable to whole organization

13. Furloughs - Caution • FLSA • No problem for non exempt • As long as receiving at least minimum wage for hours worked • Exempt • Can’t reduce “salary” without losing exemption – generally speaking • Furlough for full work week without pay or with leave usage • Volunteer to take unpaid time off for “personal reasons” • Must be completely voluntary • Must be in full day increments

14. Furloughs - Caution • FLSA Exempt Continued • Announce separate day/reduced schedules in advance • Can reduce weekly schedules • Must meet minimum salary basis of $455/week • Best to set regular intervals Example: 1 day per month for the next three months or state specific dates

15. Furloughs - Caution • FLSA Exempt Continued • Exempt employee choice or irregularly scheduled furlough days • Public employers may make salaried pay deductions (furlough) during a week but must treat employee as non-exempt during that week • No blackberries, no phone calls, no computers/email, no emergency response without hourly pay for it

16. Furloughs - Caution • Additional administrative issues • Close business or stagger furloughs • Absences on furlough days • “Essential” employees – Yes or No • Furloughs applied fairly to different schedules • Rule issues – requirement to use all paid leave prior to unpaid ? Suspend? • FMLA, STD, Workers Comp • Part time employees – pro-rate • Contract workers – work or not • New hires

17. Furlough Information Sources • Department of Labor, Wage and Hour Division • http://www.dol.gov/esa/WHD/flsa/FurloughFAQ.pdf • Comprehensive sample policy example • Google “Technical Guidance on Mandatory Furloughs” – First listing is for the State of Colorado Department of Personnel and Administration

18. Personnel Related Cost Saving Measures Thank you for your attention. Hazel McMullin Hazel.mcmullin@gwinnettcounty.com 770-822-7935