What Happened
An arbitrator in Allentown, Pennsylvania, awarded a victory to the city in a long-running dispute over a new contract with the Fire Department.
So What?
Cities across the country are looking to crack down on abuse of sick time, overtime, and other compensation schemes, to save money. The victory in Allentown provides an interesting benchmark for other municipalities to review.
The Changes
Under the terms of the agreement, the following changes will apply:
- Manning Reductions—Shifts will drop from 30 firefighters to 25. The city will not only save money by eliminating five positions, but from the overtime required to cover those additional positions.
- Overtime Savings—City officials believe total savings from overtime in future years will be in multiple millions of dollars. Overtime calculated for pension benefits has been reduced to 10 percent; previously, any overtime earned by firefighters was counted at 100 percent in pension calculations, which led to significantly increased retirement benefits. This change will only apply to new hires; there are currently 36 vacancies. By March of this year, the city had already spent more than a third of its $1.5 million overtime budet.
- Sick Leave Savings—Under the previous contract, firefighters were allowed to take sick leave of up to six days without a doctor’s note. In the new collective bargaining agreement, notes are now required after three days. There are several reasons why this change is important, but—again—overtime is key: A firefighter calling in sick requires overtime to bring in off-duty personnel.
- Tempered Salaries—Under the terms of the new four-year deal, no raises will be given in the first two years, followed by consecutive three percent increases in the final two years.
Union Challenge
As expected, the union is challenging the arbitrator’s decision, and is seeking a date with the state’s Supreme Court.
Other Cities Crack Down
Due to abuse of sick time, other cities around the country are cracking down:
- San Jose, CA—San Jose put forth a Fiscal Reform Plan in 2011 that outlines multiple ways to cut costs incurred by personnel. On page 27, the city details its sick leave efforts, including completely eliminating sick leave payout from pension benefits, which would save $9.5 million annually.
- St. Louis, MO—St. Louis saw its firefighter pension costs increase 400 percent in the last four years, forcing the city to seek solutions at reigning in costs. With nearly half of retirees on disability, the city is pushing for reform that would reduce disability compensation from 75 percent of salary to 25 percent of salary if other gainful employment is possible.
- New Haven, CT—Like the Allentown provision, New Haven requires a note from a doctor for personnel who call in sick three times during a 12-month period.
Benchmarking Sick Leave
A copy of the Woonsocket, RI fire contract details how sick leave is handled. Full-time personnel receive 12 hours of sick leave per month (6 days), maxing out at 1,320 hours. For unused leave annually, personnel are paid in full based on hourly salary within 30 days of the end of year.