Miami-Dade County

January 8, 2014

County: Cut Miami-Dade workers’ salaries to increase take-home pay

A proposal by Mayor Carlos Gimenez’s administration would eliminate a contentious healthcare contribution by county employees and replace it with a smaller salary cut.

Mayor Carlos Gimenez’s administration has come up with a new possible compromise to end an unpopular healthcare contribution required from most Miami-Dade County and Jackson Health System workers.

But employees still wouldn’t be getting their full paychecks.

Their take-home pay would go up slightly. Yet their wages would get cut across the board.

It sounds counter-intuitive, slashing salaries to bump up workers’ pay. But the math adds up, the county says, because shrinking wages would result in overtime and fringe-benefit savings.

Right now, most workers contribute 5 percent of their base pay toward group healthcare costs. Under the latest proposal, that direct contribution would go away. Instead, the county would reduce salaries by 3.5 percent, amounting to a 1.5 percent increase in employees’ take-home pay.

That’s where the rub lies for labor unions. In the past, they have opposed plans that would lower salaries and result in smaller pension payouts for some employees.

The mayor’s deputies laid out the idea Monday at a meeting with the American Federation of State, County, and Municipal Employees Local 199, which represents general-government workers.

“No one’s welcomed it with open arms yet,” Andy Madtes, the union’s administrator, told the Miami Herald.

The County Commission has scheduled a special meeting for Jan. 16 to try to resolve ongoing union contract disputes over the healthcare contribution.

An earlier alternative floated by the mayor to give lower-paid employees a one-time bonus had also received a lukewarm reception. Yet the latest proposal would benefit all workers, said Arleene Cuellar, the county’s human resources director.

“Everybody takes home more money,” she said, while conceded it wouldn’t be much more. “By doing that, we don’t have to impact services.”

An employee making $45,422 a year, the average for a Local 199 union worker, would have her salary reduced to $43,832 but bring home $459 more a year because she would no longer be making a $2,271 healthcare contribution, a county analysis shows.

Miami-Dade would not have to come up with any other budget cuts to pay workers more, according to Gimenez’s administration. The county would save enough money in lower federal payroll and Medicare taxes, and in reduced overtime rates, to afford the increase.

The savings from each of the county’s administrative departments that cover the payroll for their employees would then go to the health-insurance trust fund, which would still receive the same amount of funding as under the 5 percent contribution.

Also in attendance at Monday’s union meeting were leaders of 10 other bargaining units at impasse with the county over their labor contracts. Those unions represent police officers; general professionals and supervisors; water and sewer workers; transit workers; Jackson hospital support staff and Jackson healthcare professionals, nurses and professionals.

The unions released a “declaration of unity” on Wednesday reiterating their position that the healthcare contribution be eliminated altogether.

Unions representing sanitation and aviation workers have already had their pay restored. Firefighters have been exempt from the healthcare contribution because they have a separate insurance plan.

The contract disputes arose after Gimenez asked to extend the healthcare contribution past Jan. 1, when it had been scheduled to expire.

Commissioners adopted a budget in September that kept the property-tax rate flat and continued the contribution. But then they voted in in early December to restore workers’ pay.

Gimenez vetoed that decision. Last month, the commission failed to muster enough votes to override the mayor.

As an alternative, Gimenez suggested giving employees on the lower end of the pay scale a one-time bonus: $1,500 for those making less than $40,000 a year and $1,000 for those making between $40,000 and $50,000.

But several commissioners said they would prefer permanently restoring a portion of workers’ pay.

Gimenez’s administration projected that eliminating the healthcare contribution would lead to more than 100 layoffs and create a $56 million shortfall this year and a bigger one next year in the county’s $4.4 billion operating budget.

Unions agreed to the healthcare contribution four years ago to help the county weather the economic recession. The concession was initially proposed as an across-the-board pay cut, but later shaped into a payment toward healthcare costs to preserve worker pension benefits. Even employees who work part-time and do not receive benefits or are insured by an outside plan must make the contribution.

The accounting distinction between a pay cut and a healthcare contribution, intended to benefit employees, has led to bickering over semantics, with unions accusing the county of making it sound as if employees wouldn’t otherwise bear any health-insurance costs. Miami-Dade pays for workers’ basic premiums, though they must pay out of pocket for higher coverage and for their dependents, as well as for co-payments and other costs.

Cuellar, the human-resources director, said a 3.5 percent salary cut would clear the air.

“This gets us away from the ‘smoke-and-mirrors’ of this insurance contribution, and it goes back to the original intent,” she said. “It was supposed to be a salary reduction.”

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