Arbitrator: county can’t kill UMC longevity pay

Clark County cannot eliminate longevity pay for new hires at University Medical Center, a move that county officials had sought to save the public hospital $122 million during the next three decades.

An arbitrator ruled in favor of the Service Employees International Union Local 1107 in the dispute between the county hospital and the union for UMC employees. The union had sought to preserve the benefit for future employees, while county management wanted to eliminate longevity pay in the future.

County officials received the decision Tuesday.

County Manager Don Burnette called the arbitrator’s decision a “big setback.”

“I’m extremely disappointed,” Burnette said. “UMC is facing significant financial challenges, and we are doing everything we can now to position UMC to survive the next few years.

“I believe our entire focus has been on helping UMC become financially sustainable long term and reducing their dependence on taxpayer subsidy in the process.”

Martin Bassick, president of the SEIU Local 1107, noted that both UMC management and the union had negotiated a tentative agreement to include longevity pay for new, future hires.

County commissioners voted 4-3 against the agreement in February, with opponents citing concerns about longevity pay staying in place for future employees.

“We’re glad because both sides agreed to that,” Bassick said. “Both UMC’s management and the union side negotiated that contract in good faith.”

Bassick said the arbitrator’s decision is a “win for both UMC and the union.”

Lawrence Barnard, UMC’s CEO, disagreed.

“The arbitrator’s decision is not a win for UMC,” Barnard said. “The hospital is obviously struggling to remain solvent, and putting the hospital on the path to long-term financial sustainability is an enormous challenge. How can anyone suggest incurring $122 million in unnecessary future expenses is a good thing for UMC or taxpayers?”

Barnard said longevity pay is unnecessary for the labor market.

Arbitrator Jay Fogelberg said in his decision that the tentative three-year agreement both sides initially agreed on included longevity pay.

“Their settlement included wage adjustments and longevity,” Fogelberg wrote. “Such evidence is most significant and cannot be ignored.”

Despite the ruling, the arbitrator noted that longevity pay isn’t offered at any other hospital in Las Vegas and agreed with UMC’s assertion that the bonuses don’t aid the retention of staff.

After commissioners rejected the tentative agreement, UMC management offered a one-time payment of $500 to each employee in exchange for eliminating longevity for future hires. Under that proposal, current employees would have remained eligible for longevity pay. SEIU rejected that offer.

Employees receive longevity pay in lump sums after eight years on the job. It pays 0.57 percent of the base pay for each year of service. There also are annual increases for additional years on the job and for increases to employees’ base pay.

UMC’s longevity pay costs were $6.9 million in 2013.

The new contract’s provisions — already agreed to by both parties — include a 2 percent cost-of-living increase retroactive Jan. 1 that restores a 2 percent pay cut employees shouldered in 2011. The employees also will receive a 2 percent cost-of-living increase retroactive to July 1 and a 1.5 percent cost-of-living increase effective July 1, 2015.

The contract’s additional costs for the three-year period are $10.9 million.

UMC has struggled to stay afloat financially. The county increased the hospital’s subsidy for this year from $41 million to $71 million and provided it with $45 million in loans.

The hospital in August announced the elimination of 285 positions from its 3,400-employee workforce, 224 of them layoffs and another 61 vacant positions that will stay unfilled. That move will save $21.5 million in the first nine months, or roughly $28 million for a full year.

The union is concerned about the loss of shuttered clinics and elimination of UMC services, Bassick said.

Clark County has gradually phased out longevity pay for 11 other labor unions since 2002, with the SEIU being the lone holdout. The arbitrator’s decision doesn’t affect SEIU-affiliated county employees who don’t work at UMC. The county is still negotiating with other SEIU workers, who fall under a separate contract.

Contact Ben Botkin at bbotkin@reviewjournal.com or 702-405-9781. Find him on Twitter: @BenBotkin1.