Senate Bill No. 420
(By Senator Manchin)
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[Introduced February 21, 1994; referred to the Committee
on Government Organization; and then to the Committee on
Finance.]
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A BILL to amend chapter twenty-nine of the code of West Virginia,
one thousand nine hundred thirty-one, as amended, by adding
thereto a new article, designated article six-b, relating to
the state employees' public pay equity act; setting forth
findings and declarations; providing definitions;
establishing public pay equity for state employees;
requiring an annual calculation of public pay equity;
providing that any public pay ceiling is not an entitlement;
requiring the secretary of administration to determine the
public pay equity ceiling; and establishing reporting
requirements.
Be it enacted by the Legislature of West Virginia:
That chapter twenty-nine of the code of West Virginia, one
thousand nine hundred thirty-one, as amended, be amended by
adding thereto a new article, designated article six-b, to read
as follows:
ARTICLE 6B. PUBLIC PAY EQUITY ACT FOR STATE EMPLOYEES.
§29-6B-1. Legislative declarations and findings.
The Legislature hereby finds and declares that:
(a) State government relies solely upon taxes and user fees
collected from individuals and enterprises in the private sector
to fund government functions and services.
(b) Continued funding of state government functions and
services requires a healthy and expanding private sector.
(c) In the competitive market, competitive forces operate to
efficiently allocate resources, minimizing the prices of goods
and services and benefiting society by broadening economic
affluence.
(d) In noncompetitive private markets, where competitive
forces less effectively limit the prices of goods and services,
state government imposes economic regulation, seeking to
reproduce the operation of the competitive market to obtain its
benefits.
(e) In the competitive market, employee compensation is
determined by the interplay of competitive forces, while in
noncompetitive private markets employee compensation is
determined by regulation that seeks to reproduce competitive
forces.
(f) State government is noncompetitive, and as result is
neither sufficiently subject to competitive forces nor to
regulatory reproduction of competitive forces. State government
employee compensation therefore is not sufficiently related tocompetitive forces.
(g) It is in the public interest for the compensation of
state government employees to be influenced by competitive
forces, just as the compensation of private sector employees is
influenced by competitive forces.
(h) To accomplish the purpose of applying competitive forces
to the determination of state government employee compensation,
the state hereby establishes a program of public pay equity,
which shall limit the annual percentage increase in average state
government employee compensation to that of private sector
employees in the state.
§29-6B-2. Definitions.
For the purpose of this article, the following definitions
apply:
(a) "Full-time equivalent employees" means a number of
employees calculated by dividing the straight time hours for work
or paid leave paid to employees divided by the number of hours
constituting full-time employment.
(b) "Public pay equity ceiling" means an amount, annually
calculated by the secretary of administration, which represents
the maximum average wages and salaries for state employees.
(c) "Wages and salaries" means gross cash amounts paid to
employees, including: pay for time worked; all paid leave,
including holidays, annual leave and sick leave; and overtime
pay.
§29-6B-3. Establishing public pay equity for state employees;
limitation of public pay rate of change to that of the
private sector; annual calculation of public pay equity
ceiling; ceiling not to be construed as an entitlement;
full-time equivalent employee assumption fixed.
(a) Notwithstanding any other provision of law, the year-to-
year annual percentage increase in average annual wages and
salaries per full-time equivalent state employee may not exceed
the annual percentage increase in average wages and salaries per
employee of the private sector in the state for the corresponding
period.
(b) The secretary of administration shall calculate, on an
annual basis, a public pay equity ceiling using a methodology
that he or she deems appropriate. The average annual employee
wages and salaries for state government in any year may not
exceed the public pay equity ceiling.
(c) The public pay equity ceiling may not be construed to
create any economic right or entitlement for state employees.
(d) For state government, the number of weekly hours used to
define a full-time equivalent employee in the first public pay
equity ceiling calculation shall be used in all subsequent annual
public pay equity ceiling calculations.
(e) By the first day of July, one thousand nine hundred
ninety-four, the secretary of administration shall prescribe a
calculation form, to be used annually thereafter, which shall
specify the numeric values necessary to calculate the amount by
which the public pay equity ceiling shall change in relation tothe previous year's average employee wages and salaries.
§29-6B-4. Reporting requirements.
(a) By the first day of July of each year, the secretary of
administration shall prepare a public pay equity report in a
format that shall include, at a minimum:
(1) For the fiscal year preceding imposition of public pay
equity:
(A) Total employee wages and salaries;
(B) Number of full-time equivalent employees; and
(C) Average annual employee wages and salaries.
(2) For the fiscal year previous to the fiscal year most
recently ended:
(A) Total employee wages and salaries;
(B) Number of full-time equivalent employees;
(C) Average annual employee wages and salaries; and
(D) Percentage change from the fiscal year preceding
imposition of public pay equity.
(3) For the fiscal year most recently ended:
(A) Total employee wages and salaries;
(B) Number of full-time equivalent employees;
(C) Average annual employee wages and salaries;
(D) Percentage change from the fiscal year preceding
imposition of public pay equity; and
(E) Percentage change from the previous fiscal year.
(b) By the first day of July of each year, the secretary of
administration shall submit a report to the governor and to theLegislature containing all of the information required by
subsection (a) of this section. Such report shall also include:
(1) For the fiscal year preceding imposition of public pay
equity:
(A) With respect to state employees:
(i) Total employee wages and salaries;
(ii) Number of full-time equivalent employees; and
(iii) Average annual employee wages and salaries.
(B) With respect to private sector employees, average
statewide private sector employees' wages and salaries.
(2) For the fiscal year previous to the fiscal year most
recently ended:
(A) With respect to state employees:
(i) Total employee wages and salaries;
(ii) Number of full-time equivalent employees;
(iii) Average annual employee wages and salaries; and
(iv) Percentage change from the fiscal year preceding
imposition of public pay equity.
(B) With respect to private sector employees:
(i) Average statewide private sector employees' wages and
salaries; and
(ii) Percentage change from the fiscal year preceding
imposition of public pay equity.
(3) For the fiscal year most recently ended:
(A) With respect to state employees:
(i) Total employee wages and salaries;
(ii) Number of full-time equivalent employees;
(iii) Average annual employee wages and salaries;
(iv) Percentage change from the fiscal year preceding
imposition of public pay equity; and
(v) Percentage change from the previous fiscal year.
(B) With respect to private sector employees:
(i) Average statewide private sector employees' wages and
salaries;
(ii) Percentage change from the fiscal year preceding the
imposition of public pay equity; and
(iii) Percentage change from the previous fiscal year.
NOTE: The purpose of this bill is to establish the public
pay equity act for state employees. The act is premised on the
finding that public employees should be paid compensation that is
influenced by competitive forces that exist in the private
sector. This finding is based on the proposition that such a
public employee compensation system will promote a more efficient
allocation of resources and that it is, therefore, in the public
interest to ensure that public employees' compensation is based
on private sector employees' compensation.
This article is new; therefore, strike-throughs and
underscoring have been omitted.