Management at State Compensation Insurance Fund has had to deliver bad news to its nearly 8,000 employees informing them that Governor Arnold Schwarzenegger’s mandated furloughs apply to SCIF employees. An email from management on behalf of Janet Frank confirms that SCIF will be rotating its furlough days, so it can stay open five days a week.
Despite points for SCIF management at trying to secure an exemption, even staggered days off may not maintain efficiency or help the state’s economy. And injured workers may be waiting just as long for workers’ compensation benefits as fewer claims adjusters try to juggle the same number of claims five days a week. Some of the more risky policy holders will get held up on new accounts and renewals.
Furloughs, regardless of when they’re taken, will also add to the budget woes. SCIF is not funded by premium and not the General Fund, but it’s employees pay payroll taxes. Two days of unpaid leave will decrease that revenue. It’s also inevitable that vendors with business near SCIF locations such as gas stations and lunch destinations will see a decline in business as a result.
SCIF management was still unable to secure an exemption. An email went out to all SCIF employees on behalf of President Janet Frank updating the rank & file on the furlough situation. Here is a copy of that email.
“I am very disappointed to report that we were unable to reach an agreement that would exempt State Fund from the Executive Furlough Order. After lengthy negotiations, we received final word late last night that our requests were denied. At this point the Department of Personnel Administration has instructed us to move forward with implementing a two-day per month furlough. I know that this is unwelcome news and I understand the impact this has on everyone. I want you to know that our Board of Directors, State Fund Management and I all worked hard to get State Fund exempted from these furloughs, understanding that our participation does not ease the State's economic crisis. In the end, however, the economic crisis overshadowed our negotiations.
I want to thank everyone for their support and patience during this extremely challenging time. Human Resources will be providing details on how the furlough program will work… but I can tell you that State Fund will remain open during normal business hours and we will be rotating our furlough leave. And while we will move forward with this furlough program, we will continue to fight for what is best for State Fund's employees and customers, and for California..
State Fund is a strong and stable provider of workers' compensation insurance and a vital asset to California businesses. We have a long history of weathering economic challenges. I have confidence that we will do so this time. Thank you again for your hard work and dedication.”
SCIF adjusts the claims for all the state agencies and functions as the carrier of last resort. As reported by Workers’ Comp Executive last week, state agencies could choose to furlough all employees on the first and third Fridays or stagger furlough days and keep operating. Rotating furlough days may not slow down business at SCIF as much as closing shop twice a month, but with fewer people working the same number of days, claims adjusting will slow down enough that deadlines will be missed, fines will increase, and benefits to injured workers’ will be held up.
Still, human resources consultant Dale Little says this step is still preferable to mass layoffs. Depending on the type of agency, customers are already daunted or inconvenienced by the service, so they’ll find excuses to go around it. By rotating employees at least someone is in the office.
“If we’re not functioning then we’re not serving our customers. We’ve got to think about who’s coming through our doors,” Little says, adding that rather than have 10 people off on Friday, it makes more sense to have two people off each day of the week.
In regard to an agency like SCIF, she says there can be a trickle down impact, especially for injured workers. “There are the emotional effects. If their benefits are held up, then there is an impact on their overall contribution to the economic community,” Little says. “If they can’t work, and they’re not getting their money, they can’t buy groceries, even if it’s just the basics.”
Little says it’s important to empower employees, so they feel like they’re part of the decision.
SCIF management told WCE last week it was still in the throes of negotiations with the Department of Personnel Administration to possibly secure an exemption to the furlough. According to an email sent to employees, SCIF was working diligently to get SCIF’s status per the furlough. In response to WCE’s flash report several employees sent emails saying they had never been kept in the loop on management’s efforts, despite the fact that the email was supposedly sent to “all employees.”
“This is categorically wrong you can ask anyone here. We (rank & file) have not been kept in the loop,” one response reads.
According to an email Q&A sent out by SCIF spokeswoman Jennifer Vargen, SCIF management is going to continue to press its case with the governor. Vargen also says management’s request to reimburse SCIF employees for the furlough days was denied.
“The money saved will remain with State Fund…Ultimately the Department of Personnel Administration has jurisdiction over all employee compensation. We are currently evaluating the situation and no decisions have been made about how this money might be used,” Vargen’s email says.
Until the governor and the Legislature arrive at a budget deal, SCIF is stuck in the same boat as all the other state employees. Even if SCIF stays open five days a week, it remains to be seen whether claims adjusters will be able to keep on top of the workload and benefits continue to flow.
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