State of California M E M O R A N D U M Date: February 1, 1993 Reference Code: 93-12 To: PERSONNEL MANAGEMENT LIAISONS THIS MEMORANDUM SHOULD BE DISTRIBUTED TO: Labor Relations Officers Personnel Officers SROA Coordinators From: Department of Personnel Administration Classification and Compensation Division Subject: Staffing Reductions and the State Restriction of Appointments (SROA) Program in 1993-94 The State economy has not yet shown signs of improvement, as revenues are lagging far behind projections; therefore, it appears that staffing reductions will continue to be one of the primary concerns of General Fund departments. The Department of Personnel Administration (DPA), therefore, wishes to stress the importance of timely, thorough planning for reducing staffing levels, and to remind you of important steps in the process. The Department of Finance has announced that most General Fund departments are being required to reduce their State operations by 15% for 1993-94. The reductions must be permanent and cannot include one-time savings, such as deferring the purchase of equipment, which confirms our impression that staffing reductions will undoubtedly be implemented by most departments to enable them to comply with the Governor's directive. Layoff alternatives, such as the SROA Program, the Early Retirement Program (ERP), and hiring freezes, averted the need for massive layoffs during the 1991-92 and 1992-93 budget reductions. Over 4,000 employees were moved by means of the SROA Program from surplus to nonsurplus jobs, nearly 800 employ- ees participated in the ERP, and numerous positions were kept vacant for salary savings and were later abolished. These and other efforts eliminated the need for all but 160 layoffs. The abolishment of numerous positions during the previous budget reductions will place much of the burden on reduc- ing positions that are currently filled. This will test the capabilities of layoff alternatives, such as the SROA Program, to once again eliminate the need for large numbers of layoffs. The Department of Finance is requiring departments to submit their plans to reduce State operations no later than Friday, February 19, 1993. Layoffs may take as long as six to 12 months to complete if they are extensive; therefore, it is essential that budget reduction planning includes planning how staff reductions will be accomplished, and whether layoffs will be necessary. PLANNING FOR STAFFING REDUCTIONS. This planning should be accomplished at the time departments are developing the plans required by the Department of Finance, or shortly thereafter. Contact should be made with the Classifica- tion and Compensation Division (CCD) Analysts at DPA as soon as possible for assistance. The following list contains some of the steps that should be included in the planning and implementation of staffing reductions. Additional information is contained in the Layoff and SROA Manuals. 1. Identify the specific positions that are to be eliminated, and deter- mine if it will be necessary to conduct layoffs. (Are positions vacant or filled? Can transfers be made to nonsurplus positions? Are employees interested in reduced worktime?) 2. Identify the area of layoff. Decisions made regarding the area of layoff are probably the most sensitive, critical ones in the layoff process because they determine (1) which employees will be included in the layoff process; and (2) the rights of employees who are adversely impacted by the layoff. For example, the decision to conduct a layoff on a statewide or geographic basis, and include only certain classes determines which employees may be adversely impacted. Also, decisions regarding demotional patterns, including personal demotional patterns, greatly impact employees' opportunities and rights to demote in-lieu-of layoff. The area of layoff includes the classes in which layoffs will occur, the number of positions, the primary and secondary demotional patterns (including personal demotional rights), and the geographic area. 3. Implement a hiring freeze on all affected classes and those that can provide placement opportunities. 4. Prior to submitting requests for seniority scores, ensure that all dates and hours of intermittent service are entered into affected employees' work histories. (Refer to PML 92-69.) 5. Prior to submitting requests for seniority scores, survey all affected employees to determine if prior service has been credited to them. (Refer to PML 92-69.) 6. Meet with DPA for approval of the layoff plan, including the area of layoff, the inclusion of appropriate employees on SROA lists, and the computation of seniority scores. (Refer to Section III of the SROA Manual to determine eligibility for placement on SROA lists.) 7. Survey employees, if not done at time of employment, to identify qualifying military service. SROA PROGRAM. As indicated, the SROA Program moved over 4,000 employees from surplus to nonsurplus positions between July 1, 1991 and December 31, 1992. In 1991, there were over 10,000 names on SROA lists, and this figure could be surpassed during 1993-94. Cooperation of departments undergoing staffing reductions and those that are hiring will be essential to avert the need to lay off large numbers of State civil service employees. The following are some reminders to departments that are reducing staff and those that are hiring staff regarding the SROA Program. 1. Departments that are reducing staff should remember that only those employees actually in jeopardy of job loss should be placed on SROA lists. (Refer to SROA Manual Section III.B.2. for the formula that is normally used to determine the number of employees who are to be placed on SROA lists.) This is essential to the success of the SROA Program because it ensures that employees on SROA lists are seriously looking for new employment and are not merely shopping for the "perfect" jobs. Flooding the lists with senior employees, whose jobs are not in danger, frustrates hiring departments that conduct interviews, offer jobs, and are repeatedly turned down. 2. Departments that are hiring staff should intensify their efforts to hire surplus employees, and should limit exemptions. The largest number of exemption requests submitted to DPA involve job/person matches that departments feel are not appropriate. DPA will keep the approval of exemption requests to a minimum, particularly job/person matches where the job and person are in the same class. 3. Departments that are hiring staff are requested, to the extent possible, to delay hires into nonsurplus classes until General Fund departments complete their planning for budget reductions. We antic- ipate that new classes will be added to those on SROA lists at that time. AUDITOR GENERAL EMPLOYEES. Departments are reminded that the State Personnel Board announced in its memorandum of November 18, 1992, addressed to "All Personnel Officers", that employees of the Auditor General's Office, whose names are on promotional lists, will remain on the lists for the lives of the lists. You should also remember that these employees are treated the same as surplus civil service employees relative to the SROA Program. Questions regarding planning for staffing reductions should be directed to your department's CCD Analyst at DPA. Questions specific to the SROA Program should be directed to Phyllis Bonilla, who has replaced Beverly Chan. If Phyllis is unavailable, please contact Joe Broderick, who has replaced Jerri Martin as supervisor of the SROA Unit. Phyllis and Joe may be reached at (916) 324-0439 or CALNET 454-0439. Mike Vargas Staffing Reduction Coordinator