MOU Fiscal Analysis:
Bargaining Unit 18 (Psychiatric Technicians)

On August 1, 2022, our office received a proposed memorandum of understanding (MOU) between the state and Bargaining Unit 18 (Psychiatric Technicians). This analysis of the proposed agreement fulfills our statutory requirement under Section 19829.5 of the Government Code. State Bargaining Unit 18’s members are represented by the California Association of Psychiatric Technicians (CAPT). The administration has posted the agreement and a summary of the agreement and the administration’s estimated fiscal effects of the agreement on the California Department of Human Resources’ (CalHR’s) website. (Our State Workforce webpages include background information on the collective bargaining process, a description of this and other bargaining units, and our analyses of agreements proposed in the past.)

Major Provisions of Proposed Agreement

Term. The current MOU between the state and Unit 18 expired July 1, 2022. Under the Ralph C. Dills Act, provisions of an expired MOU generally remain in effect until a successor agreement is ratified. The proposed MOU would be in effect from ratification through July 1, 2025.

Salary and Pay

General Salary Increase (GSI) in 2022-23. Effective July 1, 2022, the agreement would provide all Unit 18 members a 2.5 percent pay increase. As a GSI, this pay increase would increase all steps of the pay ranges for all classifications represented by Unit 18.

Increased Pay for Top of Salary Ranges in 2023-24 and 2024-25. Effective July 1 in 2023 and again in 2024, Unit 18 members who are at the top step of their salary ranges would receive a 4 percent pay increase. This pay increase only applies to those at the top step of their pay ranges. As of December 2021, 84 percent of Unit 18 members are at the top step of their salary ranges.

Recruitment and Retention Pay Differential at State Hospitals. Effective the pay period following ratification of the agreement, the proposed MOU would provide Psychiatric Technicians and Senior Psychiatric Technicians at (1) the Atascadero State Hospital a $400 per month pay differential and (2) Coalinga, Napa, and Metropolitan State Hospitals a $200 per month pay differential. The administration’s fiscal estimates assume that this provision would be extended to employees who are excluded from the collective bargaining process and indicate that 691 employees would receive the $400 pay differential for working at Atascadero State Hospital and 1,871 employees would receive the $200 pay differential for working at one of the other facilities.

Longevity Pay Differential Phased In. Over the course of the agreement, a longevity pay differential would be phased in for employees in a licensed classification with more than 17 years of state service. Once fully phased in on July 1, 2025, eligible employees with (1) 17, 18, or 19 years of service would receive an additional 2 percent of base pay; (2) 20, 21, or 22 years of service would receive an additional 3 percent of base pay; (3) 23 or 24 years of service would receive an additional 4 percent of pay; and (4) 25 or more years of services would receive an additional 5 percent of base pay. Across the bargaining unit, the administration’s fiscal estimates indicate that roughly one-third of Unit 18 members would be eligible for this pay differential.

Payments Totaling up to $2,400—if Employed Through August 2024. The agreement would provide four payments, each up to $600, over the course of the term of the agreement. The payments would be made in January 2023, August, 2023, January 2024, and August 2024. Over the course of the agreement, employees could receive up to $2,400 from these payments. To be eligible for the full payment, employees would need to work for the six months preceding each payment and be employed by the state at the time of the payment. To be eligible for the entire $2,400, an employee would need to be employed in every pay period between July 2022 and July 2024.

Health Care Facility Retention Payment of $1,500. Upon ratification, each eligible full-time or intermittent employee would receive a one-time bonus payment of $1,500. To be eligible for the payment, employees would need to (1) have been employed from January 1, 2022 through the first day of the pay period following ratification; (2) be employed in a correctional facility, correctional health facility, state hospital, veteran’s home, or developmental service facility; and (3) have been in person providing services on-site for more than 50 percent of the time during the pandemic. The administration’s fiscal estimates indicate that almost 6,000 employees would be eligible to receive the payment after it is extended to affiliated excluded employees. Pursuant to the proposed agreement, this provision would deem the 2021 side letter between the state and Unit 18 related to Federal Funding for Essential Worker Premium Pay to be “concluded.”

Cash Value for Accumulated Personal Leave Program 2020 (PLP 2020). Through collective bargaining agreements, state employees’ pay was reduced in exchange for leave credits in 2020-21 under PLP 2020. In the event that an employee separates from state service with accumulated PLP 2020, the proposed agreement would allow employees to cash out any unused PLP 2020 credits. As of December 2021, the average Unit 18 member has 34 hours of unused PLP 2020 credits.

Allow Employees to Enroll in Voluntary Personal Leave Program (VPLP). The proposed agreement would allow employees to voluntarily participate in VPLP. Participating employees could choose to be credited with 8 hours or 16 hours of VPLP credit each month in exchange for a corresponding reduction in pay. An employee who opts into the program would need to participate in the program for at least 12 months; however, requests to cancel participation due to financial hardship could be considered on a case-by-case basis. The agreement specifies that, at the state’s discretion, unused VPLP credits can be cashed out.

Make Night Shift Pay Differentiable Included in Calculation of Pension Benefit. Under the current agreement, pay differentials received for working night shifts are not included when calculating employee pension benefits. Under the proposed agreement, the night shift pay differential would be “PERSable” and included when calculating an employee’s compensation for purposes of calculating their pension benefit.

Increase Reimbursement Rates for Mass Transit and Vanpools. The state reimburses employees for some costs related to their commute. The proposed agreement increases the amount of reimbursement that employees may receive for their costs related to mass transit and vanpools from 75 percent to 100 percent—up to the maximum monthly exclusion amount allowed by the U.S. Internal Revenue Services (IRS). In 2022, the IRS monthly exclusion for qualified transportation benefits is $280.

Active and Retiree Health Provisions

Increases State’s Flat Dollar Health Premium Contribution. In the case of 14 bargaining units, the state’s contributions towards employee health benefits are established as a percentage of health premiums so that the state’s contributions automatically change as health premiums change. For the remaining seven bargaining units—including Unit 18—the state contributes a flat dollar amount towards employee health benefits. The state’s flat dollar contribution is specified in labor agreements and does not change after an agreement expires. The state’s contribution for Unit 18 health benefits was last adjusted for 2022 premiums. The proposed agreement would adjust the flat dollar state contribution as premiums change each year for the duration of the agreement so that the state’s contribution would be up to 80 percent of an average California Public Employees’ Retirement System (CalPERS) premium cost and up to 80 percent of average CalPERS premium costs for enrolled family members—referred to as the “80/80 formula.”

Employer and Employee Contributions to Prefund Retiree Health Benefits Would Fluctuate With Changes in Normal Cost. The state and Unit 18 members currently each contribute a percentage of pay, specified in the MOU, to prefund Unit 18 retiree health benefits. Similar to provisions that have been included in MOUs for other bargaining units, the proposed agreement would allow the state and employees’ contributions to fluctuate as normal cost (as calculated as percentage of pay by the administration) fluctuates over time. The intent of the provision is that the state and employee would each contribute one-half of the actuarially determined normal cost.

Other Major Provisions

Provisions Related to Working Conditions. There are a number of provisions in the proposed agreement that are not necessarily fiscal, but point to potentially serious working condition issues that the agreement attempts to address.

• Timely and Correct Payment of Wages. There have been a number of cases—CAPT informs us hundreds of cases—over the years where Unit 18 members were not paid timely or were paid incorrect amounts. The administration indicates that it is providing new and additional training for human resources staff to address the problems. The proposed agreement also includes a number of provisions that seek to address this issue. One provision would require the administration and bargaining unit to meet within 60 days of the MOU ratification for the purpose of resolving ongoing late payment and payroll issues. Another provision would require employees to be given written notice of reasons for payroll errors and the amount of the error 15 days prior to any deductions. In addition, the agreement specifies that, at an employee’s request, human resources staff will meet with the employee to explain the issue.

• Allowing for Employee Breaks. If an employee at the California Department of Corrections and Rehabilitation (CDCR) is assigned to observe, supervise, or suicide watch an inmate, they are not allowed to leave their assigned post unless they are relieved by another employee who can provide coverage. The administration indicates that CAPT was able to demonstrate that employees are not always provided coverage, meaning they are not always allowed breaks during their shifts. CAPT informs us that this has been a longstanding issue at CDCR. The proposed agreement would require CDCR to provide coverage to allow for Unit 18 member’s 15-minute rest periods.

• Hands-On/Demonstration Crisis Intervention Training. The proposed agreement specifies that crisis intervention training for new employees may include hands-on practice/demonstration as well as written instruction. The administration informs us that the pandemic forced training online, limiting hands-on opportunities. The administration indicates that some components of the training needs to be hands-on in order to be effective. CAPT informs us that there is no hands-an component in the training given to staff at CDCR.

• Direction for Additional Duties. Employees are assigned duties in addition to their normal daily assignments. The proposed agreement specifies that employees at CDCR/California Correctional Health Care Service who are assigned additional duties can request that their lead supervisor clarify which duties take a higher priority over other duties.

State Payroll System Project Reopener. The parties agree to reopen provisions of the agreement that require changes per the California State Payroll System Project.

Administration’s Fiscal Estimates

Increases State Annual Costs by $96 Million. The administration estimates that by 2025-26, the agreement would increase state annual costs by $96.2 million ($93.6 million General Fund). This estimate includes costs associated with extending the various pay provisions to employees excluded from the collective bargaining process

LAO Comments

Agreement Identifies Recruitment and Retention Issues. Most of the agreement’s fiscal policies are geared towards creating incentives to recruit (for example, monthly pay differentials for specified state hospitals) or retain (for example, the top-step pay increase, longevity pay differential, and lump sum payments throughout the term of the agreement) employees.

Compensation Study Found Psychiatric Technicians Compensated Above Market. The most recent compensation study evaluating Unit 18 classifications was released in January 2022 and uses data from 2020. The study compares Unit 18 compensation with compensation provided by local government and private sector employers to employees with similar jobs. CalHR reports in the compensation study that state psychiatric technicians receive about 31 percent higher total compensation compared with the market average. This is significantly higher than the difference reported in the prior compensation study (using 2017 data) that found state psychiatric technicians were paid 16 percent above market.

State a Large Employer of Psychiatric Technicians. As of May 2021, the U.S. Bureau of Labor Statistics (BLS) reports that there are about 9,300 psychiatric technicians employed in the state of California. These employees work for the private sector and state or local governments. CalHR compares the state’s compensation with large private sector employers and local government employers in California. BLS estimates that there are 410 psychiatric technicians employed by private sector employers with 500 or more employees in California and 770 psychiatric technicians employed by local government statewide. There are about 7,000 full-time equivalent rank-and-file and excluded positions affiliated Unit 18. While not all of these positions are filled and not all necessarily are licensed psychiatric technicians, the state likely employs a substantial share of the psychiatric technicians in California. To the extent that most psychiatric technicians in California are employed by the state, the compensation packages provided by other employers likely are less relevant to prospective and current employees. This raises questions as to whether measures other than the compensation study should be used to assess reasonable compensation levels for Unit 18.

Despite Finding That Compensation Is Above Market, Evidence of Recruitment and Retention Challenges Remain. Although CalHR’s compensation study finds that Unit 18 is compensated above market average, a number of the provisions in the proposed agreement are framed as recruitment or retention incentives. There are some datapoints that suggest recruiting and retaining state psychiatric technicians may be difficult. In particular, the below issues suggest that, compared with the broader state civil service, psychiatric technician positions are more likely to be vacant and to have been vacated by someone voluntarily separating before they are eligible to retire.

• High and Growing Vacancy Rate. The compensation study reports that 22 percent of state psychiatric technician positions are vacant. In the previous compensation study, the vacancy rate was 16 percent. While the Unit 18 vacancy rate between the two reports increased 6 percentage points, the statewide vacancy rate (across all classifications) increased 2 percentage points (from 14 percent to 16 percent). CalHR indicates that Unit 18 has sustained a vacancy rate above the statewide average since at least 2016.

• Higher Voluntary Separation Rate Than State Average. The compensation study reports that 4 percent of psychiatric technician positions turned over due to voluntary separation from state service. That is a full percentage point higher than the statewide average. CalHR data show that voluntary separations have been the driving factor in the increase in turnover rate of Unit 18 positions between 2016 and 2021.

• Lower Retirement Rate Than State Average. According to the compensation study, about 3 percent of psychiatric technician positions turned over due to retirement. This is a percentage point lower than the statewide average turnover rate due to retirements. CalHR data show that the turnover among Unit 18 due to retirement decreased in 2021, relative to trends back to 2016. However, the administration also indicated that there might be pent up demand to retire among Unit 18 members as 15.4 percent of Unit 18 are likely to retire by 2025 compared with 12.7 percent in the broader state civil service.

• Variations in Longevity by Facility. The variation in the number of years of service among Unit 18 members across state hospital and correctional facilities shows that recruitment and retention issues likely vary by facility. For example, while more than 30 percent of the Unit 18 staff at Metropolitan, Napa, and Patton State Hospitals have more than 17 years of state service, this is true for only about 20 percent of Unit 18 staff at a correctional facility and 16 percent of Unit 18 staff at Atascadero State Hospital.

Differences in Working Conditions Possibly Reason Recruitment and Retention Issues Persist Despite Relatively High Compensation. Given the time frame of our analysis, we did not have time to delve too deeply into understanding why a recruitment and retention issue for state psychiatric technicians might persist despite the state providing a relatively generous compensation package compared to similar employees at nonstate facilities. However, there are a few factors—discussed below—that we think might play a role.

• Violence Against Staff. The vast majority of state psychiatric technicians work in a state hospital or a state correctional facility. These are facilities where patients might not be participating in treatment voluntarily (the administration reports that 87 percent of patients in state hospitals in 2019-20 were mandated there for treatment by a court) and where a small portion of the population have a very violent history. We do not have data on violence against private sector and local government psychiatric technicians; however, there is clear evidence that working as a state psychiatric technician is a dangerous job. In July 2022, the Department of State Hospitals (DSH) released a report on state hospital violence between 2010 and 2020. Only physical violence where contact was either made or attempted is included in the report—it does not reflect the number of incidences of verbal threats or abuse. The report makes clear that violence (both patient on patient and patient on staff) is common in state hospitals. The administration informs us that between January 2020 and June 2022, there were a total of 5,172 aggressive acts against Unit 18 members across the five state hospitals—this is the equivalent of nearly six aggressive acts against Unit 18 members every day across the five state hospitals during that period. In some cases, the physical violence against DSH staff leads to workers compensation claims. DSH reports that over a five-year period between July 1, 2017 and June 30, 2022, there were 1,329 workers compensation claims specific to Unit 18 due to violence against staff. During this five-year period, DSH reports 142,221 days of work were lost for Unit 18 members due to workers compensation claims. On average, the amount of work lost at DSH each year during this period was the equivalent of 136 full-time equivalent Unit 18 positions. (Physical violence against Unit 18 staff appears to be less prevalent at correctional facilities. The administration indicates that over three years, 2020 through 2022, there were 188 assaults or batteries against staff at correctional facilities.)

• Reliance on Mandatory Overtime. As we discussed in detail in our January 2020 analysis, mandatory overtime is a long-standing issue with Unit 18. Figure 2 shows that DSH has relied heavily on mandatory overtime to cover Unit 18 positions. The administration reports that its efforts to reduce its reliance on mandatory overtime at state hospitals had been successful before the pandemic (as shown by the decline in mandatory overtime hours in the three years preceding 2020-21); however, the pandemic’s effects on DSH’s systems and increased staff absences resulted in mandatory overtime increasing significantly beginning in 2020. At CDCR, it appears that the reliance on mandatory overtime also persists, with the administration reporting using more than 40,000 hours of mandatory overtime each year since 2018.

Going Forward, Recruitment and Retention Challenges Could Worsen. The Employment Development Department (EDD) finds that the job outlook for psychiatric technicians shows an increase in demand for the job. Among the reasons it expects growth in the job is that the population is aging and will require increased mental health care for illnesses such as dementia and related diseases. In California, EDD expects demand for the job to increase nearly 9 percent between 2018 and 2028, a rate that EDD indicates is average compared with other occupations. Given the state’s existing recruitment challenges, increased demand from private and local government employers could further hamper the state’s ability to fill these positions.

Pay Increases Might Not Keep Pace With Inflation. The proposed agreement would increase pay for Unit 18 members who are at the top step of their pay range by a compounded 10.9 percent over the term of the agreement. Inflation has accelerated recently, with prices increasing close to 9 percent over the last year. The consensus among economic forecasts is that inflation will moderate over the next year. However, where inflation is headed over the term of the agreement is unknown. Persistently high inflation over the term of the agreement could significantly weaken the purchasing power of Unit 18 members—especially those who are not at the top step and would no receive salary increases under the proposed agreements.

Term of Agreement Longer Than We Recommend. In 2007, we recommended that the Legislature only approve tentative agreements that have a term of no more than two years. With a term of three years, the proposed agreement is longer than our recommended term.

Issues for Legislative Consideration

Interaction of Agreement and Administration’s Efforts to Reduce Use of Mandatory Overtime. Before the pandemic, DSH had reduced its reliance on mandatory overtime. The pandemic has created staffing disruptions resulting in significant growth in the department’s reliance on mandatory overtime. Depending on how many employees enroll in VPLP established by the proposed agreement, DSH staffing challenges could persist. The Legislature may wish to ask DSH how it plans to address the use of mandatory overtime going forward.

Recruitment and Retention Issues of Unit 18 Positions and Reasonable Compensation Levels. Because the state employs such a large share of psychiatric technicians, the compensation study, as currently designed, likely is not the most helpful tool in determining a reasonable level of compensation for Unit 18. The Legislature may wish to better understand the issues that contribute to the recruitment and retention challenges of psychiatric technicians and to understand what factors it should consider when determining if the proposed agreement provides a reasonable level of compensation to address those challenges, especially in the context of rising inflation, the pandemic, and dangerous working conditions.