Discussion Regarding Non-union Compensation

The purpose of this discussion is to provide the City Council with a brief update regarding certain non-union wage scale adjustments. 

As the Council will recall, this case was discussed at the June 22, 2021,Council work session.  Specifically discussed were seven female non-union employees that were shown on the Pay Equity Report to be below their position's predicted pay level (as determined by the Department of Management and Budget - Pay Equity Division).  Staff explained the need to correct the disparity in order to avoid penalties of $100 per day, retroactive to January 1, 2021.  Due to the lack of time to fully address this issue at the work session, staff did not move ahead with adjusting the seven wage scales or submitting the new report to Pay Equity.  However, since that time, staff was able to follow-up with indivual Council members and address any outstanding questions.

A case and resolution is on this evening's agenda requesting authorization to adjust the wage scales for the seven positions as shown on the attachment and to submit a compliant Pay Equity report to the Department of Management and Budget with a passing underpayment  ratio of 80.3245 (a number greater than 80 is passing).   The seven positions include the following:  Administrative Services Director, Assistant Finance Director, Senior Planner, Police Department Office Supervisor, Accountant II, Deputy City Clerk and the HR Generalist.    

If approved, staff will submit the compliant Pay Equity report prior to the deadline of August 7, 2021, and the wage adjustments will be made retroactively to July 7, 2021.

The attached spreadsheet shows the seven positions, the current pay scale, the proposed pay scale, and other details.  Each employee would be placed in the lowest step that represented an amount greater than their current pay.  Each employee (if they are still in their steps) would  move to the next step in one year.  Staff will be prepared to answer all questions during the meeting.  

As previously mentioned, there are non-union male employees in the same situation; however, the male occupied positions are not linked to compliance with Pay Equity.  Correcting the pay scales on the seven female occupied positions is the focus at this time and the positions occupied by male non-union employees should be included in the upcoming budget discussions.  

As background, the law requires each local government to analyze its pay structure for evidence of inequities, and to report this information to the Department of Management and Budget every three years. Most Minnesota cities are also subject to the Equal Pay for Equal Work Law, which is a different law from the Pay Equity Act but also prohibits discrimination in pay based on sex. Pay equity is designed to address the problem of a wage structure in which there is one pay pattern for jobs performed mostly by men and another pay pattern for jobs performed mostly by women. 
 
The City’s 2021 pay equity report shows that the City is currently out of compliance with the Local Government Pay Equity Act.  The report includes four tests:  the completeness and accuracy test, the statistical analysis test, the salary range test and exceptional service pay test.  Of the four tests, one test (statistical analysis) is noncompliant with a score of  62.06896 which required a minimum score of 80.  By adjusting the wage scales upward on the seven non-union female occupied positions, staff feels the City will receive a passing or compliant Pay Equity score and no penalties will occur, contingent upon approval and submittal of the new wage scales.  

Up to 5 minutes. 

The 2021 funding estimated for this action, effective July 7, 2021 is estimated to be $10,303 and would be applied to the Contingency Fund.  

Colleen Lasher, Administrative Services Director and Kurt Ulrich, City Administrator

Based on discussion.  A case is on this evenings agenda for approval.