SUBJECT: PROVIDING SALARY AND
BENEFITS CONTINUATION FOR MILITARY RESERVISTS CALLED TO ACTIVE DUTY AS A RESULT
OF THE TERRORIST ATTACKS ON SEPTEMBER 11, 2001.
In order to provide as quickly as possible salary and benefits continuation for reservists who are called or have been called to active duty, City Council approval is recommended at the next Council meeting.
Current employees who are military reservists are eligible for their full salary for 30 calendar days per fiscal year, when engaged in specific military duty, including active military training, encampment, naval cruises, special exercises or like activity. From time to time, the Council has enhanced these benefits for reservists who are called to active duty.
As a result of the Iraq-Kuwait Crisis, in 1990 the Council adopted a Resolution allowing for City employees who were reservists and were called to active duty between September 1, 1990 and February 28, 1991, to extend their salary and benefits for 13 pay periods beyond the existing 30 calendar day policy. During that crisis, approximately 240,000 reservists were called for duty. In 1990, approximately 80 City employees were called for duty.
Because of the Kosovo conflict, in June 1999 the Council adopted a Resolution mirroring the Resolution adopted in 1990, extending salary and benefits to reservists who were called for duty between May 31, 1999 and November 27, 1999. During that conflict, approximately 33,000 reservists were called for duty. In 1999, approximately 15 City employees were called for duty. With ongoing unrest in the Kosovo region, the Council extended the November 27, 1999 end date to December 31, 2002, through a resolution earlier this year.
On September 11, 2001, an unprecedented terrorist attack on the United States brought attention to the need for a military response against terrorism worldwide. It is clear the military will summon reservists to active duty. Estimates vary widely however, on how many reservists will be called to active duty.
The recommendation would extend the same benefits the City provided to reservists resulting from the Iraq-Kuwait Crisis and the Kosovo conflict, and would expire December 31, 2002. However, the administration would review the potential for extending the time frame through a new resolution as the end date nears.
The resolution
that was extended earlier in the year provides a wide variety of benefits in
addition to salary. Key benefits,
including health, dental, and retirement, also benefit the dependents of the
employee. The Administration proposes
that this Resolution cover employees who meet the following guidelines:
1. Members of the reserves and/or National
Guard; and
2. Have one ore more years of active City
service; and
3. Are called to active duty as a result the
terrorists activities on September 11, 2001
4. Return to City employment within 60 days
after the end of active duty status; and
5. Remain as active employees for at least
six months following their return to City employment.
As in the past
resolution, employees will be required to sign an agreement detailing their
rights and obligation pursuant to these supplemental benefits prior to initial
receipt of benefits beyond the mandatory 30 days. Those who elect not to return to City service would be required
to repay the City for the cost for the supplemental salary and benefits plus
interest (at the rate earned on the City’s pooled investments) for the periods
that exceed the mandatory thirty (30) days.
This return to work requirement is consistent with the San Jose Municipal
codes sections regarding retirement contributions.
Supplemental salary
The City will
continue to provide a biweekly check in an amount equal to base salary less
military pay. The military pay will be
estimated on the basis of the employee’s military rank, years of service, and
the information on the military orders, if available. In determining the supplement, the City will also take into
account all extra pay including dependent allowances, housing, hazardous duty,
flight pay, etc. Reservists will be
required to provide copies of their military pay stubs for reconciliation
purposes. The payments will be
reconciled quarterly by the Finance Department. If the Finance Department has not received the copies within
three weeks after the end of the quarter, future checks will be held until the
information is provided.
Health Insurance
The City’s
health plans will pay benefits as the primary provider so long as the City and
employees continue to pay the premiums in the same ratio as for other active
employees. This will allow our employees
and their dependents to continue to use their current doctors and hospitals.
In addition,
the United States government provides a health plan for active military and
their dependents. Benefits include
prescription and vision coverage. If
the City continues to pay the employees’ health care premiums, the City’s plans
will pay benefits first and the federal plan will pay second, except that the
federal plan will be primary for injuries and illnesses that are suffered in
the line of duty.
Dental Coverage
The City will
continue to provide dental coverage for the employee and dependents. The United States government provides
coverage for its members and dependents dental care. If the City continues to
pay the employees’ dental care premiums, our plans will pay benefits first and
the federal plan will pay second, except that federal plan will be primary for
dental injuries suffered in the line of duty.
Life Insurance
As in the
previous resolutions, the City insurance plans will not cover employees on active
duty.
Retirement
Sections
3.28.630 and 3.36.620 of the San Jose Municipal Code provide that, following
return to active employment for active military duty, the City shall pay the
portions of the contribution rate owed by both the City and the employee. Under the proposed benefit structure, the
City and employee will continue to pay retirement contributions on the basis of
the supplemental salary. Following
return from active duty within the guidelines of Sections 3.28.630 and
3.36.620, the City will pay the retirement system the amount of City and
employee contributions that are due.
Labor Relations
The extensions
of these forms of compensation are subject to the meet and confer process under
the Meyers-Milias-Brown Act. City Labor
Organizations have been notified of this program in accordance with the
requirements of the Meyers-Milias-Brown Act.
Not applicable.
This memorandum was coordinated
with the City Attorney’s Office and the City Manager’s Budget Office.
Estimates vary on the number of potential call-ups. If we refer to the past call-ups for a potential range, we estimate that between 33,000 reservists to 250,000 reservists will be called to duty. In 1999, of the 33,000 call-ups nationwide, 15 were City employees. In 1990, of the 240,000 call-ups, 80 were City employees. Historically, military salary has been approximately 55% of City pay. The 45% of base pay and benefits for 15 employees for thirteen (13) pay periods would be approximately $219,000. The 45% of base pay and benefits for 80 employees for thirteen (13) pay periods would be approximately $1,166,000. The 2001-2002 adopted budget already provides full salary and benefits for these employees. The only additional costs would come in the form of overtime paid to cover open critical shifts of employees called to service, unless an unforeseen number of reservists are called to duty.
Alex Gurza
Director of Employee Relations