Squeazing Every Last Drop

http://www.azcentral.com/story/news/local/phoenix/2015/05/14/phoenix-firefighters-get-back-pay/27284081/

Phoenix firefighters to get $2.5 million in back pay

The Republic – May 13, 2015

Story Highlights

  • Nearly 200 firefighters will get $2.5 million in back pay
  • The city put some firefighters at incorrect salary levels during recession-era budget cuts
  • Payouts range from $249 to more than $19,400
  • The United Phoenix Firefighters Local 493 union began an investigation

Nearly 200 Phoenix firefighters will get $2.5 million in back wages to correct a payroll error that resulted in underpayment for as many as four years.

The Phoenix City Council voted unanimously Wednesday to spend the money, allowing the city to close the book on missteps that started in July 2010 during recession-era budget cuts. Human Resources Department employees had failed to adjust some employees’ salaries to match changes in the fire union’s contract, according to a city memo.

City leaders have widely panned the mistake, saying it should have been caught and corrected years earlier. One longtime councilwoman said she has never seen a personnel mix-up of this magnitude at City Hall.

Phoenix recently signed settlement agreements with the firefighters who were underpaid, allowing the city to avoid potentially costly litigation. Affected employees have received lump-sum checks, ranging from $249 to more than $19,400.

PREVIOUSLY: Phoenix underpaid 192 firefighters for up to 4 years

Fire union President Steve Beuerlein said while some of his members were frustrated by the delay and discussed filing lawsuits, the union convinced them to work with the city so the dispute could be resolved more quickly and without additional costs.

“It’s been over a year and a half that we’ve been working on this and we’re definitely relieved that it’s behind us,” he said. “That’s an understatement. They’ve assured us that they’ve taken the steps and they’re prepared to make sure it doesn’t happen again.”

The problem went unnoticed until two firefighters compared their paychecks in mid-2013, Beuerlein said. They noticed that one of the men was paid more even though they had been hired around the same time.

After that, leaders of the United Phoenix Firefighters Local 493 began an investigation. City officials initially told them there wasn’t a problem, but both sides soon realized widespread payroll errors had occurred, human-resource records show.

The firefighters filed a labor grievance last summer after the issue went unresolved for nearly a year. Beuerlein has said the firefighters could have sued for up to triple damages.

City officials said the mix-up happened when the city reduced the number of pay grades and changed the amount of time between raises for firefighters who were early in their careers. Because the changes weren’t implemented correctly, some employees were placed at a wrong salary level.

WHAT PHOENIX FIREFIGHTERS MAKE IN BASE SALARY

Like many government agencies or companies with unions, Phoenix has a “step-pay” system that allows nearly every employee to get a set raise every year. The salary ladder includes up to 10 steps, and employees generally start receiving a “longevity” bonus instead of a raise once they’ve reached the top step for their position.

Phoenix employees who are hired at the same time for the same position often earn the same salary for the bulk of their careers because of this pay system.

Councilman Jim Waring, who had been undecided on whether he would support the settlement, ultimately voted in favor. He said city officials haven’t given a clear enough explanation of how the problem occurred, but he doesn’t want to punish firefighters for a mistake that wasn’t theirs.

“We owe them the money, so that’s kind of a no-brainer,” Waring said. “It’s frustrating. No doubt about it.”

Acting Human Resources Director Cindy Bezaury, who came to Phoenix in late 2013, has said the error happened when the city was “trying to survive an economic disaster” and making all of its employee unions take cuts. The department has a new executive leadership team due largely to retirements.

“I can understand why it was missed at that particular point,” she said in March. “A great deal of change was taking place. They were trying to track and monitor that.”

Despite the scope of the settlement, it won’t have an impact on Phoenix’s budget because it’s being paid out of the city’s risk-management fund, a pool of money used to protect the city from lawsuits and claims, Bezaury said.

The $2.5 million expense is in addition to about $58,000 in settlements the city paid out in late 2014 and early 2015, making the firefighters whole since the start of the fiscal year on July 1. Phoenix put all of the firefighters on the correct pay steps last fall.

Bezaury said fixing the problem took so long because of the complicated payroll math that needed to be done for each employee. The city had to account for each employee’s overtime pay, pension payments and other factors.

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