Report 2008-107 Summary - April 2009

Temporary Workers in Local Government

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Although Some Workers Have Limited Opportunities, Most Have Reasonable Access to Permanent Employment and Earn the Same Wage Rates as Permanent Workers

HIGHLIGHTS

Our review of the use of temporary employees in four counties and two cities revealed the following:

RESULTS IN BRIEF

Concerns regarding the number of temporary employees hired by general law1 local governments, whether temporary employees were doing work that was actually long-term work and were, therefore, misclassified, and whether temporary employees had reasonable opportunities to become permanent employees prompted this audit. All six of the local governments we reviewed use permanent and temporary workers, but they classify these workers using a variety of terms, such as provisional, casual, and regular. As we use the terms in this report, temporary workers are defined as at-will employees, that is, employees who may be terminated by their employer at any time with or without cause, and permanent workers are defined as those who are not employed on an at-will basis. We reviewed the use of temporary employees in the counties of Contra Costa, Kern, Riverside, and San Joaquin and the cities of Escondido and Fremont.

Using payroll data for 2003 through 2007 from four of the six entities included in our review, the city of Escondido (Escondido), Kern County (Kern), Riverside County (Riverside), and San Joaquin County2 (San Joaquin), we analyzed 78 job classifications to determine whether temporary employees without benefits (temporary employees) had reasonable opportunities to secure employment with permanent status or benefits (permanent jobs) and the extent to which they did so. These 78 job classifications contained the greatest numbers of temporary employees between 2003 and 2007 in the four local governments. We found that temporary employees in only 11 of the 78 job classifications (14 percent) appeared to have limited opportunities to move to permanent jobs and, further, that the local governments using these 11 classifications had reasonable explanations for employing primarily temporary workers in these instances. The remaining job classifications either constituted true temporary jobs that generally lasted for a relatively short time, were per diem (paid by the day) classifications in which most employees worked on a temporary basis by choice, or were classifications for which the temporary employees in them appeared to have good opportunities to get permanent jobs.

During our review of the 78 job classifications, we found that Escondido was not appropriately monitoring the use of a temporary job classification, department specialist, that does not have a set upper limit on its wage rate. Before February 2008 city departments were not required to have city manager approval to use the department specialist classification. In the two instances in which the city manager approved the use of this classification since February 2008, it was not clear from available documentation why regular city job classifications were not used instead of the department specialist or why the requested $60 per hour salary levels for the two employees were approved. Although the city has general written guidance applicable to all part-time job classifications, including the department specialist, it has not developed written guidance concerning when to use the department specialist classification or how to determine the hourly wage rates paid to department specialists.

All six local governments we reviewed have limits on how long temporary workers may work. Five of the six had temporary workers who exceeded their government's established time limits for temporary employees over various periods during 2006 and 2007. The city of Fremont (Fremont), Escondido, and San Joaquin had relatively few workers who exceeded applicable time limits, and Kern had none, while 113 employees in Contra Costa County (Contra Costa) and 492 employees in Riverside appeared to exceed applicable limits.

For Riverside, we selected a sample of 39 temporary employees who appeared to have exceeded the county's 1,000-hour time limit for temporary workers and found that 19 were approved to work 1,000 hours over the 1,000-hour limit, or up to 2,000 hours. However, two of the 19 employees worked more than 2,000 hours, thereby exceeding the number of hours they were authorized to work. Of the remaining 20 Riverside temporary employees, 18 were actually employees in the county's on-call per diem medical registry who were classified in fiscal year 2006-07 as temporary assistants, according to Riverside. As per diem employees, they were not subject to the 1,000-hour limit. The remaining two temporary employees worked over the 1,000-hour limit without authorization. Similarly, for a sample of 15 temporary employees in Contra Costa who worked more than the county's one-year time limit for temporary employees, the county asserted that 14 of the employees may have been approved to exceed the limit. However, the county was unable to provide evidence to support its statement that the employees had been approved to do so because it does not require that such authorizations be in writing.

Although we did not conduct a detailed analysis of temporary job classifications in Fremont or Contra Costa, we did note that Contra Costa formed a committee in 2006 consisting of certain county management employees and representatives of employee organizations to review issues pertaining to temporary workers. The committee submitted a report with recommendations to the county board of supervisors (board) in August 2008 suggesting that the county did not always limit its use of temporary employees to positions required to fill its short-term workload needs and that the county sometimes replaced a temporary worker who had reached the limit on the allowable number of hours in a given job classification with another temporary employee. According to the director of human resources, as of late March 2009, negotiations with a coalition of labor unions were ongoing to reach a final resolution regarding the committee's recommendations.

We also found that the proportion of temporary workers in the cities we reviewed was higher than in the counties. The two cities we reviewed, Escondido and Fremont, had the highest percentages of temporary employees in 2007—52.4 percent and 34.9 percent, respectively—while Riverside had the lowest percentage, at 16.1 percent. Temporary employees in the counties also secured permanent jobs with their government entities at a higher rate than temporary employees in the cities. Among the six local governments included in our review, Riverside had the highest percentage, 37.9 percent, of temporary employees secure permanent jobs between 2003 and 2007.

Further, the temporary employees of the six local governments we reviewed, with one of the two types of temporary employees in Kern being the exception, generally do not receive employer-sponsored benefits or receive very few of these benefits until they have worked at least 1,000 hours. In contrast, most permanent workers and at-will management employees receive employer-sponsored benefits, the most common being retirement, health, dental, vision, vacation, sick leave, and paid holidays.

The hourly wages of temporary workers in the six cities and counties we reviewed were frequently the same as the wages of comparable permanent workers. In Escondido, Fremont, Kern, and San Joaquin, temporary and permanent workers in the same job classification were paid the same wage rate. In Riverside and Contra Costa, temporary workers generally are paid hourly wages at the first step in the pay scale of their job classification and, except for temporary workers of Contra Costa represented by two employee organizations, they do not have the opportunity for pay increases. In addition, temporary workers in Riverside's Temporary Assignment Program (TAP) generally earn hourly wages that are 5.5 percent less than the first step of the pay scale of employees in comparable county classifications. However, according to county officials, TAP employees actually take home more money than their permanent counterparts because they are not covered by the federal Social Security program and therefore do not pay Social Security taxes, and they have different and less costly retirement benefits than permanent workers. We also noted that per diem workers in the counties typically earn higher wages than their permanent counterparts, although they do not receive the benefits that permanent employees receive.

We surveyed 594 temporary workers from the six local governments and received 230 responses. The results of our survey indicate that respondents to our survey from the cities were more likely than respondents from the counties to be temporary employees by their own choice and less likely to have applied for permanent jobs with their local government employers. In Kern, Riverside, Contra Costa, and San Joaquin counties, 36 percent of those who responded to the survey indicated that they chose to be temporary workers rather than permanent workers, and of the 138 respondents, 37 percent stated that they had remained temporary workers from our audit period until the time they responded to our survey. In contrast, 74 percent of the temporary workers from the cities of Escondido and Fremont who responded indicated that they chose that status, and of the 92 respondents, 57 percent remain as temporary workers. Moreover, among the survey respondents, 62 percent of the county temporary workers indicated that they had taken examinations required to get a permanent position, compared to 21 percent of the temporary workers employed by the cities. In addition, 60 percent of the county workers responding indicated that they had applied for specific permanent jobs with their local governments, compared to 21 percent of the temporary workers employed by the cities.

RECOMMENDATIONS

To help ensure that its department specialist job classification is used consistently and appropriately, Escondido's human resources department should ensure decisions to use the classification, including the salary level for each position, are approved and fully documented.

To address issues identified by the joint management-labor committee created to review Contra Costa's use of temporary employees, the county should continue negotiations with employee organizations to reach resolution regarding the committee's recommendations.

To ensure that their temporary employees do not work beyond prescribed time limits without authorization, Contra Costa and Riverside should improve their processes for identifying workers approaching the limits and, along with San Joaquin, document requests and approvals for workers to exceed the limits.

AGENCY COMMENTS

All six of the local governments agreed with the information in the report. The four local governments to which we addressed recommendations concurred with our recommendations and plan to implement them.

1 The California Constitution authorizes two types of local governments: those governed by the State's general law and those with charters. Cities and counties with charters generally have more autonomy in managing their employees than do general law cities and counties.

2 Data for San Joaquin County were available only for pay periods ending between October 2003 and December 2007.