Agenda - Council Work Session - 06/22/2021

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CC Work Session 2.3. Meeting Date: 06/22/2021 Information Title: Discussion Regarding Non -union Compensation Purpose/Background: The purpose of this discussion is to update the City Council regarding important and time sensitive matters regarding non -union employee compensation. Of the City's 97 employees (full-time and part-time), 27 employees are non -union, including department heads, confidential employees and supervisors. Of the 27 positions, there is just one employee per position (unlike Police Officers, for example). Many of the City's non -union positions are currently shown to be under the average market pay based on similarly sized cities in the metro area. Moreover, there are seven non -union female employees that were shown on the Pay Equity Report to be below the predicted pay level (as determined by the Department of Management and Budget - Pay Equity Division) for their positions. This issue must be corrected in order to avoid penalties. The date by which a new report must be submitted is August 7, 2021, and the adjustments must be effective on 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. It should be noted that 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 will be the focus of this evenings discussions 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. Timeframe: Based on discussion. Funding Source: The 2021 funding required for this action is $10,651 and would be applied to the Contingency Fund.