Opinion ID: 2315085
Heading Depth: 1
Heading Rank: 4

Heading: State Pay Plan

Text: The plaintiffs urge us to find that the Governor's Executive Order violated the State Pay Plan because it was inconsistent with certain procedures required by the Legislature before employees' salaries may be amended. Specifically, they claim that the Governor contravened § 27 of Article 64A by altering salaries of State employees without the legislative approval required by that statute. In this regard, the plaintiffs say that a change in the work week is a change in the salary plan, and that such a change cannot be effectuated by an Executive Order. Judge Thieme concluded that a change in the work week was not a change in the salary plan. He reasoned that, because State employees are salaried and are paid based upon the classification that they hold, a change in the number of hours worked does not alter the salary they make or the amount of money the State must pay out from the State Treasury. He said: To be sure, the net effect of working more hours for the same pay on the individual level is a decrease in hourly pay, but such a decrease in `calculated' pay is not what the pay plan procedures were implemented for. The pay plan is a budgetary creature and is concerned with the `actual' payroll. Since the pay plan is not in fact altered the procedures it requires are not at issue. As previously noted, the provisions of Article 64A, § 27(a)(1)(i) require that the Secretary recommend to the Governor a pay plan for all classified and unclassified positions for which the Secretary has authority to administer pay. The section requires that the Secretary, in making his recommendations to the Governor, consider various criteria, including working conditions, in establishing salary comparability and rates of pay; it also provides, in subparagraph (a)(1)(iv), that the Secretary, with the Governor's approval, may amend the pay plan for specific classifications of positions in order to recruit or retain competent personnel or to ensure that compensation rates adequately compensate the skills, knowledge, effort, responsibility, and working conditions. [6] Subparagraph (a)(3)(v) provides that amendments to the pay plan shall be reported to the General Assembly by the 15th day of the next regular session of the Legislature. It also provides that that body may reject amendments to the pay plan. It was stipulated by the parties that no amendments to the salary plan were reported to the General Assembly in January of 1991. It was also stipulated that employees in the 442 employment classifications in the State personnel system are paid on an annual basis; that in establishing rates of pay for these classifications in the salary plan, the hours worked by employees are not taken into consideration; and that as a consequence 40-hour employees receive the same salary as 35 1/2-hour employees working in the same classification. In its most basic form, it is the plaintiffs' argument that an increase in the hours of the work week is a working condition within the contemplation of Article 64A, § 27(a)(1)(i) which, because the increase results in a reduction of salaries, constitutes an amendment to the pay plan. Hence, they say that this criteria for establishing rates of pay had to be factored into an amended pay plan and reported to the General Assembly before it could be implemented. The fiscal year 1991 State Budget documents show that the increase in the work hours resulted in a cost-savings through the denial of additional appropriations for new positions and by reducing overtime costs. The increased hours did not cause a reduction of any salaries within the pay plan. Because there was no amendment to the pay plan, no notice to the General Assembly was required under § 27(a)(3)(v). We, therefore, share Judge Thieme's conclusion that the Governor's Executive Order did not effectuate an amendment to the State pay plan.