Career Service System & HB 104

UPEA was instrumental in establishing Utah’s Career Service System in 1965. Merit-based employment is vital to most categories of state workers because it prevents a “spoils system” under which politicians award government jobs as political favors and fire employees as political retribution.  Utah’s Career Service System ensures a stable, high-quality workforce that operates equitably and free of political coercion.

Utah’s career service system, also known as the merit system, protects the jobs of nearly two-thirds of state employees by guaranteeing rights of due process and equality in the workplace. The system guarantees fair compensation, retention based on performance, and access to a speedy grievance process. Dismantling or altering the career service system changes employment status to at-will and removes these protections.. At-will status means an agency can dismiss an employee without warning as long as the termination did not violate state or federal law.

During the third week of the 2021 Legislative Session, Representative Kay Christofferson (R-Lehi) released House Bill 280, State Employee Amendments, without prior communication with UPEA. The bill sought to transition any position responsible for supervising one or more employee(s) to the newly created Schedule AX (at-will) status. If the original bill had passed, existing employees in the affected positions had until May 5, 2021 to either maintain their career service status (Schedule B) or convert to career service exempt status (Schedule AX). 

Shortly after HB 280 was made public, UPEA came out in opposition to the bill. Lobbyists spoke with legislative leadership and representatives from the governor’s office to express their concerns regarding the negative impact this legislation would have on state employees. 

Before the session concluded, the sponsor drafted a substitute bill creating a task force of stakeholders to discuss state employee issues, including performance management, pay-for-performance, employee retention/turnover, and the career service system. UPEA was included in this task force along with members of the legislature, the governor’s staff, and other interested parties. UPEA supported the first substitute, however, there was not enough time for the bill to be heard or substituted before the end of the session.

During the 2021 interim, Rep. Christofferson created a work group which included representatives from DHRM, the State Auditor’s Office, the Governor’s Office, and UPEA. Over the course of the interim, UPEA staff met numerous times with all of the various stakeholders. In one of these meetings, Representative Christofferson stated his motivation for transitioning state employees to Schedule AX status is to “modernize the workforce” and eliminate poor performers that he believes agencies are unable to terminate. This comment spurred UPEA to create an internal task force to talk directly to members about what modernizing the state workforce looks like to them. 

UPEA’S INTERNAL TASKFORCE

UPEA’s internal task force convened to discuss and research state employee career service status, performance management, compensation, and the grievance process. The UPEA task force outlined their meeting process and recommendations regarding the following items:

• Hiring and Promotion Process
• Performance Management
• Grievance Process and Corrective Action

Click here to review UPEA’s  task force recommendations. 

UPEA brought these findings to the stakeholder work group with the hopes of drafting a new, public employee friendly bill. Rep. Christofferson adopted many of the recommendations from the task force; however, he was not willing to remove the portion of the bill that transitioned supervisors to Schedule AX.

COMMUNICATION WITH THE GOVERNOR’S OFFICE

The UPEA State Board of Directors expressed concerns about eliminating career service protections for supervisors. On September 15, 2021, the State Board sent a letter to Governor Cox asking for his position regarding at-will and career service employment.  The letter to Governor Cox also stated, “These protections are in place to protect against political influence, safeguard fair hiring and termination practices, and preserve an employee’s ability to grieve an adverse job action.”

The governor’s office replied to the letter, stating that Governor Cox “understands that these discussions are central in the lives of many thousands of employees working on behalf of Team Utah and wants to communicate that our administration will continue to work alongside [UPEA] collaboratively and in good faith.  We know that the work being done is helping to modernize our workforce and deliver a strong employee value proposition to our workforce. As this bill develops and the conversation continues, our senior representatives will carry forth the governor’s collaborative spirit, making sure to keep us apprised of developments continuously.” This response, and Governor Cox’s $6 million budget recommendation to incentivize supervisors opting into schedule AX, confirmed the administration’s intent to support H.B. 104. 

SPONSOR MEETS WITH UPEA STATE BOARD

Rep. Christofferson and members of the workgroup offered to meet with the State Board. This meeting took place at the UPEA office on October 7, 2021. Rep. Christofferson stated he would like to run legislation for supervisors to have the option of moving from Schedule B (career service) to Schedule AX (at-will).  The option would be a voluntary election for current supervisors – new supervisors would be hired solely as Schedule AX employees. 

The UPEA board expressed concern on eroding the career service system and committed to continue working on the bill to protect due process rights. – check with Angie to see what the board decided.

In November 2021, the Office of the Legislative Auditor General released An In-Depth Follow-Up of the State’s Career Service System. The audit was a follow-up to an audit done in 2010 and addressed the lack of training for supervisors and recommendations from the previous audit were not fully implemented or considered. The audit revealed private entities and other at-will states have guardrails in place to provide protections and processes for their at-will employees.

House Bill 104 aimed to make all supervisory positions at-will through attrition and incentivizing current employees to forfeit their schedule B status for a 5% salary increase before FY23. The bill defined supervisors as anyone who administers a performance evaluation. The bill also included updates to the performance management software, created mandatory training for managers, established a system for performance based pay and streamlined the grievance process. 

UPEA POSITION

UPEA met with the sponsor of the bill, DHRM, and other stakeholders to voice concern over exempting specific employees from the career service system. In good faith, UPEA proposed substitute language to include limited guardrails in state code for schedule AX employees facing termination.

Rep. Christofferson rejected the proposed language and refused to substitute the bill. Following the sponsor’s decision, the UPEA State Board released a formal statement opposing HB 104. In addition, the UPEA state board prompted immediate action against HB 104, urging employees to contact members of the House Government Operations Committee about UPEA’s position, and their concerns as state employees, before the bill’s first hearing on January 26. 

The morning of the bill’s first hearing, Rep. Christofferson proposed a substitute for consideration and adoption by the House Government Operations Committee later that day. The substitute sought to transition all state employees to at-will status and limit eligibility for the pay-for-performance program to at-will employees. Once again, UPEA lobbyists took immediate action; contacting committee members and pulling them off the house floor to discuss the drastic changes presented in the substitute.

Rep. Christofferson presented 1st Substitute House Bill 104 in the House Government Operations Committee only hours later. The Executive Director of DHRM, the State Auditor, and Governor’s Chief Innovation Officer spoke in favor of the first substitute, stating that the transition to at-will employment will “modernize the workforce.” While discussing the substitute bill, many legislators acknowledged the numerous emails they received from state employees and UPEA members expressing their concerns regarding the substitute bill and the importance of the career service system as a whole.

UPEA lobbyist, Kory Holdaway, testified against the substitute bill, expressing frustration at the last-minute diversion from the original bill and the sponsor’s unwillingness to collaborate on language. The committee did not adopt the proposed substitute bill. After discussing the original bill, the Government Operations Committee passed out HB 104 with a favorable recommendation by a vote of 7-3.

Following the favorable recommendation by the House Government Operations Standing Committee, UPEA met with Rep. Christofferson to insert language to safeguard supervisors who elect at-will status (AX) or are hired into a supervisor position after July 1, 2022. Second sub HB 104 includes language that allows each agency to create their own appeal process for at-will employees. The UPEA State Board voted to support the bill after the sponsor accepted the guardrail language. 2nd sub HB 104 was passed by the House of Representatives on February 4.

2nd Sub. H.B. 104 was presented by the sponsor to the Senate Government Operations and Political Subdivisions Committee on Friday, February 18. During the meeting, Representative Christofferson offered 3rd Sub. H.B. 104 for consideration. The substitute allows the pay scales to move with pay for performance incentives for employees in longevity. 

UPEA spoke in favor of the bill and substitute specifically citing support for increased training provisions, streamlining the grievance process, and promoting pay for performance and merit increases. Executive Director Todd Losser addressed the AX option for supervisors. He expressed appreciation for the 2nd substitute’s implementation of guardrails for Schedule AX employees, which allowed the association to support the bill. 

Third Sub. H.B. 104 passed the Senate Government Operations Standing Committee with a favorable recommendation by a vote of 4-3 and passed the second senate reading on February, 24. The bill now sits on the Senate 3rd Reading calendar awaiting final passage. Funding for all aspects of H.B. 104 was included in the Executive Appropriations Committee approved budget items for the upcoming fiscal year.

If H.B. 104 is passed and signed by the governor as written in the 3rd Substitute, UPEA will work with each agency director to create a fair and expeditious appeal process for AX employees who receive a disciplinary action including termination. 

UPEA will remain actively involved as H.B. 104 is implemented and ensure that the agreed upon protections are put in place by each agency. The UPEA State Board has already begun discussing a strategy against any potential legislation to further erode the career service system.