OCC Bargaining Update - March 2, 2016

NTEU Takes Bargaining Dispute to Impasses Panel

 

Highlights

NTEU and OCC management bargaining dispute over Geo/Locality Pay and Merit Pay and Bonuses goes before the Federal Service Impasses Panel (FSIP) on March 8-9.

NTEU is pushing for

  • a phase-in of locality pay over three years, under which ALL OCC employees would receive locality pay increases
  1. Increases of 2 3% in first year, and totaling 3 5% over two years
  2. For 2018 and subsequent years, funding for average 1.5% locality increase, with increases for each locality based on a formula reflecting relative differences to private sector pay (same as FDIC system)
  • Suspending the use of ratings to determine merit pay increases -all employees rated “3” or higher receive a merit increase of 4%.

Both of these proposals would mean more money in the hands of bargaining unit employees as well as enhanced parity with other federal agencies (in respect to locality pay).


Background

While OCC management and NTEU reached agreement on many issues relating to compensation, including improvements to several employee benefits, the parties arrived at an impasse in negotiations over two issues: (1) Geo/Locality Pay and (2) Merit Pay and Bonuses. 

The bargaining dispute will be presented on March 8-9 to the Federal Service Impasses Panel (FSIP), a body established under federal labor law as part of the Federal Labor Relations Authority (FLRA).  Federal labor law authorizes FSIP to issue a final and binding decision resolving the dispute if it is unable to assist the parties through mediation to reach an agreement. The FSIP has broad discretion in issuing a decision – it could adopt Management’s proposal, NTEU’s proposal, some of each, or come up with its own solution somewhere in between. 


Why Is NTEU Taking this Dispute to Impasse? 

On Geo Pay:

OCC Geo Rates are almost universally lower than the GS locality rates and the locality rates paid by the other financial regulators. For example:
  • In OCC, many employees receive NO Geo Pay. But GS employees in the lowest cost areas (called “Rest of U.S.” or RUS) are receiving 14.35%. In FDIC, where base pay is similar to OCC base pay, employees in RUS are receiving locality pay of 6.24%.  
  • In DC, OCC currently provides 18% Geo, while GS locality is 24.78% and FDIC locality is 23.31%. 
  • In SF, OCC currently pays 33% Geo; GS locality is 35.75% while FDIC locality is 43.9%.
  • In Boston, OCC Geo is currently 18%; GS locality is 25.19% and FDIC locality is 28.06%.
OCC argues that despite its lower Geo Pay, its Total Pay (Base Pay + Geo) is comparable or even higher than other agencies. NTEU analysis shows that a comparison of actual salary data for bargaining unit employees reveals that Total Pay (Base + Locality) for OCC employees is actually less than Total Pay for comparable employees working at FDIC: 
  • OCC Bank Examiners in Midsize and Community Bank Supervision (MCBS) earn significantly less than their counterparts at the FDIC. 
  • OCC Examiners in Large Bank Supervision (LBS) earn significantly less than their FDIC counterparts. 
  • Average Total Pay for Attorneys is significantly less for OCC than FDIC 

NTEU proposes a phase-in of locality pay over three years, under which ALL OCC employees would receive locality pay increases: 
  • Increases of 2 – 3% in first year, and totaling 3 – 5% over two years. 
  • For 2018 and subsequent years, funding for average 1.5% locality increase, with increases for each locality based on a formula reflecting relative differences to private sector pay (same as FDIC system). 
OCC proposes to stick with its flawed, black-box methodology, and to provide Geo pay increases in only five cities: New York, San Francisco, Boston/Providence, Pittsburgh and Washington, D.C., ranging from 2 – 5% total. 


Dispute over Merit Pay and Merit Bonuses

NTEU proposes a suspension of the use of ratings to determine merit pay increases until performance management is fixed - all employees rated “3” or higher receive a merit increase of 4%.

Why?
  • NTEU compiled analytics validating employee concerns about the fairness, transparency and credibility of the OCC’s performance management program, which provides the employee ratings on which merit pay and merit bonuses are based. 
    1. Data on ratings shows unfairness in the distribution of ratings – between different lines of business, different occupations, different band levels, and even different demographic groups, including evidence of disparate impact on protected classes.
    2. Differences result from the lack of transparency and adversely impact employee credibility in the performance standards for many jobs. 
    3. Other agencies, including the FDIC, SEC and CFPB, suspended their pay-for-performance systems when similar problems were identified. 
  • NTEU supports the concept of merit pay, or pay-for-performance 
NTEU negotiated agreements in place on pay-for-performance with several other agencies, including the FDIC and NCUA. 
  • NTEU has pushed OCC to fix this problem since 2013. We even established a joint labor- management working group to develop improvements to the performance management system. However, the group failed to gain traction, due to an insufficient commitment of time and resources by management. Recently, management finally hired a consultant to assist in working on changes to the system – a process that will take at least two years. Given the significant problems with the current system, poor annual Employee Engagement Survey results regarding the system, and management’s failure to move quickly to a resolution, NTEU reluctantly determined that employee interests are not served by continued use of this broken system as the basis for making pay determinations. 
  • NTEU believes the Agency should return to differentiated merit pay system after it repairs its broken performance management system. NTEU’s bargaining proposal includes a provision allowing reopening of the agreement to negotiate a new merit pay system once a new performance management system has been finalized.  
  • Management proposes to continue the status quo, and use the current performance management system as the basis for merit pay and merit bonus determinations until the new system (or revisions to the current system) are ready. 

NTEU NEEDS YOUR SUPPORT!  Membership in the Union sends a strong message to OCC Management that employees support higher locality pay and a more transparent and consistently applied performance system. Your membership amplifies your voice at the bargaining table.  Contact your local Chapter President or Steward for details. 
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