Template revised September 22, 2016.
AGENDA MEMORANDUM
Item No.
6b
ACTION ITEM
Date of Meeting
November 14, 2017
DATE: November 2, 2017
TO: Dave Soike, Interim Executive Director
FROM: Paula Edelstein, Sr. Director, Human Resources
Tammy Woodard, HR Director – Total Rewards
SUBJECT: Salary and Benefits Resolution
ACTION REQUESTED
Request first reading of Resolution No. 3739: A resolution of the Port Commission of the Port
of Seattle Establishing Jobs, Pay Grades, Pay Ranges, and Pay Practices for Port Employees not
represented by a labor union; Authorizing Legally Required Benefits, Other Benefits for Port
Employees not represented by a Labor Union including Retirement, Paid Leave, Healthcare, Life
Insurance and Disability Benefits, Benefits for Port of Seattle Retirees, and Benefits for Port of
Seattle Commissioners; and Authorizing this Resolution to be Effective on January 1, 2018, and
Repealing all Prior Resolutions Dealing with the Same Subject, Including Resolution No. 3727 as
amended by Resolution No. 3734.
EXECUTIVE SUMMARY
The Salary and Benefits Resolution is the Port Commission’s authorization to provide pay and
benefits to the Port’s non-represented employees. The Resolution establishes the pay ranges
for non-represented jobs and the various benefits that comprise the overall benefits package
offered to non-represented employees. Proposed changes to the Salary and Benefits
Resolution for 2018 include incorporating Resolution No. 3734, an adjustment to the 2018 non-
represented pay ranges, several changes to the benefits package, and several other minor
changes.
Following this presentation and engagement with the Commission, staff will return to request
second reading, and final passage, of Resolution No. 3739, the Salary and Benefits Resolution,
on November 28, 2017.
BACKGROUND
The Salary and Benefits Resolution specifies the pay and benefits programs authorized by the
Port Commission while administrative details of these programs are maintained in Port policies.
The Resolution also includes authorization for benefits offered to Port of Seattle retirees and to
Port Commissioners. Updates to the Resolution are designed to keep the authorized pay and
benefit plans current and ensure the Total Rewards package that they are part of continues to
COMMISSION AGENDA – Action Item No. 6b___ Page 2 of 5
Meeting Date: November 14, 2017
Template revised September 22, 2016; format updates October 19, 2016.
support the attraction and retention of employees with the talents and abilities necessary for
the Port to achieve its mission, vision and objectives.
DETAILS
Recommended changes to the Salary and Benefits Resolution are as follows:
Incorporation of Resolution No. 3734
Consistent with Resolution No. 3734, the new Salary and Benefits Resolution replaces all
references to the Chief Executive Officer, and CEO, with Executive Director. The new resolution
also includes the addition of the General Counsel to the list of jobs in section II.A. that report to
the Commission, jointly to the Commission, or to a committee of the Commission.
Adjustment to Pay Grades and Ranges for 2018
As in previous years, Human Resources staff analyzed data from published salary surveys to
determine how well our existing pay ranges align with market pay rates. We also review data
from salary planning surveys to determine what adjustments other employers anticipate
making to employee pay during the coming year. Results of this work informed recommended
adjustments to the 2018 pay grade and range structure for non-represented employees.
Our analysis indicated that the Port’s current pay ranges for non-represented employees are a
little below market. Additionally, employers are expecting that the overall average pay increase
will be about 3% for 2018. Based on this analysis, we are recommending a 3% salary range
adjustment to ensure that we maintain pay ranges at market competitive levels for 2018. With
this range increase, we estimate that fewer than 30 employees will have pay rates that are less
than their 2018 range minimum and the estimated annual cost of increasing these employees’
pay to their new range minimum will be less than $30,000.
In addition to an adjustment to the pay ranges, the recommended 2018 structure eliminates
grades 3 through 6. This is a follow-up to modifications made for this year when we eliminated
grades 1 and 2 in order to address the increasing City of Seattle minimum wage and the Port’s
High School Intern pay rate, both of which were higher than the minimums of the grade 1 and 2
pay ranges.
In 2018 the City of Seattle minimum wage will be $15.00/hour and the Port’s High School Intern
rate will be $15.75/hour. Grades 3 through 6 would have minimum pay rates that are less than
$15.00/hour in 2018. There are two employees assigned to jobs in these grades. These jobs
will be reassigned to grade 7, which will have a range minimum greater than $15.00/hour. The
employees whose jobs will be reassigned are currently paid within the 2018 grade 7 pay range.
Our analysis of the grade structure included reviewing the numbering of the grades for possible
realignment. We concluded that leaving the grade numbering system intact is preferable to
realigning them. Changing the grade numbers and realigning them so that the current grade 7
COMMISSION AGENDA – Action Item No. 6b___ Page 3 of 5
Meeting Date: November 14, 2017
Template revised September 22, 2016; format updates October 19, 2016.
becomes grade 1 would result in all non-represented jobs being assigned to lower numbered
grades. Making a change like this in the Port’s HR/Payroll system would likely be perceived, by
at least some employees, as a grade reduction, or possibly even a demotion, though the pay
range for a job would not be reduced. Realigning grade numbers would also require a fair
amount of administrative work. The combination of administrative work and the employee
perception makes maintaining the current grade numbers the preferable approach.
Adjustments to Authorized Benefits
The new Salary and Benefits Resolution includes several recommended changes to the Benefits
section of the Resolution.
In the Paid Leave section (III.B.1.b), Extended Illness (EI) Leave is renamed Sick Leave.
Administrative details of this plan will be updated in the Port Leave Policy, HR-5. The changes
are being made in response to feedback received from employees through the Employee
Benefits Survey conducted in the fall of 2016, follow-up input from employees received through
focus groups conducted in August of this year, and to ensure compliance with the Washington
paid sick leave law that becomes effective on January 1, 2018. While the new law covers only
employees in non-exempt, overtime eligible, jobs most of the changes address employee
feedback and all changes will apply to all non-represented benefits eligible employees. The
changes will:
• remove the current restriction that employees must use two days of Paid Time
Off (PTO) leave before accessing their EI/Sick Leave hours,
• remove limitations on when EI/Sick Leave can be used so that employees can
access this leave for any health related reason,
• broaden the definition of family members so that employees can use their
EI/Sick Leave to care for family members as defined by the new state law,
• change how EI/Sick Leave is accrued and increase the accrued hours so that
employees earn Sick Leave on all hours paid, including overtime, and a full-time
employee paid for 2080 hours will earn seven days of Sick Leave per year rather
than the current six days, and
• add a provision that will reinstate the portion of Sick Leave that is not cashed out
when an employee leaves the Port and returns within 12 months.
The sick leave plan also includes a new version of the plan that will cover non-represented
employees who are not eligible for the Port’s full benefits plan. This version of sick leave will
provide paid sick leave equal to the requirements of the new Washington paid sick leave law
and provide:
• one hour of sick leave earned for every 40 hours worked,
• access to earned sick leave after 90 days of employment,
• carry over of up to 40 hours of earned sick leave from one year to the next,
• reinstatement of sick leave balances if an employee returns to work at the Port
within 12 months of when they left, and
COMMISSION AGENDA – Action Item No. 6b___ Page 4 of 5
Meeting Date: November 14, 2017
Template revised September 22, 2016; format updates October 19, 2016.
• when an employee earning sick leave under the required plan moves to a regular
job and becomes eligible for the regular PTO/Sick Leave plan their required plan
balance will transfer to their Sick Leave plan and they will be able to access it as
soon as they have worked a total of 30 days for the Port.
While these EI/Sick Leave plan changes are specific to non-represented employees, our Labor
Relations staff is evaluating the leave plans included in current collective bargaining agreements
and is working with union representatives to make any changes necessary to ensure the Port’s
plans for represented employees comply with the new Washington paid sick leave law.
In Benefits Programs Offered to Employees section (III.B.2.a.2.), language is returned to the
Resolution that was inadvertently moved to Port policy authorizing contributions to an
alternative plan ‘in lieu of’ Social Security for Police and Fire Department non-represented
management employees working in LEOFF eligible positions. LEOFF is the State Department of
Retirement Systems plan that covers sworn Police and Fire personnel. Port LEOFF members do
not participate in Social Security. This ‘in lieu of’ plan was previously authorized through the
Salary and Benefits Resolution and when the Resolution was simplified in 2016, the language
authorizing this benefit was accidently moved from the Resolution to Port policy.
Finally, In the Retirement section (III.B.2) of the Resolution there is a new section authorizing
Port contributions in lieu of, and equal to, LEOFF employer contributions to an alternative plan
for Police Department non-represented management staff working in LEOFF eligible positions
who are precluded from joining LEOFF because of previous employment and Washington State
Retirement Plan membership as stated in RCW 41.04.270. There is also language in the
Resolution authorizing contributions previously made to this ‘in lieu of’ plan as this plan was
implemented prior to being authorized by the Port Commission through the Salary and Benefits
Resolution.
Other Adjustments
In section I of the Resolution, Definitions, the definition of at-will is modified slightly to specify
that the jobs designated in the Exhibit to the Resolution are at-will, while employees hired or
appointed to these jobs prior to January 1, 2014, are grandfathered as ‘for cause’ employees.
In the Benefits Offered to Port of Seattle Commissioners section, the eligibility for retiree life
insurance language is updated to correctly align with provisions in the Port’s life insurance
contract.
There are other minor recommended changes included in the new Resolution. These include
adjusting language in section II.E.2 (Payroll) to change the reference from the RCW to the
Washington State Constitution as the source of the Port’s right and obligation to recover any
payroll amounts paid in error, as well as minor wording or punctuation changes that clarify
existing sections of the resolution.
COMMISSION AGENDA – Action Item No. 6b___ Page 5 of 5
Meeting Date: November 14, 2017
Template revised September 22, 2016; format updates October 19, 2016.
Finally, section VII, Effective Date, states that the new resolution will be effective January 1,
2018, and there will be no end date to the resolution. Updates, such as range adjustments and
benefits plan changes, will be approved by the commission with a new resolution amending the
Salary and Benefits Resolution.
Cost
There is minimal cost associated with the recommended changes to the Salary and Benefits
Resolution. Costs fall in two areas: those associated with the range adjustment and those
associated with the sick leave changes.
Based on current data, the cost of adjusting the pay ranges will be less than $30,000. The cost
associated with the new version of the sick leave plan for employees not eligible for the full
benefits package will depend on how much of the new earned time is used by employees and
we expect that it will be less than $35,000. Our best estimate of the financial impact of the
recommended EI/Sick Leave changes is a cost savings of up to $200,000 based on potential
changes in how employees use these benefits and how the change in leave benefits usage may
then impact the value of employees’ total PTO and Sick Leave balances.
ATTACHMENTS TO THIS REQUEST
(1) Draft Resolution No. 3739
(2) Draft Resolution No. 3739 Exhibit A
(3) Draft Resolution No. 3739, Red Line
(4) Presentation slides
(5) Summary of Changes from 2017 Salary and Benefits Resolution
PREVIOUS COMMISSION ACTIONS OR BRIEFINGS
October 24, 2017 – The Commission was briefed on Salary and Benefits Resolution No. 3739
