June 25, 2014
Fiscally responsible agreements consistent with now-ratified UFT contract, including unprecedented health care savings; require no new funding
Pattern settlement covers historic agreement to create childcare and eldercare fund; City, unions also agree to innovative employee training fund, new collaborative approach to healthcare delivery to improve patient experience
NEW YORK–Mayor Bill de Blasio announced today that the City of New York has reached tentative contract agreements with 1199 SEIU United Healthcare Workers East (1199SEIU) and the New York State Nurses Association (NYSNA).
The pattern of the two tentative agreements is consistent with the City’s now-ratified contract with the United Federation of Teachers (UFT) and requires no new funding over previous budgetary projections. The agreements also include the unprecedented health care savings agreed upon with the Municipal Labor Committee, which—along with cost offsets from the City’s labor reserve and the joint City-MLC Health Insurance Premium Stabilization Fund—make these raises affordable and responsible. Even after the City’s budget factored in the pattern settlement for the first time since the contracts were left open in 2009, out-year gaps remain well below the historical average under prior administrations.
As part of today’s tentative contracts, the City and the unions have agreed to set up a first-of-its-kind childcare and eldercare fund for members’ dependents, which will be funded within the pattern settlement. The parties have also agreed to fund and restructure a new, innovative employee-training fund. NYSNA, the City, and the Health and Hospital Corporation (HHC) have agreed to a new collaborative approach to the delivery of healthcare, which will help improve patient experiences and outcomes.
The proposed nine-year contract with 1199SEIU would begin, retroactively, on August 5, 2009 and expire on August 4, 2018. The proposed nine-year, four-and-a-half month contract with NYSNA would begin retroactively on January 21, 2010 and expire on June 5, 2019.
“Today marks another step toward restoring a productive, respectful relationship between the City and its workforce, while securing much-needed certainty that protects our long-term fiscal health,” said Mayor de Blasio. “These tentative agreements with 1199SEIU and NYSNA are consistent with the pattern we established earlier this year, including the unprecedented and guaranteed health care savings. Working with our healthcare employees and nurses, we secured additional improvements—including an historic agreement to create a childcare and eldercare fund, innovative employee training, and a new collaborative approach to healthcare delivery that will make a big difference for patients and service providers alike.”
“The healthcare workers of 1199SEIU are thrilled that we have reached this landmark agreement that ensures we can provide quality care for New Yorkers,” said 1199 SEIU United Healthcare Workers East President George Gresham. “The training fund will allow caregivers to improve their skills and advance their careers, and the childcare and eldercare fund will allow members to care for their families. Mayor de Blasio’s administration has ushered in a new era, in which the city’s workforce is listened to and treated with respect. This approach to negotiations sets the tone for our entire city, helps to address the destructive inequality gap, and signals that New York is for everyone, not just the wealthy few.”
“This new agreement reflects what we can achieve when we work together with a progressive Mayor to make positive changes in the lives of city nurses and our patients,” said NYSNA’s HHC Executive Council President Anne Bové, RN. “For too long, city nurses struggled for a fair contract. Finally, we can put that struggle behind us. We are committed to working together to ensure that New York City’s public hospitals continue to be the best places to work and to receive care.”
Dr. Ram Raju, President and CEO of HHC, said, “The New York City Health & Hospitals Corporation is deeply appreciative of the sustained efforts of Mayor de Blasio’s office and our organized labor partners—1199 SEIU United Healthcare Workers East and the New York State Nurses Association—that have culminated in these tentative contract agreements. The agreements reflect reform-minded, innovative thinking that benefits our employees and our health system as we pursue the transformations required to better serve our patients in a rapidly changing healthcare delivery environment. I am particularly pleased by the collaboration envisioned by the Nursing Practice Councils to enhance the patient experience and the quality of care at our facilities. My congratulations to all those who have worked tirelessly in reaching these milestone agreements.”
Under the tentative agreements announced today, 1199SEIU and NYSNA employees would receive restructured payments in lieu of the raises that had been granted by the previous administration to much of the municipal workforce: 4 percent for 2009 and 4 percent for 2010, provided in increments from 2015 through 2020. The employees would also receive raises of approximately 2 percent a year, each year from 2015 through 2018.
In total, the MLC and the City have agreed to secure $3.4 billion in health care savings through Fiscal Year 2018, and $1.3 billion in savings every year thereafter. The City and the municipal unions will work to secure cost-cutting measures, aimed at bending the curve of rising health care costs for the first time. These savings are guaranteed and enforceable by arbitration.
After the guaranteed health care savings and funds from the labor reserve and stabilization fund, the net cost of the tentative 1199SEIU settlement will be $87 million through FY2018 and $36.4 million for the lump sums in FY2019-2021. The net cost of the tentative NYSNA settlement will be $343.8 million through FY2018 and $143.6 million for the lump sums in FY2019-2021. This will require no new funding, as it fits within the pattern established by the UFT contract.
All additional benefits agreed upon with 1199SEIU and NYSNA will also be fully funded within the pattern settlement, reflected in a reduced wage increase in Year 4 (2013) for 1199SEIU employees, as well as a 4.5 month contract extension and a delay in the two final wage increases for NYSNA employees.
The terms of the agreements must be approved by the unions’ full in-service membership.
1199SEIU’s over 2,500 employees and NYSNA’s over 8,000 employees have worked without a contract since 2009 and 2010, respectively. These agreements make good on the Mayor’s pledge to restore a productive and respectful relationship between the City and its workforce.
Key Reforms and Improvements for Patients and Workers
For the 2008 to 2010 round of bargaining, as with UFT employees, 1199SEIU and NYSNA employees will receive restructured payments in lieu of the raises that had been granted by the previous administration to much of the municipal workforce: 4 percent for 2009 and 4 percent for 2010.
The wages 1199SEIU and NYSNA employees did not receive will be restructured and provided in incremental lump sum payments, from 2015 to 2020, reflecting a percentage of the balance as of the payout date—12.5% in 2015, 12.5% in 2017, and 25% each in 2018, 2019, and 2020.
The increases they did not receive will also be restored to their salaries at approximately two percent a year, each year, from 2015 through 2018, as follows:
For 1199SEIU –
February 5, 2015: 2.00%
February 5, 2016: 1.961%
February 5, 2017: 2.00%
February 5, 2018: 1.9605%
For NYSNA –
July 21, 2015: 2.00%
July 21, 2016: 1.961%
July 21, 2017: 2.00%
July 21, 2018: 1.9605%
For the 2010 to 2017 round of bargaining (covering August 5, 2011 through August 4, 2018 for 1199SEIU and January 21, 2012 through June 5, 2019 for NYSNA), employees will receive increases based on the UFT pattern:
For 1199SEIU –
February 5, 2013: 0.35%
February 5, 2014: 1.00%
February 5, 2015: 1.00%
February 5, 2016: 1.50%
February 5, 2017: 2.50%
February 5, 2018: 3.00%
For NYSNA –
July 21, 2013: 1.00%
July 21, 2014: 1.00%
July 21, 2015: 1.00%
July 21, 2016: 1.50%
January 21, 2018: 2.50%
January 21, 2019: 3.00%
The agreements also include a one-time $1,000 ratification payment, pro-rated for part-time employees.
The total costs of the tentative agreements, including the reforms detailed above, are covered by the pattern settlement established by the UFT contract and will require no new funding. Even after factoring in the pattern settlement, the City’s out-year budget gaps remain at manageable levels that are well below historical averages.
The costs of today’s two tentative agreements are as follows:
Gross Cost: $120.1 million
Stabilization Fund & Health Savings: ($31.7 million)
Labor Reserve: ($1.3 million)
Net Cost: $87 million
Gross Cost of Lump Sum Payments: $69.9 million
Health Savings: ($33.5 million)
Net Cost: $36.4 million
Gross Cost: $442.4 million
Stabilization Fund & Health Savings: ($97.8 million)
Labor Reserve: ($0.7 million)
Net Cost: $343.8 million
Gross Cost of Lump Sum Payments: $246.9 million
Health Savings: ($103.3 million)
Net Cost: $143.6 million