Oakland Bargaining Bulletin #8

 

Here’s the 411 on the Paid Family Leave!

For several contracts, our Local 21 Bargaining Teams have had to tackle the tough problem of State Disability Insurance (SDI) versus private insurance.

Under our current agreement, Local 21 members have short term disability and long term disability under The Hartford, a private provider. The benefits are quite good; for example, long term disability under our plan provides long term wage replacement up to the age of 70 for members in need. The only downside to the current coverage is that it does not provide paid family leave the way SDI does.

In a perfect world, we would simply add a paid family leave component to our current insurance plans. In the real world, however, it is not that simple.  Because the state provides SDI in California, no insurance company will write a paid family leave insurance policy… they just don’t want to compete against the state of California.

Could we just move to SDI instead of the Hartford?
There are several challenges to moving our bargaining unit to SDI. First, there is a cost of roughly a half million dollars to do so. Second, under SDI, disability coverage is only one year. After that, members would have to apply for Social Security Insurance (SSI). If you are a career City of Oakland employee, you won’t be eligible for long term disability coverage under SSI.

What’s the Union trying to do on paid family leave?
Since we cannot obtain an insurance policy to cover paid family leave, our Union has proposed a two year pilot program that would have Oakland fund the paid family leave for members directly. According to initial costing information from the City of Oakland, they anticipate that 20% of our members would use a paid family leave annually (remember, this is more than just maternity or paternity leave… it is much more broad than that). They took our average wages, multiplied it by 37.5 hours/week and then calculated the total cost as just under $600k. Since the benefits under SDI include a one week “wait period” with no benefits, we adjusted the City’s numbers to 5 weeks of paid family leave and it comes to roughly $500k, the same amount of money it would cost the City to move Local 21 members to SDI itself.

Under this proposal, our members would get the best of all worlds: paid family leave time similar to SDI, short term disability and long term disability.

We are awaiting costing data to confirm the city’s original costing on this matter and will update members in a future bulletin!