February 7, 2008

Correctional Officer
Pay, Benefits, and
Labor Relations
Elizabeth

G.

Hill

•

Leg i s l a t i v e

Analyst

The administration proposes a 5 percent raise
for correctional officers and legislation to
allow it to impose a labor settlement on the
officers’ union, the California Correctional
Peace Officers Association (CCPOA). We find
that the officers’ compensation levels are sufficient to allow the prisons to meet personnel
needs at the present time, but we generally
agree with other administration proposals
to increase management control in prisons.
We note that the dysfunctional relationship
between the administration and CCPOA
makes it more difficult to address the many
issues facing the state’s prison and personnel
management systems. ■

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Acknowledgments

LAO Publications

This report was prepared by Jason Dickerson,
and reviewed by Michael Cohen. The Legislative
Analyst’s Office (LAO) is a nonpartisan office
which provides fiscal and policy information
and advice to the Legislature.

To request publications call (916) 445–4656.

■

This report and others, as well as an E–mail
subscription service, are available on the
LAO’s Internet site at www.lao.ca.gov. The
LAO is located at 925 L Street, Suite 1000,
Sacramento, CA 95814.

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Executive Summary
Huge Numbers of People Are Interested in
Being Correctional Officers. The successful operation of California’s vast prison system depends
on the work of around 30,000 state correctional
peace officers. There is a huge supply of workers
interested in being one of these officers. Currently, around 130,000 applications—equivalent
to one of every 140 persons in the California
civilian labor force—are received by the state to
be a correctional peace officer each year. The
educational requirement to be a correctional
officer generally is a high school diploma or
the equivalent. Particularly when compared to
other Californians with similar educational levels,
officers enjoy substantial job security, and they
earn good salaries and outstanding benefits.
Salaries and benefits both were increased under
the labor agreement between the state and the
officers’ union that was in effect between 2001
and 2006. For all of these reasons, the job of
state correctional officer may now be the most
sought after in the California economy. With a
reopened and expanded academy, the Department of Corrections and Rehabilitation (CDCR)
recently has reported making major progress in
filling correctional officer positions.
Dysfunctional Relationship Between Administration and Union. The current relationship between the California Correctional Peace
Officers Association (CCPOA) and the state is
marked by constant, time–consuming, expensive,
and, sometimes, strident conflict. It appears to
be completely dysfunctional. This conflict results
in scores of arbitration cases that distract CDCR

Legislative Analyst’s Office

and Department of Personnel Administration
(DPA) staff members from tending to other issues
in prisons and the broader state workforce. This
conflict also manifests itself at the bargaining
table, and makes it more difficult to implement
prison and parole system reforms.
With Talks Stalled, Administration Wants to
Impose Its Plan. In September 2007, talks between DPA and CCPOA regarding a new labor
agreement broke down. The administration announced its intent to invoke a rarely used provision of state law and impose its “last, best, and
final offer” on CCPOA, subject to legislative approval of expenditures and any statutory changes
needed to implement the offer. The plan gives
officers a 5 percent raise and increased benefits
in 2007–08 (at an estimated annual cost of $260
million) and institutes changes that the administration says will increase management control of
the prisons, curb abuse of leave time, and reduce
employee grievances.
Compensation Increases Not Needed At
This Time. We find little evidence that current
compensation levels are insufficient to attract the
number of qualified officers needed to staff California’s prisons. In addition, the state faces other
pressing recruitment and retention issues in other
bargaining units, as well as serious budgetary
challenges. Accordingly, we recommend that the
Legislature reject the administration’s current proposal to increase pay and benefits for correctional
officers retroactive to July 1, 2007. The administration’s proposals to increase management control
of the prisons, however, have much merit.

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Introduction
Among the major issues facing the Legislature
as it addresses policy issues concerning prisons
and the state’s fiscal situation are those related to
the pay, benefits, and general labor-management
relations with the state’s correctional peace officers. Rank-and-file officers are represented by
CCPOA. In this report, we discuss the recent
history of the state’s labor relations with CCPOA
and make recommendations to the Legislature
concerning the Governor’s proposal to impose a
new contract on the union.
This report discusses:

➢	 General information about the state’s correctional peace officers.

➢	 The current administration offer to the
union, parts of which are being presented
to the Legislature for approval.

➢	 Our findings on personnel management
issues affecting the officers.

➢	 Our recommendations to the Legislature
concerning the administration’s offer and
related policy matters.
In preparing this report, we discussed correctional officer personnel issues with administration
representatives of DPA, CDCR, and the Department of Finance (DOF), as well as representatives of CCPOA.

➢	 Key provisions and the history of the last
labor agreement between the state and
the officers’ union.

Background
CCPOA Represents One of
Every Seven State Workers
Their Salaries Are Largest Share of General
Fund Personnel Costs. Bargaining Unit 6 is the
second largest of 21 bargaining units now recognized under the state collective bargaining
law (known as the Ralph C. Dills Act). Unit 6
has around 30,000 rank-and-file members. This
represents one of every seven state employees.
As shown in Figure 1, however, salaries and
related expenses for Unit 6 members and their
supervisors total about 40 percent of all such
dollars paid from the General Fund. (Unit 1,
representing administrative professionals, is the
state’s largest bargaining unit and accounts for
the General Fund’s second largest expenditures.)

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This figure results from the relatively high salary
levels of correctional officers, as well as the fact
that personnel costs for correctional staff—unlike
many other groups of state employees—are
funded almost entirely from the General Fund.
The CCPOA represents Unit 6 members in their
employer/employee relationships, including labor
negotiations.
Correctional Officers Oversee Felons and
Youth Offenders. About 80 percent of Unit 6
members belong to the civil service classification of correctional officer (the largest such class
in state government). These officers confine
and supervise felons within the state’s prison
system. Specific duties vary among institutions
and designated posts based on security levels of

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inmates, facility design, and assignments. Officers are assigned to duty in towers, housing
units, prison reception centers, control booths,
yards, gun posts, transportation, and other prison
settings. In addition to correctional officers, there
are several other classifications in Unit 6. These
include youth correctional officers (who supervise youth offenders), parole agents, and correctional counselors (who perform various duties,
such as classification of inmates). Over 200 Unit
6 members work for the Department of Mental
Health (DMH), where they provide custody and
treatment services for inmate/patients at DMH
facilities. The rest work in CDCR. Unit 6 members and their supervisors make up over one–half
of CDCR’s workforce.

The Last Agreement With CCPOA: Major
Changes in Correctional Officer Policies

Legislative Policy Prior to 2002. Chapter
290, Statutes of 1986 (SB 1373, Keene), establishes general state policy for correctional officer pay
and benefits. Chapter 290 states the broad intent
of the Legislature that the administration consider
compensation levels of other peace officers in
the state when negotiating with Unit 6. Chapter 290 is similar to several laws passed by the
Legislature since 1974 related to the California
Highway Patrol (CHP), which require the executive branch to consider compensation levels of
officers in five urban police departments when
determining pay and benefits of CHP officers.
(The five departments are those for the cities of
Los Angeles, Oakland,
San Diego, and San
Figure 1
Francisco, as well as
Correctional Peace Officer Costs Are Largest Share
the Los Angeles County
Of General Fund Personnel Expenses
Sheriff’s Office.)
(Salary and Related Costs as of March 2007)
2001–2006 Labor
Agreement. Unit 6’s last
Total: $9.2 Billion
labor agreement with
Correctional Peace Officers
the state—known as a
and Supervisors
All Other
memorandum of underGeneral Fund
State Employees
standing (MOU)—instituted major changes
in correctional officer
personnel policy (salaries, benefits, and other
personnel matters) and,
therefore, in prison system operations. Chapter 1, Statutes of 2002
(SB 65, Burton), which

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ratified this MOU, took effect on January 16,
2002, although certain provisions of the MOU
were retroactive to July 1, 2001. The agreement
expired on July 2, 2006. (Accordingly, the MOU
is known as the 2001–06 MOU.) The five–year
duration of the agreement was unusual, but under the Dills Act, the Legislature has the choice

whether to fully fund or not to fully fund expenditures under an MOU in the annual budget
act. (If the Legislature opts not to fully fund such
expenditures, the Dills Act provides that negotiations may reopen on all or part of the MOU.) As
discussed below, the prior CCPOA MOU was
renegotiated in 2004.

CCPOA’s 2001–06 Labor Agreement
The Original Agreement—
Ratified in 2002

letter listed a complicated formula involving the
base pay and several other categories of compensation of both Unit 6 members and CHP officers.
The results of the formula showed that correctional peace officers were paid $666 per month less
than comparable CHP officers as of June 2001.
As a part of the MOU, CCPOA agreed to
forego salary increases for the first two years of
the agreement. The subsequent salary increases
were structured to bring the compensation of Unit
6 members—as defined in the unpublished side

The 2001–06 CCPOA MOU is over 400
pages long. It contains many substantive provisions. Key provisions are summarized in Figure 2
and discussed below.
Relationship Between Correctional and
Highway Patrol Salaries. The original version of
the MOU, as ratified by the Legislature in 2002,
provided for salary increases on four specific
dates: July 1 of each of the
years 2003, 2004, 2005,
Figure 2
and 2006. The salary
Major Provisions of 2001-06
increases were to be based Memorandum of Understanding
on “a law enforcement
With California Correctional Peace Officers Association
comparative methodology
mutually agreed to by the
Original Agreement—Ratified in 2002
parties.” Described in a
x Salaries. Linked correctional officer and CHP officer salaries.
document labeled as an
- No pay increases in 2001-02 and 2002-03.
- Subsequent pay increases to bring correctional officer compensation back to
“unpublished side letwithin $666 per month of CHP officers’ compensation by 2006.
ter” (an agreement signed
x Retirement. Increased retirement benefits (“3 percent at 50” formula) for
officers who retire in 2006 or after.
by officials of DPA and
x Overtime. Reduced number of hours before overtime wages must be paid to
CCPOA), this methodology
officers. Other provisions increased overtime compensation of officers.
linked correctional officer
Renegotiated Agreement—Ratified in 2004
pay to that of CHP officers, x Salaries and Benefits. Deferred salary and benefit increases to later years of
the agreement.
which in turn had been
- Estimated to result in $108 million of reduced General Fund costs over two fislinked to that of the five
cal years: 2004-05 and 2005-06.
x
Continuous
Appropriation. Continuously appropriated funds to provide
police departments since
officers with renegotiated compensation amounts through July 2, 2006.
1974. The unpublished side
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letter—back to within $666 per month of comparable CHP officers by the MOU’s expiration date
in 2006. Along with ratifying the 2001–06 MOU,
Chapter 1 made another important change to state
employee salaries—effectively requiring the state
(except upon mutual agreement with the CHP officers’ union) to pay CHP officers each year in line
with the pay given to comparable officers of the
five urban police departments listed earlier. Previously, the law required only that DPA consider
local pay in this manner.
“3 Percent at 50” Retirement Benefits.
Chapter 1 implemented increases in correctional
officers’ retirement benefits on top of other increases that were approved several years earlier.
Prior to 2000, retiring correctional officers were
eligible for 2.5 percent at 55 retirement benefits
through the California Public Employees’ Retirement System (CalPERS)—funded from both
employer and employee contributions. Chapter
555, Statutes of 1999 (SB 400, Ortiz), increased
various categories of CalPERS pension benefits,
including an increase in correctional officers’
benefits from the 2.5 percent at 55 formula to
a “3 percent at 55” formula. In 2002, Chapter 1
further increased the benefits from the “3 percent at 55” formula to a “3 percent at 50” formula for officers who retire in 2006 or thereafter.
This means that an officer retiring at or after age
50 is eligible for a pension equal to 3 percent
of final compensation multiplied by his or her
number of years of service. Maximum pension
benefits typically are 90 percent of final compensation. In addition to its contributions for the
CalPERS benefits, the state makes contributions
to a defined contribution retirement plan for
correctional officers equal to about 2 percent of
each eligible union member’s base pay.

Legislative Analyst’s Office

Reduced Work Period. The federal Fair
Labor Standards Act (FLSA) and its regulations
include rules about overtime wages. Generally,
overtime must be paid at 150 percent of the employee’s regular rate of pay for each hour worked
over 160 hours in a 28–day work period (essentially, each hour over a 40–hour work week).
There are specific FLSA rules for law enforcement officers, including correctional officers. In
2002, Davis Administration officials stated that
FLSA “permits an exception for law enforcement personnel but only if the employees’ union
agrees.” In its 1999–2001 labor agreement, Unit
6 agreed to be paid overtime after working 168
hours each 28 days (160 hours of regular post
duty, 4 hours of pre– and post–shift activities,
and 4 hours of training). The 2001–06 MOU,
however, changed that provision, effective July
1, 2004, to one where officers would receive
overtime after working 164 hours (excluding
the 4–hour training requirement) every 28 days.
Because officers’ posts need to be covered while
they are attending training, this led to increased
overtime costs (estimated by the Bureau of State
Audits to be at least $38 million annually beginning in 2004–05). The administration stated in
2002 that this was cheaper than having no FLSA
exemption at all from CCPOA.
Sick Leave and Overtime. As we discussed
in our Analysis of the 2000–01 Budget Bill (see
page D–51), CDCR has had problems managing the use of sick leave by its employees. The
2001–06 MOU eliminated a program that institutions previously used to track and identify sick
leave use. In addition, a provision of the CCPOA
MOU included sick leave as time worked in calculating overtime. Moreover, the MOU assigned
overtime by seniority, meaning that the most
senior—and, therefore, the most highly paid—
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employees were able to work more overtime.
Since overtime compensation is based on the
employee’s base salary, these provisions increased CDCR overtime costs. Other factors, including unfilled officer positions and institution–
specific factors, also have contributed to CDCR’s
recurring, high overtime expenditures. Unit 6
members accounted for $471 million of overtime
costs in 2006–07—an average of over $16,000
per Unit 6 member. This was an increase from
$402 million of overtime costs in 2005–06, a
17 percent increase in one year.
Entire Agreement Clause. Numerous state
employee labor agreements contain an “Entire
Agreement Clause” similar to that in CCPOA’s
MOU. It requires the administration and the
union to negotiate concerning the impact of
workplace changes when all three of the following factors exist:
• 	 The changes would affect “the working
conditions of a significant number of
employees in Unit 6.”
• 	 The subject matter of the change is
within the scope of representation for the
union under state law.
•	

The union requests to negotiate with the
state.

The clause provides that if there is a disagreement on whether a proposed change is subject
to negotiation, that disagreement may be submitted to binding arbitration. The Schwarzenegger
Administration has stated that CCPOA’s use of
this clause “requires the state employer to negotiate continuously with CCPOA over the impact of
matters within its management discretion.” The
administration also has cited the clause as one

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reason for a backlog of over 550 pending arbitrations related to CCPOA as of September 2007.
Renegotiated Agreement—
Ratified in 2004
In 2003 and 2004, the current and prior
administrations sought various concessions from
state employee unions in order to help address
the state’s fiscal problems. Chapter 217, Statutes
of 2004 (SB 1110, Cedillo), approved a renegotiated agreement with CCPOA. Chapter 217
was estimated to result in $108 million of reduced General Fund costs over two fiscal years:
2004–05 and 2005–06.
Deferred Salary and Benefit Increases.
Under the comparative pay methodology in
the original 2001–06 MOU, Unit 6 members
were scheduled to receive a 10.9 percent salary
increase on July 1, 2004. Under the renegotiated
agreement, CCPOA agreed that its members
instead would receive an increase of 5 percent
on that date, another 5 percent on January 1,
2005, and another 0.9 percent on June 30, 2006.
In 2005–06, the state also was permitted to
suspend a portion of its payments to correctional
officers’ defined contribution retirement plan.
The renegotiated agreement provided that the
comparative pay methodology—the monthly
$666 compensation difference between Unit 6
members and CHP officers—was to “be reestablished in full on July 1, 2006.”
Continuous Appropriation. Under the Dills
Act, increases to cover higher costs for unionized
state employees’ pay and benefits typically require
approval by the Legislature each year in the budget
act. Chapter 217, however, continuously appropriated the funds necessary to provide Unit 6 members with the compensation amounts specified in
the renegotiated MOU through July 2, 2006.
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Arbitration Decisions in 2006 and 2007
Large Arbitration Award Increases Officers’
Pay Levels Beginning in 2007. In 2005, CCPOA
filed a grievance concerning several issues,
including the amount of the July 1, 2005 pay
increase calculated by the administration under
the MOUs’ comparative pay methodology. In
November 2006, an arbitrator found in favor of
CCPOA on several of the points in the arbitration, resulting in a total award of $440 million.
(The $440 million cost figure included [1] the
cost of retroactive increases in officers’ compensation levels for 2005–06 and 2006–07 and
[2] the ongoing cost of the increases in 2007–08.)
The Legislature appropriated funds to comply
with the arbitrator’s decision. Unit 6 members’
paychecks generally reflected these increases
beginning in the spring of 2007.
No Required CCPOA Pay Increases After
2001–06 MOU Expires. In 2006, the Legislature
approved a new four–year MOU with the CHP
officers’ union, to take effect July 3, 2006. The
2001–06 CCPOA MOU expired the day before.
In September 2006, CCPOA filed a grievance
asserting that Unit 6 members’ pay needed to be
adjusted to maintain the $666 monthly differ-

ence with CHP officers, even though the MOU
with the state had expired. In September 2007,
an arbitrator found “there is no requirement in
the MOU to provide additional salary increases
to CCPOA” due to increases in CHP officers’
compensation after July 2, 2006.
Bottom Line on the 2001–06 MOU

Unit 6 Pay Climbed Much Faster Than That
of Other Employees. Most state employees,
including Unit 6 members, received no general
salary increase in 2001–02 or 2002–03. Figure 3
shows the general salary increases for correctional
officers, CHP officers, and most other state employees between 2003–04 and 2007–08. We estimate that the 2001–06 MOU resulted in correctional officers receiving general salary increases of
about 34 percent over this period, not including
merit salary increases, overtime, and other categories of compensation. These salary increases were
more than twice as much as the increases for the
average state employee over the same period.
Major Difficulties in the Administration’s
Relationship With the Union. Despite the significant compensation increases for Unit 6 members,
relations between the administration and CCPOA
appear to have soured significantly in recent
years, as described in
Figure 3
the text box on the next
General Salary Increases for Correctional Officers,
page. This poor relationHighway Patrol, and Other State Employees
ship manifests itself at the
2003-04 2004-05 2005-06 2006-07 2007-08
bargaining table. Several
a
b
c
accounts suggest that
Unit 6—Correctional Officers
6.8%
10.3%
8.4%
5.2%
5.0%
Unit 5—Highway Patrol
2.7
12.1
5.6
5.7d
6.1
when DPA and CCPOA
Most other employees
—
5.0
—
3.5
3.4
negotiators met to discuss
a Includes 3.1 percent pay raise—retroactive to 2005-06—awarded to correctional officers as a result of
a new MOU during 2006
a November 2006 arbitration decision.
b Includes 0.9 percent increase starting June 30, 2006 and a 4.3 percent increase starting July 1, 2006.
and 2007, little—if any—
c Proposed increase based on administration’s “last, best, and final offer” to officers’ union.
progress was made in
d Unit 5 members also received a 3.5 percent stipend beginning in 2006-07 as compensation for
pre- and post-shift activities that are compensable under federal law.
reaching agreement.

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Administration’s Last, Best, and Final Offer
Background
Incomplete Information on the Administration’s Offer. Talks between DPA and CCPOA
on a new MOU broke down in September 2007.
The administration now proposes that the Legislature approve funds needed to impose parts
of its last, best, and final offer to the union. In
addition, administration officials have stated that
they will ask the Legislature to approve statutory
changes to implement parts of this offer. (As of
the date this report was written, we had not seen

the text of these statutory proposals.) Figure 4
lists key provisions of the administration’s offer.
When the administration presented CCPOA
with its last, best, and final offer, DPA notified the Legislature and posted the hundreds of
sections of its offer on its Web site. The sections contain strikethroughs in the text denoting changes from the prior agreement or prior
administration offers. In addition, DPA posted a
list of the selected parts of its last, best, and final
offer that it was choosing to implement under the

A Completely Dysfunctional Relationship:
CCPOA and the Administration
Conflict Distracts Officials and Hampers Effectiveness of Government. In reviewing correctional officer personnel matters, we have been struck by the negative tone of the relationship between the leadership of the correctional officers’ union and the administration. Union
leaders regularly question administration officials’ honesty and competence. Administration
officials were unable to stimulate a productive discussion with the union to secure a successor agreement to the 2001–06 memorandum of understanding (MOU). Given the significant
challenges facing California’s prison system, this unproductive relationship hurts the state. Bad
labor relations make it more difficult to operate the California Department of Corrections and
Rehabilitation (CDCR). Grievances and arbitrations proliferate. Attention to the large backlog of
personnel matters and difficult contract negotiations distracts CDCR, Department of Personnel
Administration, and other officials from tending to other major issues in the prison system and
problems affecting the rest of the state workforce.
What Can the Legislature Do? The Legislature has broad, formal powers to address labor/
management issues. It created the Dills Act, which established that negotiated MOUs would be
a key vehicle for setting state personnel policy and gave state employee unions the privileges and
responsibilities that they have today. Before or after an MOU expires, the Legislature may approve
whatever pay and benefit changes it deems necessary. Still, fixing the relationship between a
union and the executive branch is difficult. Beyond their formal powers to legislate and conduct
oversight, Members of the Legislature probably will need to use their abilities to persuade in order
to convince both the administration and union officials to move to common ground.

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Dills Act. This display is confusing due to the lack
of a single, authoritative, easy–to–read document
listing all parts of the offer that the administration plans to implement. In addition, statutory
changes to implement the offer have not been
identified for the Legislature. We still have many
questions about what exactly the administration’s
offer means. Given these uncertainties, we rely
principally on the administration’s summaries of
its offer in describing its provisions below.
Fiscal Components of the
Administration’s Offer
Salaries. In September 2007, the administration announced its intent to implement 5 percent
annual salary increases for all Unit 6 members,
effective on July 1 of the years 2007, 2008, 2009,
subject to legislative approval. In December
2007, Public Employment Relations Board (PERB)
staff announced that it agreed with a CCPOA
complaint that the state’s implementation of the
last, best, and final offer over a full three–year
period (rather than a single year) would violate
the state collective bargaining law—apparently

by signaling that the state was no longer negotiating in good faith with the union. Following the
PERB staff’s announcement, DPA modified its
salary and other proposals and announced the
administration’s intent to seek their implementation for only one year at a time. Accordingly, the
administration has requested legislative approval
for a 5 percent salary increase for correctional
officers retroactive to July 1, 2007.
Health Benefits. Under the arbitrator’s November 2006 decision, Unit 6 members received
state contributions to their CalPERS health premiums during the latter years of the 2001–06 MOU
equal to 85 percent of the weighted average
employee premium costs of the four largest state
employee health plans and 80 percent of the additional average premium costs needed to cover
employee’s eligible dependents. (This is called
the “85/80 formula.”) Because CalPERS premiums increase each year, additional legislative
appropriations generally are required to maintain
benefits pursuant to the 85/80 formula. The administration proposes that the state make health
contributions for Unit 6 members equivalent to

Figure 4

Major Provisions of Administration's Last, Best, and Final Offer
To California Correctional Peace Officers Association
Compensation Increases
x Increase salaries 5 percent, retroactive to July 1, 2007.
x Increase state contributions to officers' health premiums in 2008.
x New bonus payment for officers who recruit a person who subsequently graduates from the academy.
x Increase recruitment and retention payments for officers at several institutions.
x Increase pay for officers who work night and weekend shifts.
x Increase uniform allowance for officers.
Other Parts of the Administration's Offer
x Reinstate parts of sick leave management program eliminated by prior agreement.
x More flexibility for department to assign personnel.
x Change grievance and arbitration procedures.

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the 85/80 formula in 2008, effective in the pay
period following approval of enabling legislation.
Other Compensation Increases. The administration’s offer would increase several other
categories of officers’ compensation. The offer
contains several measures to improve recruitment and retention. It proposes implementation
of a pilot program to provide a $2,000 bonus
payment to Unit 6 employees who recruit a
new correctional officer or youth correctional
officer who subsequently graduates from the
academy. The offer also would increase existing
recruitment and retention incentives for correctional officers at certain institutions. In addition,
it would increase night shift and weekend shift
differentials for officers, as well as their uniform
allowances.
Other Parts of the Administration’s Offer
In general, the non–fiscal components of the
administration’s offer seek to increase managers’
control over prison personnel policies.
Sick Leave. In September 2007, the administration announced that it would implement the
parts of its offer that reinstate elements of the
sick leave management program eliminated by
the 2001–06 MOU. The department would be
able to examine the frequency and use of sick
leave and take corrective or disciplinary action against abusers. The administration’s offer
eliminates the use of sick leave as “time worked”

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for purposes of calculating overtime, subject to
legislative approval.
More Flexibility in Assigning Personnel. The
offer would change “post and bid procedures”
and policies concerning employee–requested
transfers, generally allowing management additional flexibility in assigning employees. As
described elsewhere in this report, CDCR has reported making progress in increasing correctional staffing. Officials have requested the increased
flexibility in managing employee–requested
transfers by noting the continued high vacancy
rates in certain CDCR institutions. Some such
institutions reportedly are shunned by employees
as long–term assignments.
Grievance and Arbitration Procedures.
The administration has proposed changes that it
believes would simplify grievance and arbitration
procedures, clarify the authority of arbitrators,
and clamp down on what it perceives as abuses
of the process. In a letter to Unit 6 members in
September 2007, administration officials said that
under the terms of the last, best, and final offer
it was implementing, grievances on provisions
of the expired MOU were impermissible, but
grievances on “CDCR/DMH policies and health
and safety matters” would “continue to be processed.” Further, the letter stated that grievances
filed on or after September 18, 2007 will not go
to arbitration.

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LAO Comments
We review the administration’s pay and benefit offer and key issues related to correctional
officers below.
Administration’s Cost Estimates
for 2007–08 and 2008–09
Administration Cost Estimate for 2007–08
Would Be Slightly High. The administration has
proposed that the Legislature approve $260 million of additional 2007–08 expenditures to cover
costs of its proposed pay and benefit increases
for correctional officers, as well as their supervisors and managers. If the Legislature were to
approve the proposal, this estimate of the cost
of the administration’s offer in 2007–08 would
be slightly high. It assumes that health benefit
cost increases for Unit 6 members take effect on
January 1, 2008, while the administration’s summary of its offer makes clear the benefit increase
would take effect on the first day of the pay
period following approval of the enabling legislation by the Legislature. This would reduce the
cost estimate by a few million dollars per month
after January 1 until approval.
Cost Estimates Do Not Explicitly Address
Several Categories of Possible Costs. Consistent
with DPA‘s usual practice in estimating the cost
of employee pay increases, the administration’s
estimate of the costs of its CCPOA offer do not
address overtime costs explicitly. One goal of
the administration’s plan, however, is a reduction
of overtime costs. If CDCR successfully reduces
overtime hours, it is possible that the costs of the
offer would be less than estimated by the administration in 2008–09 and future years. Should
CDCR be unable to reduce overtime usage under
the plan, however, each hour of overtime worked

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would cost more due to the base pay increase.
Tens of millions of dollars of unbudgeted cost increases could result. In addition, in previous cost
estimates (before the administration withdrew the
second and third years of its offer in response
to the PERB complaint), DPA did not address
possible increases in overall correctional staffing costs that may result in future years from (1)
actions of the Receiver or (2) new prison facilities
authorized by Chapter 7, Statutes of 2007 (AB
900, Solorio). Most of these costs would materialize for the state under current law, regardless of
the Legislature’s actions concerning the last, best,
and final offer.
Administration’s Prisoner Release Plan
Would Reduce Ongoing Costs. The Governor’s
budget estimates that the reduction in CDCR
staffing resulting from the administration’s plan
to release certain non–violent inmates would reduce the ongoing costs of its proposed 2007–08
pay increases by $30 million per year beginning
in 2008–09. The ability to achieve this savings
would depend on the administration’s success in
implementing the release plan. We will address
this proposal in further detail in our Analysis of
the 2008–09 Budget Bill, which will be released
on February 20, 2008.
Litigation, Arbitration, and Grievances
May Increase Future Costs
Potentially Large Added Costs in the Future,
if Union Prevails. The state and CCPOA are
involved in several disputes that could lead to
increased state costs in the future. In the months
since talks broke down between the union and
DPA, CCPOA’s public statements have hinted
that the union may pursue litigation against the

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state related to federal and state labor laws. This
litigation—particularly cases related to federal
laws on wages, hours, work breaks, and other labor law exemptions the union agreed to provide
to the state in the past—may proceed regardless
of the Legislature’s action on the administration’s
offer. The potential state liability could be in the
hundreds of millions of dollars annually. While
the Legislature has the power to change state
labor laws prospectively to reduce these risks,
it has limited power to affect implementation of
federal labor laws.
Increased Staffing Is Helping to
Reduce the Correctional Officer
Vacancy Problem
High Vacancy Rates Have Been an Issue.
The 1986 statute on correctional officer compensation cited difficulties in recruiting and retaining
correctional officers. In recent years, CDCR’s
inability to fill authorized correctional officer positions—resulting in widespread vacancies—has
been a major issue. When there are significant
vacancies, prison overtime costs often increase,
and working conditions may deteriorate.
Significant Increase in Resources for Recruitment and Training. In the last several years,
the Legislature has appropriated tens of millions
of dollars to reopen CDCR’s basic correctional
officer academy after it was deactivated in 2004,
expand the academy, and increase the budget of
CDCR’s Office of Peace Officer Selection (OPOS).
Department Reports Major Progress in Hiring Efforts. Recently, the administration has reported making significant progress in increasing
correctional officer staffing. In a November 2007
report to the Legislature, CDCR reported that it
was on track to graduate about 1,575 graduates
from its correctional officer academies between
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July 2007 and December 2007. In this report, the
department projected that officer attrition during
these months would total just over 600. Accordingly, the net expected increase in correctional
officer staffing was about 1,000 over this period.
The CDCR estimated that its vacancies would
decline from about 2,800 at the beginning of
2007–08 to about 1,800 by the end of calendar
year 2007 (including estimates of what CDCR
terms its “unbudgeted positions” for correctional
officers, such as positions for emergency population issues). The department reports that further
reductions in vacancies appear likely in 2008.
Other Data Backs up the Department’s
Claims. Due to different data systems and definitions of positions, personnel data from various
sources—such as departments and the State
Controller’s Office (SCO)—generally do not
match exactly. Data from SCO, however, have
shown a general trend during the past year of
increasing staffing levels and declining vacancy
rates—similar to the data reported by CDCR.
The Evidence Suggests the Department Is
Making Progress. There have been disagreements about how to calculate the exact number
of officer vacancies. Representatives of the union
sometimes merge the issues of vacant positions
and overtime, reasoning that a significant portion
of overtime hours worked by officers results from
there being insufficient authorized levels of staffing. This approach suggests a higher number of
vacancies at any time.
We do not mean to suggest that CDCR has
solved its vacancy problem. Rather, after examining data presented from various sources and
considering the track record of CDCR in filling
its recent correctional officer academy classes,
we note the department’s success in expanding staffing at a time when prisoner population
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is essentially flat. Especially given the complex,
lengthy, and sometimes confusing hiring process
of CDCR and other state departments—described in the nearby text box—the department’s
progress in hiring officers is noteworthy. More
work on reducing vacancies may be needed
(especially if population levels remain stable or
increase), but no matter how one defines the vacancy problem, the department’s hiring success
helps to address it.
Additional Focus on Prisons With High
Vacancies May Be Needed. Officials told us that
OPOS prioritizes processing of applicants willing
to serve in “critical needs” prisons—those with a

Hiring Process Continues

to

10 percent or higher vacancy rate. When CDCR
presented us with information on the institutional
assignments given to graduates of three recent
correctional officer academy classes, however,
the data showed that a majority of these graduates—51 percent—were assigned to noncritical
needs institutions. (At least some of these assignments appear to have been directly or indirectly
related to requests from the Receiver for correctional officer staff related to prison medical care.)
Additional efforts to assign academy graduates to
the critical needs institutions may be needed to
reduce their vacancy rates and to sustain a lower
level of vacancies over time.

Be Lengthy

and

Complicated

Average Applicant Processing Time Said to Be Six Months. The Office of Peace Officer
Selection in the California Department of Corrections and Rehabilitation (CDCR) processes
around 10,000 applications per month. About 60 percent of applicants actually proceed to the
correctional officer employment examination. About 4 percent of initial applicants eventually
proceed to the correctional officer academy. According to CDCR, the average correctional
peace officer applicant processing time is about six months. The CDCR reports that applicants
agreeing to be assigned to critical needs institutions with significant vacancies currently are
processed first, and, therefore, other applicants may experience longer processing times. Background investigations and preemployment medical screenings have been blamed for much of
the time required, and the Legislature has appropriated additional resources to assist CDCR and
the State Personnel Board in reducing these delays. Nevertheless, these processes remain quite
complicated and lengthy, undoubtedly discouraging many qualified applicants from completing
the process and discouraging still others from applying in the first place. By decreasing the pool
of applicants, the slow process may unnecessarily increase compensation pressures.
Work Needs to Continue to Streamline Process. In today’s job environment, a hiring
process that takes six months or more is anachronistic. Such a hiring process—particularly a
lengthy one like CDCR’s that is confusing and complicated to many applicants—puts the state
at a distinct disadvantage compared with other employers. The length and complexity of the
hiring process, however, is not a problem isolated to CDCR. It is a statewide issue that the
administration has proposed addressing over the next decade through its Human Resources
Modernization Project.

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Overtime Is a Continuing Problem
Many Issues Contribute to CDCR’s Overtime Problem. In our Analysis of the 2004–05
Budget Bill (see page D–58), we discussed
CDCR’s large overtime costs, the major portion
of which was driven by correctional peace officer overtime. We found that high correctional
officer vacancy rates at some institutions contributed to the growth of CDCR’s overtime expenses. Recent data confirms this. When we examined 2006–07 personnel data, for example, we
found that institutions with higher vacancy rates
tended, on average, to spend more on overtime
per correctional officer. Yet, consistent with other
findings we made in the 2004–05 Analysis, not
all institutions follow this trend. This is because
there are many other factors that drive overtime
costs beyond than correctional officer vacancies.
These include institution–specific factors (such as
custody levels and assault incidents).
Overtime Is Going up—Not Down. Despite
the success that the administration reports in
reducing correctional officer vacancies, overtime
expenditures for Unit 6 members have continued
to go up—at least through the end of 2006–07.
Data from SCO indicate that overtime expenditures for Unit 6 members increased from
$402 million in 2005–06 to $471 million in
2006–07. Increased base wages—which drive
the hourly pay rate for employees working
overtime—contributed to this increase, but many
other factors probably contributed to the trend as
well, as discussed above. For example, medical
guarding and other costs resulting from actions of
the Receiver also have been significant. The data
suggest that there was not a strong relationship
between (1) institutions with increased correctional officer staffing during 2006–07 and (2)
declining overtime. Correctional officer staffing
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increased at nearly all major CDCR facilities, and
the majority of facilities also reported increased
overtime costs.
Officer Compensation Appears to
Be Sufficient for Now
Correctional Officer Pay and Benefit Levels
Are Very Attractive. In its successful advertising campaign to recruit entry–level correctional
officers, CDCR says that the job “has been called
‘the greatest entry level job in California’—and
for good reason.” “Along with the great salary,”
one of CDCR’s ads notes, “our peace officers
earn a retirement package you just can’t find in
private industry.” Some ads proclaim that “you
can earn more than $73,000 a year wearing one
of our uniforms.” While entry–level base salaries
are much less than this (as little as $3,774 per
month, not including pay differentials, overtime,
or benefits), overall compensation levels for correctional officers appear to be very attractive.
This is particularly true when considering that
educational requirements for most classifications of correctional peace officers consist of the
equivalent to completion of the 12th grade—for
example, a high school diploma or passing the
General Education Development test. Jobs offering comparable pay and benefits often require
college–level educations. Recently, about 80
percent of correctional officer cadets have had
only a high school education and/or no postsecondary degree.
Little Evidence That Officer Compensation
Is Too Low. For any particular job classification,
the “target” public employee compensation level
(including pay, health benefits, retirement benefits, and other benefits) should be the minimum
amount necessary to attract enough qualified
labor to fill authorized positions. With the adLegislative Analyst’s Office

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ministration reporting that it is filling academy
classes and graduating cadets much faster than
officers are leaving CDCR, it appears that current
compensation levels for correctional officers are
at least sufficient, if not more than sufficient, to
fill authorized positions. Should the Legislature
approve the administration’s proposals to cut
CDCR’s budget by reducing the inmate population and staffing, the labor market situation may

tip even more in CDCR’s favor. With less need
for the state to fill officer positions after a population reduction, there may be even less pressure
for higher salaries and benefits. On the other
hand, if AB 900 prison construction or actions of
the Receiver result in the need to hire additional
officers, new pressures could emerge for higher
compensation for officers in the future.

LAO Recommendations
Figure 5 summarizes our recommendations
concerning the administration’s offer to CCPOA
and related issues. Each is discussed further
below.

employee compensation levels should be those
needed to attract a sufficient number of qualified
workers that allow departments to operate in a
cost–efficient manner.

Do Not Reinstate the CCPOA
Pay Raise Formula

Do Not Increase Officer
Compensation in 2007–08

We agree with the administration that the
comparative pay methodology in the 2001–06
MOU—linking correctional officers’ pay levels
to those of CHP officers and local law enforcement—should not be reinstated. We discussed
this general recommendation to the Legislature
in The 2007–08 Budget: Perspectives and Issues
(P&I). “Autopilot” formulas should not drive
state employee compensation levels. Instead,

We find little evidence that correctional officer salaries are currently too low to allow the
state to meet its staffing needs. In fact, with significant numbers of correctional officers graduating from CDCR’s academy and officer staffing
levels increasing, the data suggest that current
compensation levels are sufficient, if not more
than sufficient, for the state to meet its staffing
needs. Accordingly, we recommend that the Legislature approve no
increases in comFigure 5
pensation for Unit
LAO Recommendations Concerning Administration’s Offer to
6 members during
California Correctional Peace Officers Association
2007–08. If the
Legislature rejects
x Do not reinstate the correctional officer autopilot pay formula.
all of the adminisx Do not increase officer compensation in 2007-08.
tration’s proposed
x Approve measures to increase managerial control.
x Take steps to curb authority of arbitrators.
pay, recruitment
x Hold hearings on the administration's offer and any future Unit 6 labor agreement.
differential, and
x Require publicly accessible reporting by CDCR on key personnel issues.
health benefit

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increases for 2007–08, this would result in $260
million of reduced state costs in 2007–08 and
a similar amount in 2008–09, compared to the
estimates included in the 2008–09 Governor’s
budget.
Approve Measures to
Increase Managerial Control
In general, the administration’s proposals
to reduce sick leave abuse, enhance CDCR’s
authority to assign personnel as needed, and
streamline grievance and arbitration processes
are sound. We generally agree with the administration’s point of view that improving the operations of the prison system requires a stronger
degree of managerial control. Strong managerial
authority will be necessary to implement prison
and parole system reforms, address orders of
the Receiver and the courts, contain overtime
expenses, reduce any sick leave abuse that may
persist in the department, and operate CDCR in
a cost–efficient manner. We recommend that
the Legislature approve measures to implement
parts of the administration’s offer that accomplish
these general goals.
Take Steps to Curb the
Authority of Arbitrators
We reiterate our recommendation in the
2007–08 P&I that the Legislature amend the
Dills Act or the state’s arbitration laws to limit
the authority of labor arbitrators to order large
payments without prior legislative approval.
While most arbitration decisions interpreting
MOUs and other personnel policies result in
minor costs for state departments, the November
2006 CCPOA arbitration was a notable exception. As we discussed in the P&I (see page 180),

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the arbitrator’s decision relied on information
not available to the Legislature at the time it
approved the 2001–06 MOU. Accordingly, the
power of arbitrators—even under the administration’s proposal—would still appear to undermine
legislative authority.
Hold Hearings on the Administration’s
Offer and Any Future Unit 6 MOU
In the P&I (see page 187), we recommended
that the Legislature convene joint hearings with
members of policy and fiscal committees to
consider the ramifications of certain proposed
MOUs prior to approving or rejecting the labor
agreements. We recommend that the Legislature
hold similar hearings on the administration’s proposed last, best, and final offer. We recommend
that the Legislature question both the administration and CCPOA leaders to determine what, if
any, sections of state and federal labor law might
be affected by the administration’s offer and the
viability of the administration’s proposals to address these issues. Should the Legislature approve
part or all of the administration’s proposal, implementing legislation should be carefully drafted to
minimize potential risks to the state concerning
any possible conflicts with state and federal labor
law.
Require Publicly Accessible Reporting
By CDCR on Key Personnel Issues
We recommend that the Legislature require
CDCR to post regular updates to its Web site
on its hiring, correctional officer vacancy rates,
and overtime usage at each institution (including
overtime usage by Unit 6 members and other
employees). Union leaders and others often
question the accuracy of such data from CDCR.
Posting the information clearly on a Web site
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would provide the Legislature, CCPOA, and the
public an opportunity to examine data and raise
questions. In the future, this information may

prove valuable to the Legislature in determining
when pay and benefits for correctional officers
need to be increased and by how much.

Conclusion
Correctional peace officers play an essential
role in the daily operations of the prisons, and
their pay and benefits represent a significant part
of the state’s General Fund spending. Accordingly, we recommend that the Legislature take an
active role in addressing various issues concern-

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ing correctional officers’ pay, benefits, and labor
relations. With the administration and CCPOA in
conflict, Members of the Legislature will need to
use their abilities to persuade in order to convince both sides to move to common ground.

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