Arbitrator sides with SEBAC on pandemic pay: $45 million

An arbitrator has sided with the State Employees Bargaining Agent Coalition (SEBAC) in determining the amount of pandemic pay to award state employees who continued to work on-site throughout the pandemic, boosting the total payout from the budgeted $35 million to $45 million, according to the decision.

The State of Connecticut and SEBAC both agreed that state employees who were not able to work from home during the pandemic, including Department of Correction and state hospital employees, should receive a pandemic payout, but disagreed on how the payments would be structured and the overall size of the payments, and the two parties went to arbitration.

Lawmakers budgeted $35 million in American Rescue Plan dollars for state employee pandemic pay. According to the arbitration decision, the state increased its offering to more than $40 million as its last best offer, but changed the structure of how the individual payouts would be determined. The union’s last best offer was more than $45 million.

The difference hinged on the size of payments made to high-risk employees who could not work from home at all and lower-risk employees who were able to work from home some of the days and consideration for the number of overtime hours worked, changes the state had made to its offer in August of 2022. 

However, the arbitrator sided with the union for its last best offer after factoring in pandemic payments made to private sector employees in Connecticut, wage increases negotiated by SEBAC and approved by the legislature in 2022, cost of living increases, interests and welfare of the employees and the state’s ability to pay.

“The State took measures to increase to the extent that it was able the safety of these employees, including access to PPE, the availability of lodging to protect their families, insurance and on-site testing,” wrote arbitrator Susan Meredith. “In spite of these measures, many employees suffered greatly both physically and mentally. Providing pandemic pay as generously as possible reflects the gratitude and recognition that will increase the welfare of these employees.”

According to the decision, the pandemic payments to state employees will be larger than the $1,000 payments made to private sector workers under the state’s Premium Pay program, which has a much larger pool of potential recipients and is administered by the State Comptroller’s Office. 

Under the Premium Pay program, which required more money than the $30 million originally budgeted, private sector essential employees, including grocery store workers, would be eligible to receive up to $1,000 bonuses for their work during the pandemic. The size of the program, however, was increased to $105 million by the legislature in order to meet demand and make payments more aligned with what lawmakers had envisioned.

In looking at other states, Meredith noted that neither New York nor Rhode Island issued any kind of premium pay to employees, but Massachusetts, New Hampshire and Maine all provided premium pay equal to, or in most cases, higher than what Connecticut will likely pay out under the decision.

The State argued for its last best offer by pointing out that state employees had recently received pay raises and bonuses under SEBAC’s latest wage contracts, a $1.9 billion deal approved by the legislature in 2022, however Meredith concluded the issues were two separate matters and that pandemic pay “does not affect the overall compensation of these employees except as a one-time payment which reflects the hardship and risks these employees took on during the pandemic emergency.”

Finally, the state’s ability to pay was considered and, after noting the state is expecting budget surpluses for the foreseeable future, and considering ARPA funds provided by the federal government, the arbitrator determined the $5.2 million difference between the two parties favored the coalition’s last best offer, noting that $28.9 million in lapsed funds were also available to support state employee and National Guard premium pay.

The arbitration decision will have to go before the General Assembly for approval.

“We are hopeful that this ruling will serve as a reminder to other employers, both in the private and municipal sectors, that they should be honoring their frontline essential workers in a similar manner,” wrote Drew Phalen on SEBAC’s website. “In the coming weeks, we look forward to this award being brought to the General Assembly for final approval.”