CITY OF PHILADELPHIA HALTS EMPLOYEE PAY INCREASES

07/06/2009

MAYOR'S  OFFICE  OF  COMMUNICATIONS

Monday, July 6, 2009                                                    

FOR IMMEDIATE RELEASE

CITY OF PHILADELPHIA HALTS EMPLOYEE PAY INCREASES

Philadelphia, July 6, 2009 – Today the City of Philadelphia notified all union-represented and non-represented civil service employees that the City will not pay any salary increases, including pay step increases and increases in longevity payments.  These measures are expected to save the general fund up to an estimated $8 million this fiscal year.  

“This is a time of shared sacrifice for everyone in Philadelphia and around the country as double digit unemployment is predicted to continue to rise for another year,” said Mayor Michael A. Nutter.  “These measures will help us save jobs for City workers and preserve vital public services for our citizens.”

The collective bargaining agreement between the City of Philadelphia and the unions expired on June 30, 2009. To date no new agreement has been reached thus actions regarding unionized employees were taken to maintain the status quo as of June 30, 2009.

Based on their length of service with the City and their length of time in a particular job, employees may receive annual increases in their salary as they move through the “steps” in their pay plan.  Typically employees move from one step of the pay scale to the next on the anniversary of the day the employee was hired into that position.  Some employees also receive longevity payments based on their length of service with the City.  

Under the moves being announced and taking effect today, employees will not automatically move from one step to the next of the pay schedule and will remain at their current longevity level.  The payment of any pay step increases and longevity increases will be determined when a new collective bargaining agreement is reached through negotiations/interest arbitration with unions for unionized employees, or the Mayor declares that the City’s finances will permit the increases to be paid responsibly for non-represented employees.  Exempt employees will again take five furlough days this fiscal year and many exempt administration officials will take up to a 5% pay cut.                                                                                

This announcement comes as the City tackles an unprecedented financial crisis and has already announced a number of measures to reduce spending including a 10% pay cut for the Mayor and Chief of Staff; 5% pay cuts for senior administration officials; 5 furlough days last fiscal year and 5 furlough days this fiscal year for exempt employees earning over $50,000; together with other measures to reduce the size of the City’s fleet, freeze wage and business taxes, and crack down on delinquent tax payers.  

The City’s Five Year Plan assumes $125 million in savings from City employees through reasonable work rule changes and contributions to their own health and pension security.

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