BY STARRLA CRAY
WINSTED, MN Due to the recommendations of a recent compensation study, the pay structure for Winsted city employees is planned to change Jan. 1.
This will cost the city an additional $19,763 in 2016.
The wage increase for individual employees varies from 1.3 percent to 5.08 percent. In addition, employees are eligible for step increases Jan. 1, unless they are at the top of their pay scale.
At Tuesday’s city council work session, City Administrator Dan Tienter said he wouldn’t characterize both pay adjustments as “raises,” because “ultimately, the raises aren’t happening for the same reasons.”
He explained that the pay structure increase is recommended in order to help Winsted “maintain market competitiveness, while step increases are longevity and merit-based.
The Winsted City Council approved funding for the compensation study in December 2014.
Tienter noted that cities are required by the state to have “some kind of classification system” for pay equity purposes.
“How a city goes about accomplishing that is up to the city,” he said, explaining that a compensation study is the most common way to fulfill this requirement.
According to Minnesota Management & Budget (MMB), a government agency that handles labor relations, “state law requires all public jurisdictions such as cities, counties, and school districts to eliminate any sex-based wage inequities in compensation and submit reports to MMB.”
Pay equity is a method of eliminating discrimination against women who are paid less than men for jobs requiring comparable levels of expertise. Jobs are given “points” so that positions typically held by men can be evaluated against jobs primarily held by women.
The MMB website notes that “pay equity laws in Minnesota address only sex-based wage disparities and not all types of wage disparities. Pay equity does not replace collective bargaining and does not address all compensation issues.”
In addition to pay equity, Winsted’s compensation study focused on external market competition and job specific requirements/responsibilities.
The study used a variety of methods to determine job classification and compensation.
First, city staff completed lengthy questionnaires designed to analyze job duties. From these, Flaherty & Hood, P.A. (a law firm that focuses its representation on cities in the state of Minnesota) revised each job description to better reflect current duties. The law firm then rated each position and evaluated internal pay equity.
After that, Flaherty & Hood conducted a market survey to see how Winsted’s compensation compares with that of 12 other cities in the area. The list of cities was considered “non-public” information and was not made available at the meeting.
As a result of the study, a $16,213 increase in the total compensation plan was recommended for all employees. This change also increases the city’s required contributions to Public Employee Retirement Association of Minnesota (PERA) and Federal Insurance Contributions Act (FICA), bringing the total to $19,763.
City staff also recommended a 1-percent across-the-board increase, but council consensus was to forgo this recommendation.
During Tuesday’s work session, council members asked Lucas Golliet, a human resources analyst with Flaherty & Hood, where Winsted fell compared to other cities in the study.
“I think Winsted was fairly competitive,” Golliet said, adding that there was room for adjustment, however.
Compared to the median, he said “individual positions are above and below.”
Council Member Max Fasching asked what would happen if the council chose not to implement the recommended pay structure increase.
“If we don’t go ahead with any of it, are we still within the law?” he asked.
“I would have to run the numbers through the test,” Golliet responded. “The proposed structure is compliant, but we didn’t look at the initial pay structure.”
Under the new pay structure, annual wages would range from $28,700 (for an entry-level administrative assistant) to $82,950 (for a city administrator who has 10 years of experience).
The city council will be discussing the 2016 budget at a special meeting Tuesday, Dec. 8 at 4 p.m., and it will be finalized at the Tuesday, Dec. 15 meeting.
The recommended increase in pay structure is about $7,000 less than what was originally budgeted for in 2016.