The State Worker

Chronicling civil-service life for California state workers

February 28, 2012
State Compensation Insurance Fund OKs staff bonus program

Despite an unprecedented downsizing that has cut jobs and emptied out agency offices around California, the State Compensation Insurance Fund's board of directors has OK'd a new incentive bonus program for employees.

It's not clear how much this will cost State Fund, a quasi-private state agency that provides workers' compensation insurance to businesses, but employees could receive up to 10 percent of their base pay depending on how well they perform. None of the bonus money would come from tax dollars, since State Fund operates solely on policyholders' premiums and investments.

The board approved the Performance Award Program on Feb. 17, about seven weeks after 971 employees in danger of layoffs took an unprecedented severance package that paid them to leave by the end of last year and give up their preferential rights to other state government jobs. The so-called "transition packages" cost State Fund about $30 million.

Even after those employees left, another 700 fund jobs remained on the chopping block as part of a multiyear plan to save $200 million by axing outdated jobs, shuttering offices and consolidating operations.

We asked fund spokeswoman Jennifer Vargen how the new employee bonus program lined up with the agency's push to cut costs. She responded by forwarding an email to staff that explains the program as "an appropriate investment in strengthening and accelerating our transition to a performance-based culture." (Click here to read the entire email.)

The bonuses are contingent on negotiations with union representatives, according to the State Fund staff memo. Here's the board's agenda item concerning the new bonus program:
State Compensation Insurance Fund bonus item on BOD's Feb. 17 agenda

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About The State Worker

Jon Ortiz The Author

Jon Ortiz launched The State Worker blog and a companion column in 2008 to cover state government from the perspective of California government employees. Every day he filters the news through a single question: "What does this mean for state workers?" Join Ortiz for updates and debate on state pay, benefits, pensions, contracts and jobs. Contact him at (916) 321-1043 and at


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