The State Worker

Chronicling civil-service life for California state workers

April 23, 2012
California state insurance agency cancels layoff plans

Thumbnail image for 100727 rowe.JPGHundreds of state jobs that were on the chopping block have been spared, according to an e-mail sent to State Compensation Insurance Fund employees this morning.

State Fund President and CEO Tom Rowe's message to staff said that 1,300 workers have left since last fall's announcement that the quasi-public agency would shed between 1,500 and 1,800 jobs.

"The number of positions that remain in the restructure plan is now small enough that we have decided to cancel the layoff," Rowe wrote in the e-mail that went out this morning.

In response to a massive market-share loss in California's workers' compensation business, State Fund has closed offices and axed positions. After announcing the layoffs last October, the fund decided to offer "transition payments" -- severance packages -- for employees who left on their own by year's end and renounced their civil service return rights.

The payments went to 971 employees and cost $30 million. In February, the State Fund board approved a new incentive bonus program for employees.

With $20 billion in assets, State Compensation Insurance Fund is a non-profit enterprise that provides insurance to business. Although it employs state workers, it operates solely on policyholders' premiums and returns on investments, not taxpayer dollars.

Here's Rowe's e-mail, unedtited:

From: Tom Rowe
Sent: Monday, April 23, 2012 11:22 AM
To: SCIF All State Fund Employee
Subject: Layoff Update

Dear Colleagues:

Last fall we announced we would layoff 1500 to 1800 employees to reduce significant overstaffing in certain classifications. With the Board's full support, we committed to provide assistance to affected employees. Through the combined efforts of the DPA, our HR team and SEIU we were able to offer affected employees tools and active support during this layoff period. The combined impact of access to SROA and Surplus status, job fairs, job search, resume writing classes, and transition payments (a first in civil service), have resulted in more than 1300 employees transitioning out of State Fund.

The number of positions that remain in the restructure plan is now small enough that we have decided to cancel the layoff. This allows all of us to refocus on the future, and avoid the disruption associated with bumping, demotions, and retraining that are the routine elements of a layoff process in California's civil service structure.

This has been a difficult but necessary process for State Fund. We have had to say good-bye to colleagues and face the challenge of improving productivity within our departments. While painful, these actions are appropriate, necessary steps and position us well to effectively fulfill our mission helping California employers manage the cost of insurance, while delivering quality services to injured workers.

We will expand the Talent Retention Program (TRP) to manage the overstaffs that result from canceling the layoff. Additional information about that process will follow shortly.

I thank you for your commitment to State Fund and look to the future as we build an even stronger company dedicated to serving California.


Tom Rowe
President and CEO

PHOTO: Tom Rowe / courtesy State Compensation Insurance Fund

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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 jortiz@sacbee.com.

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