Responses to the Audit
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Fresno County
May 6, 2016
Elaine M. Howle, CPA
California State Auditor
621 Capitol Mall, Suite 1200
Sacramento, CA 95814
RE: State Audit Report — County Pay Practices
Dear Ms. Howle,
On behalf of the County of Fresno, this letter provides a response to the draft, redacted State Audit report titled, “County Pay Practices: Although The Counties We Visited Have Rules in Place to Ensure Fairness, Data, Show That a Gender Wage Gap Still Exists.”
As stated in the report, the County of Fresno operates under a comprehensive merit system based personnel administration program, which conforms to California Local Agency Personnel Standards (LAPS). Therefore, we were not surprised that the Auditors found that the County of Fresno’s policies and procedures were being followed in regards to the selection and salary setting of employees and that there were no instances of discrimination found in the selection of employees or salary-setting decisions. The County has always been, and will continue to be, focused on selecting the best candidate for any particular position, without regard to gender, race, religion, age, ethnicity, or any other non-job-related factor.
Prior to this audit, the County had begun the process of reviewing and amending, where appropriate, our Personnel Rules/Procedures to ensure compliance with State and Federal laws and regulations, best management practices, and internal changes to procedures. As a result of the approval of Senate Bill No. 358 in 2015, which amended the California Equal Pay Act, as well as this State Audit, we have focused our immediate review on refinements to our rules/procedures, including pay provisions and practices which will help us monitor and ensure that we are in compliance with State law and continue to provide a workplace free of discrimination.
Within the draft report there was one area that the County felt should be referenced in the data is the impact of the California Public Employees’ Retirement Act (PEPRA) on total compensation. This statewide law, which impacted almost all public agencies within California, implemented a mandatory lower defined pension benefit and required all new employees to pay half of the normal retirement contribution rate. This requirement has a direct impact on total compensation and will discount meaningful strides that California public agencies may be making in the hiring and compensation of women in the workforce. The County recommends that this fact be acknowledged or referenced in the report.
We appreciate and will further evaluate the recommendations for Counties to consider upon release of the full report, however, upon review of the draft report we have a practical concern related to one of the recommendations. Specifically, while the County of Fresno understands the rationale behind the recommendation that Counties should develop policies requiring hiring managers to document the reasons why they chose the selected candidate over others, we are concerned about potential unintended consequences should this become a State mandate. The draft audit report recommends additional documentation that would protect Counties from liability if a hiring decision were challenged. However, State mandated reporting of adverse comments concerning unsuccessful applicants could also increase the potential liability of an employer. As acknowledged in the report, the County of Fresno’s rules and procedures prohibit discriminatory practices and require maintenance of selection documents. We will be discussing and researching this recommendation further within our County, including operational and cost-benefit analysis, and look forward to reviewing the best practice policy of the currently unidentified County mentioned in the draft report which may help alleviate the concern.
Finally, we understand and agree with the recommendation regarding developing better tracking mechanisms for monitoring gender-based pay equity complaints and will be working on updating our complaint process to allow for more readily available identification of these types of complaints. Ultimately, we understand that the report may include specific recommendations to the Legislature regarding additional legislation or changes to State regulations; the County of Fresno will provide input through that legislative process.
We appreciate the professionalism of your audit team and look forward to seeing the final report. Please let us know if you have any questions or need any additional information.
Sincerely,
Jean M. Rousseau
County Administrative Officer
cc: Ralph Flynn, State Audit Team Leader
County of Fresno Board of Supervisors
Paul Nerland, Director of Personnel Services
Comment
CALIFORNIA STATE AUDITOR’S COMMENTS ON THE RESPONSE FROM FRESNO COUNTY
To provide clarity and perspective, we are commenting on Fresno County’s response to the audit. The numbers below correspond to the numbers we have placed in the margin of its response.
Fresno County recommends that we add additional text to highlight the effect of the California Public Employees’ Retirement Act. We have not changed our report’s text in response to this suggestion. Our report already identifies a number of factors that can result in pay disparities between employees working in the same job classification. For example, here we state that differences in pay can be the result of each employee having different starting salaries, which can be influenced by earnings in a previous county job; having different lengths of time working in the same job; and having differences with respect to full-time versus part-time employment status.
Fresno County is concerned with our recommendation that it require its hiring managers to document the reasons why they chose the selected candidate over others who were also qualified, stating that to do so could increase its potential liability. We believe the county’s concerns lack merit and that it has misinterpreted our recommendation. Our recommendation does not, as stated in Fresno County’s response, require “state mandated reporting” of adverse comments concerning unsuccessful applicants. Instead, we simply recommend that county officials document how they reached their hiring decisions. As we state here, understanding each county’s hiring rationale is critical to evaluating whether county employers are treating men and women equally by basing selection decisions on objective and job-related criteria. Counties that make hiring decisions appropriately under the law should not be concerned that the bases for such decisions are documented and subject to scrutiny.
Los Angeles County
May 5, 2016
Elaine Howle, State Auditor
621 Capitol Mall, Suite 1200
Sacramento, CA 95814
Dear Ms. Howle,
Attached is the response from the County of Los Angeles to the draft audit report, titled “County Pay Practices: Although The Counties We Visited Have Rules in Place to Ensure Fairness, Data Show That a Gender Wage Gap Still Exists.” As stated in our response, Los Angeles County is committed to gender pay equity and equal opportunity for all. Further, we endeavor to consistently apply an equitable and merit-based approach in our recruitments, hirings, and promotions.
I commend your team for the professionalism it displayed during this audit and for the timely responses provided to our inquiries.
Should you have any questions, please contact me at (213) 974-1101, or you may contact Lisa M. Garrett, Director of Personnel, at (213) 974-2406.
Sincerely,
SACHI A. HAMAI
Chief Executive Officer
SAH:LG:md
Attachment
c: Each Supervisor
Lori Glasgow, Executive Officer
Mary Wickham, County Counsel
Lisa Garrett, Director of Personnel
Grant Parks, Audit Principal, California State Auditor
May 5, 2016
Los Angeles County submits this response to the recommendations and statements made in the draft audit report 2015-132.
Overview of the Report
Los Angeles County ("County") is committed to gender pay equity and equal opportunity. The draft audit report found no evidence of gender discrimination pertaining to employee pay in the County. When comparing same jobs or jobs with similar total compensation, the draft audit report cited that generally four percent or less wage gap existed between male and female which is indicative of Los Angeles County’s strong commitment to gender pay equity. The County’s Civil Service Rules and personnel and salary ordinance prohibit wage discrimination and provide employees with various protections. Employee compensation is established and applied within strict policy parameters in a gender-neutral manner.
The County strives for an equitable approach in recruitments and promotions, and we will continue to examine our practices to ensure a fair and impartial process.
Response to Recommendations Made to All Audited Counties
1. Recommendation: To ensure that it can consistently demonstrate that candidates are hired for permanent, civil service positions based on valid and job-related criteria, regardless of their sex, each county should develop policies requiring hiring managers to document the reasons why they chose the selected candidate over others from the certified eligibility list.
County of Los Angeles Response: Los Angeles County's current hiring process requires a plethora of documentation such as a job candidate's skills and qualifications (e.g., work history, skills, education, certifications, and training). The County also requires documentation of candidates’ qualifications and performance during the assessment process. The County believes that the required documents provide clear evidence that selections are based on valid and job-related criteria and collectively, they provide our appointing authorities with sufficient information to articulate the reason for the selection of a particular candidate. Additionally, the County affords candidates with an appeal process to ensure that the hiring selections are fair and merit-based.
2. Recommendation: To ensure it can readily monitor gender-based pay equity complaints and reliably evaluate how often such complaints are filed by its employees, each county should develop tracking mechanisms that allow management to reliably determine how often these complaints occur and whether there are patterns of complaints that pertain to specific county departments or classifications.
County of Los Angeles Response: Los Angeles County agrees and will take steps to implement this recommendation. The County will immediately enhance its existing databases and begin tracking gender-related pay and promotional complaints.
Response to Statement Regarding the County of Los Angeles
Statement: Under the heading, For the Few Cases We Identified, Counties Often Found Gender-Based Pay Equity Complaints Lacked Merit, But It Is Unclear How Often Employees File Such Complaints, the draft audit report states that "on average, the [C]ounty took just over a year (370 days) from the date the employee filed a complaint [for County Policy of Equity (CPOE) violation] until its County Equity Oversight Panel resolved the complaint through a formal resolution." For perspective, the federal Equal Employment Opportunity Commission was cited as taking an average of 10 months to investigate and resolve a complaint.
County of Los Angeles Response: The County CPOE Program is unique in that the basis for filing an equity complaint is expanded. CPOE may be violated when an individual engages in inappropriate conduct toward others based on a protected status (also known as “ICTO”) and when a supervisor fails to report conduct that may violate the CPOE. The “ICTO” standard maintains a lower threshold than the severe or pervasive requirement under Federal and State law. As a result, the County of Los Angeles has a high volume of complaints that requires more investigations.
The draft audit report also notes that it took an average of eight months for the County Equity Investigations Unit to complete an investigation. In an effort to address the high numbers of investigations and reduce the investigation cycle time, the County has implemented the following strategies:
- Increased the number of investigators: in 2011, there were 18 investigators and as of 2016, there are 35 investigators;
- Established investigative teams to focus on aging cases;
- Published a solicitation to establish a panel of contractors to assist with equity investigations, as needed.
The implemented strategies listed above have started to yield positive results. In May 2016, DHR intends to request additional investigator positions. The County believes that these strategies will continue to improve the investigative process, including the average investigation cycle time.
Comment
CALIFORNIA STATE AUDITOR’S COMMENT ON THE RESPONSE FROM LOS ANGELES COUNTY
To provide clarity and perspective, we are commenting on Los Angeles County’s response to the audit. The number below corresponds to the number we have placed in the margin of its response.
Los Angeles County is concerned with our recommendation that it require its hiring managers to document the reasons why they chose the selected candidate over others who were also qualified, stating that its current processes already result in sufficient documentation of the hiring decision. We disagree. As we state here, Los Angeles County’s merit system rules do not require that hiring managers document their rationale for selecting a particular individual over other eligible candidates from a certified eligibility list and thus we could not evaluate 41 of the 51 hiring decisions we reviewed at the county. As we state here, understanding each county’s hiring rationale is critical to evaluating whether county employers are treating men and women equally by basing selection decisions on objective and job-related criteria.
Orange County
May 6, 2016
Elaine M. Howle, CPA
State Auditor
621 Capitol Mall, Suite 1200
Sacramento, CA 95814
Dear Ms. Howle:
The County of Orange submits this response to the recommendations made in the draft audit report 2015-132, titled “County Pay Practices: Although The Counties We Visited Have Rules in Place to Ensure Fairness, Data Show That a Gender Wage Gap Still Exists.”
The County of Orange (County) is committed to non-discrimination and equal employment opportunity including gender-based pay equity. The draft report found that the County adhered to merit selection rules and negotiated Memoranda of Understanding, as well as the process to investigate complaints. The draft report results show that the County has the lowest average percentage difference in average total compensation between full-time female and male employees of the four counties reviewed.
In response to the draft audit report recommendations the County provides the following:
Recommendation 1: To ensure that it can consistently demonstrate that candidates are hired for permanent, civil service positions based on valid and job-related criteria, regardless of their sex, each county should develop policies requiring hiring managers to document the reasons why they chose the selected candidates over others from the certified eligibility list.
Response 1: The County will explore best practices for documenting selection decisions, including those of the county identified in the report, and evaluate whether any of the practices identified would be appropriate to implement in our County’s selection process to ensure that hiring decisions are based on valid and job-related reasons.
Recommendation 2: To ensure it can readily monitor gender-based pay equity complaints and reliably evaluate how often such complaints are filed by its employees, each county should develop tracking mechanisms that allow managers to reliably determine how often these complaints occur and whether there are patterns of complaints that pertain to specific county departments or classifications.
Response 2: The County currently tracks all complaints by several categories including BASIS (gender/sex) and ISSUE (pay, promotion, hiring). The County plans to immediately review its Discrimination/Retaliation Complaint form and determine if changes to the form could be made that would enable the County to better track alleged discrimination based on gender-based pay equity, e.g., Equal Pay/Compensation.
The County of Orange will provide a more detailed reply at the end of the 60 day response period.
Regards,
Terri Bruner
Interim Chief Human Resources Officer
Human Resource Services
Comment
CALIFORNIA STATE AUDITOR’S COMMENT ON THE RESPONSE FROM ORANGE COUNTY
To provide clarity and perspective, we are commenting on Orange County’s response to the audit. The number below corresponds to the number we have placed in the margin of its response.
Orange County’s response claims that it has the lowest average percentage difference in average total compensation between full-time female and male employees of the four counties reviewed. We disagree with Orange County’s interpretation of our audit’s results. In our view, the data from Table 4 shows that Orange County was comparable to the other three counties in terms of the average total compensation for men and women in low to highly compensated job classifications. Further, the data in Table 2 makes it clear that, because all four counties have different numbers of job classifications occupied by both men and women, it cannot be used by itself to compare county performance since all four counties have different numbers of job classifications that are occupied with both male and female employees.
Santa Clara County
May 6, 2016
Elaine M. Howle, State Auditor
California State Auditor
621 Capitol Mall, Suite 1200
Sacramento, CA 95814
Dear Ms. Howle:
Please accept this letter as the County of Santa Clara’s response to the California State Auditor’s report entitled, “County Pay Practices: Although the Counties We Visited Have Rules in Place to Ensure Fairness, Data Show that a Gender Wage Gap Still Exists.” This audit was conducted at the direction of the Joint Legislative Audit Committee of the California Legislature.
Within the section of the report entitled, “AUDIT RESULTS,” under the subheading, “Counties Applied Some Aspects of Their Hiring and Promotions Processes Equally, but Their Rationales for Selecting Successful Candidates Remain Unclear,” there is a discussion of 41 out of 195 classified positions for which counties did not follow a competitive process and not doing so was consistent with policies and procedures. The County of Santa Clara is cited as having a policy by which competition for certain classified positions is not needed for promotions that are within a series of related classifications (or positions). The policy to which this refers concerns “alternately staffed” positions, which are defined as a series of two or more related classifications treated as a single classification in the salary ordinance, with the appointing authority allowed a choice in filling the position from any of the listed alternatives. Alternately staffed promotions are defined as the advancement of a continuing incumbent in a coded position to a classification in the series in a higher salary range, in which advancement is attained based upon the incumbent’s ability to meet the qualifications for the higher classification. Promotions in alternately staffed positions are not competitive because the position is already filled (i.e., with an individual hired as a Program Manager I, for example). Because the position is not vacant, a promotion to the Program Manager II level is based upon the incumbent’s ability to meet the qualifications for the Program Manager II. In these situations, there is no need for a competitive process.
In the section entitled, “Counties’ Salary-Setting Decisions Complied with County Policies, but Factors Other Than Employees’ Abilities Can Influence Salary Levels,” the report states that the salary amount could be the result of negotiations and thus could not be explained. While this may be true for new hires, the example used is for existing staff, and in this situation, there is little to no discretion, so that negotiations would not be the cause of any discrepancy. For existing staff, the County of Santa Clara adheres to a “10% promotional rule,” which means that current employees must be placed within a broad range class according to specific guidelines. For salary placement of existing employees at the County of Santa Clara, there are specific rules that dictate where they are placed in the broad range.
The following are the two recommendations of the audit report:
To ensure that it can consistently demonstrate that candidates are hired for permanent, civil service positions based on valid and job-related criteria, regardless of their sex, each county should develop policies requiring hiring managers to document the reasons why they chose the selected candidate over others from the certified eligibility list.
To ensure it can readily monitor gender-based pay equity complaints and reliably evaluate how often such complaints are filed by its employees, each county should develop tracking mechanisms that allow management to reliably determine how often these complaints occur and whether there are patterns of complaints that pertain to specific county departments or classifications.
County of Santa Clara Response:
As noted by the report, the County already requires hiring managers to provide the reasons why one candidate is selected over others from the certified eligibility list. In fact, the report cites Santa Clara County’s policies in this regard as establishing a best practice to limit counties’ risk against claims that the decision to hire an individual (or not to hire others) was the result of a discriminatory employment practice.
The County of Santa Clara currently tracks all complaints of discrimination made by applicants and current employees to the County’s Equal Opportunity Department (EOD). EOD also reviews whether patterns of complaints occur and whether there are patterns of complaints that pertain to specific county departments or classifications. To the extent that there is a need for additional tracking of pay equity complaints, the County will review and make changes to its tracking process as appropriate.
We would like to thank the California State Auditor for the thoughtful work on this report. If you have any questions, please do not hesitate to contact me via phone at (408) 299-5828 or via email at john.mills@esa.sccgov.org.
Sincerely,
John P. Mills
Deputy County Executive/
Director, Employee Services Agency
Comment
CALIFORNIA STATE AUDITOR’S COMMENTS ON THE RESPONSE FROM SANTA CLARA COUNTY
To provide clarity and perspective, we are commenting on Santa Clara County’s response to the audit. The numbers below correspond to the numbers we have placed in the margin of its response.
Santa Clara County’s comments provide an example of a situation in which there was no need for a competitive hiring process. We are uncertain about why Santa Clara County chose to raise this issue in its response since, as we note here in our audit report, its decisions to exempt certain hiring decisions from competition appeared appropriate based on its policies.
Santa Clara County’s response clarifies that existing county employees who promote into a position with a broad salary range are subject to a “10% promotional rule,” thus salary placement for these employees is based on specific county guidelines. The county’s response does not specify which rule or guideline it is referring to in its response. During the audit, our review of the county’s salary ordinance found a “10 percent rule” for classified employees (those who are covered by the county’s merit system rules), but no such rule for employees entering unclassified service. Further, our discussion with the county’s executive recruitment services manager confirmed that executive positions in a broad range salary system are negotiated informally and that she was working toward developing practices and procedures to better document the salary setting process and justify an employee’s salary offer.
Santa Clara County’s response implies there may not be a need for it to better track pay equity complaints. We disagree. As we state here, three of the four counties we visited—including Santa Clara County—provided us with various lists of complaints that each covered different time periods or types of complaints, or that were maintained by different county officials. At Santa Clara County, we obtained four different tracking spreadsheets. Our recommendation is intended to ensure that county managers can readily determine how often employees file gender-based equity complaints, and determine whether there are patterns of complaints that pertain to specific county departments or job classifications.