SEC can implement new pay raise plan, panel rules

Employees at the Securities and Exchange Commission can continue to use a new pay system implemented earlier this year over the objections of the union that represents agency employees, the Federal Service Impasses Panel has ruled.

The panel's Nov. 8 decision temporarily settled a six-month-long feud between the agency and the National Treasury Employees Union about how to structure the agency's new parity pay plan. NTEU, which represents about 2,000 SEC employees, had argued that under the SEC's plan, 60 percent of a $25 million special pay raise pool would go to managers and other nonunion employees, even though they make up only 40 percent of the workforce.

But in its ruling, the panel noted that under the plan, "the average pay increase for all employees at SEC was 14.18 percent."

However, the panel agreed to let the two sides go back to the table and negotiate the pay issue if the SEC's fiscal 2003 budget falls short of what the agency needs to fund the pay hikes. An SEC spokesman was confident that the agency would get enough money during the budget process to pay for the raises.

"Once the fiscal 2003 appropriations bill is final, either side can move to reopen this, but we don't think there is going to be an issue with the funding," said SEC spokesman Brian Gross.

The SEC implemented its new pay parity plan in May, after convincing Congress five months earlier to give it the authority to create its own pay system. SEC officials argued that they needed such a system because they were losing key employees to the private sector and to other federal agencies, such as the Federal Deposit Insurance Corporation and the Treasury Department's Office of the Comptroller of the Currency. Those agencies offer higher salaries than the SEC does for similar work.

Union and SEC officials haggled over how to structure the new plan and after hitting an impasse, SEC moved forward and implemented its own system. The NTEU asked the Federal Service Impasses Panel to step in and resolve the dispute. The NTEU and SEC each submitted final offers to the panel, but the union rejected the modified plan offered by agency officials.

On Friday, NTEU President Colleen Kelley said the panel's decision did not close the door on the issue, and that the union will reopen negotiations after the SEC's 2003 budget is approved.

Another round of bargaining "will be an opportunity for us to negotiate not just higher pay for employees, but to work to implement congressional intent that SEC employees be paid on a par with those of other federal financial regulatory agencies," Kelley said.