FOR IMMEDIATE RELEASE: August 30, 2016
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Insourcing Agreement Reached after two year dispute; Measure to Raise Standards for UC Contractors Expected to Clear State Legislature this week
Oakland: Late yesterday, UCSF Medical Center and AFSCME Local 3299 reached an agreement for UCSF to hire 24 former Contract custodians at UCSF Medical Center. The workers, primarily Chinese immigrants who had been employed by former UCSF Contractor IMPEC Group for as long as four years, had been fired in 2015 after UCSF demanded that IMPEC cut their wages by almost 50% and the workers spoke up for better working conditions.
UCSF finally agreed to bring the workers back after a nearly two year campaign that saw the Public Employment Relations Board issue a complaint against UCSF for illegal retaliation. A public outcry ensued, with the San Francisco Board of Supervisors, Members of the Legislature, and other community leaders calling on UCSF to take corrective action.
“Both for two years as a low wage contractor at UCSF, and in the eighteen months since I was fired for speaking up for better pay and working conditions, I’ve struggled to find a way to provide food, shelter, and healthcare for my daughter,” said Irene Su, one of the affected workers. “Being able to provide these most basic of needs–things many people might take for granted—is what this agreement means for our families. We are deeply grateful to the many UC workers, students, elected officials, and community groups who have stood with us these past several years, and stood up for the basic dignity and respect that all UC workers deserve.”
The workers, who were making minimum wage ($10.74/hour) when they were fired, will now be employed directly by UCSF—making $17.52/hour plus health and retirement benefits. UCSF will distribute formal offer letters to the workers over the next 15 days.
“This agreement is an important victory that offers a ladder out of poverty for UCSF’s former IMPEC Group custodians and their families,” said AFSCME Local 3299 President Kathryn Lybarger. “But because UC Contractors are encouraged to pay rock bottom wages with no benefits in order to win bids, a growing number of other UC workers–thousands of immigrants and people of color–are dealing with similar problems, right now.”
UC has told the Legislature that it has outsourced thousands of full-time service, patient care and clerical jobs to private companies that pay rock bottom wages with few-if any-benefits. Yet UC has acknowledged that hiring all of the contract workers directly would cost as much as $50 million less than the system currently spends on these services, because low-wage contractors take a 40% cut off the top for overhead and profit.[i]
According to research from UC Berkeley’s Labor Center, low wage contract (also known as “contingent”) and temporary workers are twice as likely to live in poverty and rely on MediCaid and Food Stamps.
SB 959 (Lara), which is expected to clear the State Legislature this week, would require many UC Service, Clerical and Patient Care Contractors to provide their UC-assigned workers total compensation (wages and benefits) that are comparable to directly employed UC workers doing the same jobs. It would also require these companies to certify compliance with state labor laws as a condition of winning project bids.
Existing state law already requires similar standards for state service contractors[ii], k-12 contractors[iii], and California Community College contractors[iv]. In fact, these laws are far more rigorous than SB 959, placing substantial limits on what types of services may be outsourced to private companies. SB 959 includes no such limits.
“Large, tax-exempt public institutions should not be taking advantage of contingent immigrant workers, nor be growing the ranks of California’s working poor that rely on Medi-Cal,” said Assemblymember David Chiu (D-San Francisco). “This is not an acceptable practice at public hospitals like UCSF, where full-time contract workers are denied the employer health coverage they would need to take their kids to see a doctor where they work.”
The insourcing agreement for UCSF’s low-wage custodial contractors comes just weeks after UCSF Medical Center CEO Mark Laret, already the 9th highest paid employee in the entire UC system, received a 5% pay raise–boosting his annual base salary well over $1 million per year. Like former UC Davis Chancellor Linda Katehi, Laret has also faced a firestorm of criticism for apparent conflicts of interest–receiving an additional $556,000 per year (on average) from serving on the boards of two private companies that do millions of dollars in business each year with UCSF and other UC Medical Centers.
[i] UC analysis of SB 959 to State Senate Appropriations Committee, April 13, 2016: UC states that the amount spent on contracts affected by SB 959 is $345 million, 40% of which ($138 million) is contractor overhead and profit. UC notes that total cost of hiring all workers affected by SB 959 would be $295 million, or $50 million less than it would already be spending on contracts once the bill takes effect.
[ii] State Services Contracting, CA Gov. Code 19130: http://www.leginfo.ca.gov/cgi-bin/displaycode?section=gov&group=19001-20000&file=19130-19135
[iii] K-12 Schools Contracting, CA ED Code 45103: http://www.leginfo.ca.gov/cgi-bin/displaycode?section=edc&group=45001-46000&file=45100-45139
[iv] Community Colleges, CA ED Code 88003: http://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?lawCode=EDC§ionNum=88003.1.
Last modified: August 30, 2016