Hundreds of Federal Housing Finance Agency employees may soon see changes at work as labor leaders prepare to come to the negotiating table.
Pay equity, employee engagement and creating clear grievance procedures are top priorities for Nathan Watkins, president of the nearly new bargaining unit under the Treasury Employees Union.
“It was almost exactly two years ago that a small group of employees, including myself, approached several national unions that were looking to establish chapters at FHFA,” Watkins said in an interview. “First and foremost, we wanted to give our employees a voice.”
The FHFA, a small financial regulator with just over 700 employees, culminated in an overwhelming unionization vote in August 2023. FHFA employees voted 254-24, or 91%, in favor of forming a union. . The bargaining department currently has approximately 500 employees.
“It was a wonderfully positive, encouraging and uplifting result, but there was a lot of work to be done,” Watkins said. “Suddenly, we found ourselves negotiating the impact and implementation of certain policy changes and merit increases this year.”
The next step for the new NTEU bargaining unit is to negotiate with FHFA management and ultimately sign FHFA's first collective agreement. Future contracts will cover many areas that directly impact the workforce, including pay, benefits, working hours and other terms and conditions of employment. A final decision is expected to be made by the end of this year.
That's a big job, given the “very small job” of bargaining unit leaders, as Watkins puts it.
“I forgot the rhythm of '9 to 5,'” he said. “It may seem like a pipe dream, but if you can sleep well every night for a week, you'll know you've really achieved it.”
The creation of the bargaining unit took a long time. FHFA has experienced a decline in employee engagement in recent years, according to results from the Federal Employee Viewpoint Survey (FEVS) and the Partnership for Public Service's Great Places to Work rankings. Like federal employees in many other government agencies, pay satisfaction has declined in recent years.
“Despite such a drop in morale, response rates by agency rose rapidly and reached the top,” Watkins said. “We still do not believe that the authorities have heard our opinion.”
Bob Stanton, FHFA's Director of Performance Management and Total Compensation, said having the FEVS results, including increased response rates, at hand is critical to future improvements.
“Honestly, we're looking forward to the upcoming FEVS,” Stanton said in an interview. “We want to continue to learn from our employees, we want to continue to learn from our unions, and we want to build a working relationship with our employees.”
There are other ways FHFA seeks to collect feedback from employees. In addition to FEVS, the agency has “Engagement Ambassadors” who meet regularly to discuss ideas for increasing employee engagement. Staff members can also use an online platform called IdeaScale to reach leadership with suggestions for improving engagement, said Debra Chu, director of equal opportunity and equity at FHFA.
“Throughout that process, we were really intentional about listening to our employees and making sure their input was received,” Chu said in an interview.
In response to feedback, FHFA offered “wellness” leave. This includes his three hours of vacation per pay period and his one full work day per year. Additionally, Chu said that while government agencies are offering full-time telework during August, it may be difficult for employees with children at home to return to school that month.
But if employees have further concerns, Watkins said, an administrative grievance process should be established as part of the collective bargaining agreement. This is a way for employees to formally raise concerns with management and have them addressed and resolved.
“We also really want to fill the gap that currently exists where employees can receive information from government agencies about policies and available resources,” Watkins said. “This gives employees a voice and ensures that their concerns are heard and acknowledged by the authorities, even if it is not a formal complaint. Information exchange between employees is part of our That's one of our top priorities. We hope that the agency hears us and recognizes our desire to speak up, be heard, and collaborate.”
Mr. Chu and Mr. Stanton expressed support for establishing a formal grievance procedure, saying it would benefit the agency as well as the employees.
“We need tools and mechanisms to help us hear employee concerns, inform how management responds to employees, and inform the policy-making process,” Chu said. .
Perhaps one of the most notable collective bargaining themes Watkins will focus on in his negotiations is establishing better pay equity at the agency. FHFA is a non-assignment agency. This means that FHFA directors have discretion in determining employee salaries rather than following a general schedule. The company has adopted a “performance pay” system, in which employees receive annual salary increases based on their individual performance and also receive annual bonuses based on their performance.
FHFA also has legal requirements to maintain pay levels for other federal financial regulators such as the Securities and Exchange Commission, the Consumer Financial Protection Bureau, and the Federal Deposit Insurance Corporation.
Nevertheless, Watkins said FHFA pay lags for some employees because pay history carries a large weight.
“Many, if not most, of the employees who join FHFA come from the private sector and other financial regulators,” Watkins said. “Your hiring salary typically determines your salary trajectory at an agency.”
FHFA pay satisfaction over time
The Biden administration is equally aware of concerns about pay history. The Office of Personnel Management just finalized a rule that prohibits agencies from considering salary history in the hiring process, but OPM Director Kiran Ahuja says this will exacerbate existing inequalities and reduce the chances of women and people of color. It said it could have an unfair impact on seed workers.
“Pay history is not necessarily a good indicator of a worker's worth, experience, or expertise, and it can contain or exacerbate bias,” OPM said in its Jan. 29 final rule. . “Salary settings based on salary history can be unfair, perpetuate bias across occupations, and create pay disparities between men and women’s earnings.”
By October of this year, government agencies will no longer be able to base the salaries of new or returning federal employees on private sector wages. Still, OPM's final rule typically applies only to new or rehired federal employees, so federal employees who already work for agencies such as FHFA may not experience significant changes as a result.
“Employees who join FHFA early in their careers and who may be highly capable and successful at FHFA still have no opportunity to increase their pay and earn less than their peers at the same level.” said Watkins.
Stanton and Chu said the agency is conducting compensation studies to better understand where pay disparities may exist and how to correct them.
“This is our first time in a union environment,” Stanton said. “Our collaboration really started with listening to the concerns of the unions and working with them. Now we are focused on the future and on solutions that are beneficial for our bargaining unit and the workforce. We all share the same goal: We want FHFA to be a great place to work.”
Watkins said the “high-handed” management practices and culture of fear and retaliation that he and his colleagues experienced led to his initial decision to unionize at FHFA. Still, Watkins added that he is optimistic about negotiating the first-ever collective bargaining agreement. He said he hopes that by establishing clear policies on pay, benefits and grievances, the current downward trend in employee engagement will be reversed.
“I have full confidence that when executives and senior leaders come to the table, they recognize that we are all human beings and colleagues working toward the same goals.” Watkins said. “We hope that by the end of contract negotiations, even though the process is difficult, we will truly see the mutual benefit that unions provide to federal agencies. We look forward to working with the agency going forward.” That's what I think.”
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