UC Internal Audit Reveals Failure to Fully Implement Fair Wage/Fair Work Plan

The University of California set a policy in 2015 that called for setting the minimum wage for workers at $15 through the Fair Wage/Fair Work Plan. However, two years later, internal audits, conducted by UC Internal Audit and obtained by the San Jose Mercury News, concluded that the system is not keeping up with the promises it made.

Spokesperson for the UC Office of the President Claire Doan informed the UCSD Guardian that the internal audit was intended to help the UC system locate and correct issues regarding pay.

“It’s important to note that this self-initiated internal audit is meant to identify areas for UC to further strengthen implementation of the policy, and that’s exactly what is guiding our improvements now,” Doan said. “We’re taking action to immediately address the problems we found.”
In order to address the results of the audit, the UC system will implement the following new measures: “providing and tracking additional training for all procurement professionals to ensure proper implementation of guidelines; updating reference documents and online content for additional clarification and direction; and working with procurement leadership at each location to reinforce their roles and responsibilities in compliance.”

According to AFSCME, the UC system’s largest labor union which has been following UC activity since it was established in 1948 at UC Berkeley, the UC system, while avoiding to enforce the $15 minimum wage, is allocating its spending elsewhere by continuing to pay ex-employees.

“We see news reports of executives making six-figure salaries, even above the governor of California. Ex-chancellors from Berkeley and Davis are making more to essentially do nothing,” Angeles said.

Angeles additionally noted that many companies failed to provide necessary certification forms or audits.

“44 out of 47 companies who met the $100k threshold did not provide legitimate certification forms or audits demonstrating compliance with Fair Wage/Fair Work Plan, including seven whose forms were signed by a company executive instead of an independent auditor,” Angeles stated. Angeles continued to say that “one supplier was provided outdated terms and conditions so Fair Wage/Fair Work Plan was not implemented.”

Refilwe Gqajela, the UCSD Vice President of External Affairs of Associated Students, noted that the lack of enforcement can be seen across the UC campuses.

“We are seeing this a lot in housing developments in particular with UC Davis,” Gqajela said.

Workers that are contracted out are “working side by side with folks who are UC employees doing the same work where one is getting paid barely over the minimum wage of the state and another is getting paid $15 minimum wage,” Gqajela noted.

According to Doan, however, the Fair Wage/Fair Work Plan also applies to contracted workers, and UCOP is acting to implement the policy across all campuses.

“Fair Wage/Fair Work is applicable to thousands of service orders issued annually throughout the UC system, and we’re working diligently to ensure the policy is implemented appropriately and consistently across all of our campuses,” Doan said.

Angles explained that although the university claims to be saving a lot of money by resorting to contracting out, there is no evidence that this is true.  

“UC was claiming to have saved millions of dollars from contracting out, but the audit found that the $109 million in the claimed savings couldn’t be substantiated” Angeles stated. 

Angeles claimed that the Fair Wage/Fair Work plan has prompted the UC system to contract out employees instead of hiring UC employees. However, the UC Office of the President disputes this argument. 

“There are problems with increased use of subcontractors that creates a staffing problem,” Angeles explained. “These directly employed workers are trained for very specific tasks and when they have to use contract works, the directly employed workers have an increased workload because they have to also worry about training the new contracted employees. This presents a decrease in services provided to students.”

More than the inability to enforce the policies that the UC system implements, AFSCME 3299 is concerned about the lack of adherence by the UC system to its core mission.

“UC is really going away with its core public vision, serve as an engine of social mobility in California as exemplified by the non-conformity to these policies,” Angeles stated. “This problem is bigger than a union contract, it is bigger than a piece of legislation. What we want is change and we want UC to get back to its core public mission.”

The audit plans can be found on the UC website.

This article previously stated that the $15 minimum wage does not apply to contracted workers. This was wrong, and that information has been retracted. The article additionally did not attribute the claim that the Fair Wage/Fair Work Plan has led the UC system to prefer contracted employees; this has been corrected. Lastly, this article initially did not include the perspective of the UC Office of the President. That was a journalistic failure on our part, and we apologize to our readers and UCOP.

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