Fritz, Ard and Pressler. The opinion of the court was delivered by Pressler, J.A.D.
The single question involved in these consolidated appeals is whether or not a rule promulgated by the Department of Institutions and Agencies (Department) governing the classification, compensation and other terms and conditions of employment of employees of county welfare boards may validly distinguish between county welfare board directors and deputy directors on the one hand and all other board employees on the other hand in respect of the opportunity to receive salary differentials in excess of the Department's established salary ranges.
The essential background of this controversy is set forth in Communications Workers v. Union Cty. Welfare Bd. , 126 N.J. Super. 517 (App. Div. 1974), in which various unions challenged the right of the Department to establish fixed salary schedules applying uniformly throughout the State to all employees of the county welfare boards. Communications Workers sustained the power as well as the obligation of the Department to establish salary schedules of state-wide application pursuant both to N.J.S.A. 44:7-6 and the superimposed federal statutes and regulations governing a state welfare system which is at least in part federally financed. We recognized, however, in Communications Workers the right of the employees of the various county boards to seek financial recognition of special factors varying from county to county which reasonably may affect the amount of compensation -- such factors as the difference in the cost of living from county to county, the consistency of the salary of welfare board employees with the salaries of other county employees in comparable positions, the differing experience and problems among the various counties in recruiting and retaining personnel,
and the differing monetary resources of the various counties. As we thus concluded:
The response of the Department to our holding in Communications Workers was, in July 1974, to amend its Ruling 11, which constitutes the aggregation of provisions controlling the terms and conditions of employment of county welfare board employees. More specifically, Part I, paragraph 5, of the Ruling was revised in order to authorize the county welfare boards to consider the
Such grant of salary differentials by the county boards remained, however, by the express terms of the regulation, subject to approval by the Department's Division of Public Welfare.
The state-wide salary schedules themselves, as originally promulgated as part of Ruling 11, were unaffected by the 1974 rule revision. The general plan adopted by the schedules is to identify the position in state employment comparable to each of the positions in county employment and to apply to the county position the same salary range as is applicable to the counterpart state position. There being no state position comparable to the county positions of director and deputy director, the Department retained a private consulting
firm to recommend salary ranges for these positions. This action resulted in the submission to the Department of the so-called Hay report. The general thesis of the report was that there should not be a single state-wide salary range for the director and deputy director positions because of the variation from county to county of the scope of their responsibilities in terms of such factors as caseloads, the size of staff to be supervised, the amount of public funds managed, and the variety of programs administered. Accordingly, the recommendation of the report was to classify the counties into five categories determined essentially by the difficulty of the job. A separate salary range was established for each category. This plan was in large measure accepted by the Department, which, however, reduced to four the number of county categories.
Shortly after the 1974 revision of Ruling 11 was adopted, appellant Essex County Welfare Board sought Department approval for its grant of a pay differential to its Director which would have resulted in his compensation exceeding the range for the county category in which Essex County had been placed. The Department declined approval on the ground that the 1974 amendment did not apply to county welfare directors and deputy directors. Other county welfare boards were also so advised despite the Department's simultaneous approval of pay differentials for other categories of county welfare board employees. After the exchange of substantial correspondence between the Department and the county boards, the Department, in November 1975 and after a public hearing, again amended the rule, expressly excluding directors and deputy directors from the pay-differential authorization. Both the Essex County Welfare Board and the County Welfare Director's Association of New Jersey*fn1 filed notices of appeal
from the order adopting the 1975 revision of the rule. These appeals were consolidated, and thereafter the Middlesex County Welfare Board was granted leave to intervene ...