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Audit highlights low wages among Utah liquor store employees

First Published      Last Updated Sep 28 2016 09:22 am

Legislature could loosen grip on liquor agency, review suggests, allowing it to operate more like private business.

While Utah liquor store employees have higher hourly wages — and significantly better health and retirement benefits — than workers at convenience stores, their pay still lags behind counterparts in similar liquor-control states, a review of the Utah Department of Alcoholic Beverage Control (DABC) shows.

"We can certainly make improvements in the area of staffing and pay," Executive Director Sal Petilos said after the annual state audit was presented Tuesday.

But, he pointed out, the agency is at a disadvantage financially — and has a high employee turnover rate — because state law requires the DABC to return all its profits to the state, and the Legislature sets the department budget. Most of the liquor funds go into the state's general operating fund, and sales-tax revenues go toward school-lunch and public-safety programs.



"We can't be as free as a retail operation and stay within the statute," said Petilos, whose agency brought in nearly $400 million in annual sales last year and is operating on a current budget of $46.6 million.

State Auditor John Dougall agreed.

"The Legislature oftentimes makes the DABC tie one hand behind its back as they deliver product to the citizens of the state," he told members of the state liquor commission during the audit report. "But there are opportunities for the Legislature to untie the hands of the DABC and let it perform more like the private sector and less like government."

For the salary review, auditors looked at employee salaries in more than a dozen states and jurisdictions that control retail liquor sales. The comparison showed that Utah's full- and part-time retail sales clerks were the lowest paid among those surveyed.

In Utah, a full-time retail clerk averages $10.86 per hour. That's about half what a retail sales clerk earns in Maryland, which had the highest hourly wage, at $23.67. New Hampshire was second-highest, at $17.05; followed by Pennsylvania, at $16.97 per hour.

Part-time liquor store employees in Utah average $9.31 per hour. Minnesota pays the most at $15.04, followed by New Hampshire at $13.60 and Idaho at $10.30.

As the DABC retail stores operate in a somewhat comparable labor market to the convenience store industry, the auditor also compared DABC's store employee wages to those employees using the 2014 National Association of Convenience Stores Compensation Report.

The hourly wage of a full-time sales clerk in Utah ($10.86) was higher than both the national average of $9.13 per hour and the regional at $9.98.

The only exception was retail store managers in Utah, who average $19.31 an hour, less than the regional average of $23.16.

Utah liquor store employees also have "significantly richer benefit packages" than what is offered by the convenience-store industry in the Western region, auditors noted.

A liquor store manager with five years' experience in Utah has an average salary of $34,247. The state pays an additional $13,456 for family health insurance and $8,784 toward retirement.

In the convenience store industry, a veteran manager makes $37,149, but the company only pays $6,500 in medical insurance benefits annually and contributes $2,340 toward retirement.

Pay disparities should be looked at in the future, the audit notes.

"Compensating employees too little can result in difficulty attracting and retaining employees," the audit said, "whereas paying employees too much can create unnecessary additional costs."

The audit also looked at a wide range of DABC practices. In those areas, auditors found that:

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