NASHVILLE -- Gov. Bill Haslam's state civil service reform passed the Senate on Thursday and is now headed to the governor's desk to sign.
Senators approved the bill on a 30-3 vote. It passed the House Wednesday by a 74-19 margin.
The proposal makes it easier for the governor to hire, fire, promote and demote executive branch workers. It also introduces merit pay for higher-performing employees. Those who don't do so well could see their salaries cut.
Another provision requires the state develop performance standards and evaluate employees annually. Notices for layoffs would be reduced from 90 days to 30 days.
"This is a significant piece of legislation that improves the state's out-dated and broken employment system and allows the state to recruit, retain and reward the best employees," Haslam said in a statement.
The bill's passage was eased as a result of a number of compromises with the Tennessee State Employees Association, some majority Republican lawmakers and most if not all Democrats.
Democrats and the TSEA charged the original bill could return Tennessee to the days of political patronage when employees were hired and fired based on whom they knew.
One compromise involves layoffs. Haslam's original proposal changed current requirements that gives priority to the most senior employees in reductions in force and put the focus on performance.
Performance is still the top factor, but the administration will also have to take into account seniority, ability and disciplinary history.
However, the bill still eliminates "bumping," which requires managers to let senior employees in danger of being laid off to knock more junior employees out of their jobs. Proponents of the practice say it is the core of civil service protections that protect employees against arbitrary firings.
"It's done," said TSEA Executive Director Bob O'Connell after the Senate's action. "Now we move into Part 2 of the matter, which is to monitor closely the implementation of the bill. We're going to look out for the things when we were initially opposed to the bill, what we were afraid would happen."
In other legislative matters Thursday:
• The governor this week signed a previously passed bill from his anti-crime package that the administration says can be used to combat gang violence.
The bill boosts jail time for violent crime committed by two or more people.
• Haslam signed into law a bill that allows teachers and other school employees to participate in student-initiated prayer on school grounds before and after schools start for the day.
• The House on Thursday approved a Haslam bill that gives the governor power to hire or fire the executive directors of the Tennessee Higher Education Commission and the Tennessee Commission on Children and Youth.
Members voted 66-26 on the bill Thursday.
It gives the governor more control over four agencies. They include THEC, which oversees operations of both the University of Tennessee and State Board of Regents systems, and the Children and Youth Commission, which provides independent oversight of executive branch agencies dealing with children.
House Minority Leader Craig Fitzhugh fought the bill, saying both agencies provide important protection against executive overreach. The governor is already the chairman of the UT and TBR systems, he said.
Majority Leader Gerald McCormick, R-Chattanooga, said the changes will make the oversight panels more accountable. He noted Haslam narrowed his promised focus on boards and commissions to just the four agencies.
• The names of applicants interested in heading Tennessee public colleges and universities will remain secret until near the end of the appointment process under a bill sponsored by McCormick.
Members voted 79-12 in favor of the bill, which McCormick said he introduced at the request of the University of Tennessee's board of trustees.
• A bill that requires charter schools disclose donations from foreign sources and regulates their use of nonimmigrant foreign workers passed the Senate on an 18-13 vote but later stalled in the House.
Critics charged the bill is discriminatory and puts the worst face possible on Tennessee to international businesses.
The Associated Press contributed to this report.