Public Employee Immunity Challenge

JULY 16, 2010

By KATY GRIMES

Stacking the deck in favor of state employees, several bills currently working through the Senate would help public employees avoid future furloughs –- assuming the governor orders more.

On July 15 the Senate Appropriations Committee heard several bills — each representing different groups of state employees — that would protect state employees from facing cutbacks stemming from Executive Orders S-16-08 and S-13-09, which imposed mandatory furloughs on state civil service employees regardless of funding source and with limited exemptions.

According to the state’s personnel department, some departments like the California Highway Patrol and the Public Utilities Commission have already been exempt from the furlough program. But AB 2008, authored by Assemblyman Juan Arambula, I-Fresno, would go much further and exempt employees of the Franchise Tax Board and the State Board of Equalization from furloughs implemented by any executive order by the governor, or by any other action of a state agency, board or commission.

Then there’s AB 1215, authored by Assemblyman Hector De La Torre, D-Southgate. That bill protects any state civil service employees  employed in positions funded at least 95 percent by sources other than the general fund from furloughs.

According to an Assembly staff analysis, the State Controller’s Office says AB 1215 would result in exemptions for approximately 79,850 state civil service employees: 69,500 employees paid 100 percent from non-general fund monies, 3,985 Board of Equalization Employees and 6,365 Franchise Tax Board Employees.

Careful to use language covering every employed person in the state, AB 1765, authored by Jose Solorio, D-Santa Ana, prohibits the furloughing of state employees when the unemployment rate in California reaches or exceeds 8.5 percent, the employee’s position is at least 95% funded by the federal government, the employee “performs services that combat the states recession” and if the employee works for the California Unemployment Insurance Appeals Board or the Employment Development Department.

What’s more, the Assembly analysis found a reverse of “comp time” in place. Apparently, state employees have been allowed to accrue furlough days and use them like vacation days. Accrued furlough days have no cash value, and must be used within 24 months of the end of the furlough program, as well as before all other accrued vacation, sick and personal leave days.

AB 1651, also by De La Torre, says school employees and members of CalPERS who have been or are subject to mandatory furloughs receive the same amount of retirement service credit and final compensation value he or she would have received had the employee not been subject to the mandatory furlough. It also retroactively funds the retirement credits of employees back to July 1, 2008. Sponsors of the bill are the CSEA and AFL-CIO.

This would seem to defy California employment law, which states that all benefits are earned based upon actual hours worked. If employees work more or fewer hours, benefits are earned commensurately. The idea behind cutting back employee hours is to save the state money in salaries, as well as earned benefits. Pension benefits are covered under the federal Employee Retirement Income Security Act (ERISA), but accrual rates are still based on how part time or full time employment.

The state’s Department of Finance opposed AB 2008 as well as AB 1215, but “found no fiscal effect” on the state from AB 1651. Legislators on the Appropriations Committee did not question the DOF representative about the AB 1651 analysis.

The Appropriations Committee voted the bills out of the committee to the Senate floor to be heard in flagrante, where undoubtedly there will be plenty of heated political argument. Cal Watchdog will be at the Senate hearing and report on the status of the bills.