Governor Schwarzenegger Issues Order for More Furloughs for State Workers

Following an announcement by Controller John Chiang that unless legislators passed a budget soon, he would be forced to issue IOUs beginning in either August or September, Governor Schwarzenegger this week called for additional furloughs for state employees. His decision comes a month after his previous executive order for furloughs ended. 

The Governor’s new executive order again requires state employees (excluding those in several state departments and employees within the six unions that have reached tentative labor agreements with the Governor) to take three unpaid days off per month, with an end date of when the Legislature passes a state budget.
The following list summarizes bills which will be heard in either the Senate or Assembly Appropriations (fiscal) committees on August 2 and August 4, respectively. We will keep you apprised of their status once the hearings have occurred.

Retirement

AB 1425 (Simitian) – Oppose Unless Amended
As Amended on May 5, 2010

Senate Bill 1425, by Senator Joe Simitian, amends the Public Employees Retirement Law and the State Teacher’s Retirement System law to limit those items that can be included in the calculation of final compensation for the purpose of prohibiting pension spiking; the bill also prohibits retirees within public pension systems from providing services to an employer covered by a state or local retirement system until the retiree has had a bona fide separation from service for at least six months. 

CSAC has taken an “Oppose Unless Amended” position on SB 1425, requesting that the author delete the section of the bill requiring a six-month separation from service prior to a retiree returning to work. Counties have legitimate needs to utilize retired annuitants and many of them already have restrictions in place for hiring retirees. Placing a six-month wait on retirees before they are able to return to public service interferes with a county’s right to choose the best candidate for a job and manage county resources.

AB 1987 (Ma) – Oppose
As Amended on June 1, 2010

Assembly Bill 1987, by Assembly Member Fiona Ma, would place limits on the final compensation calculation of any 1937 Act retirement system member not in a group or class for the purpose of determining their retirement allowance. Specifically, AB 1987 prohibits the member’s final compensation calculation from including any salary, compensation, or remuneration changes that were made with the intention of spiking their pension benefits. Additionally, the member’s final compensation calculation cannot include pay increases that are more than the average compensation increase employees in the same or similar group received in the final compensation period and the two years prior.

AB 1987 would require local and state retirement boards to adopt an ongoing audit process to ensure that any change in a member’s salary or compensation was not made to purposefully enhance their retirement benefits. The bill also includes a requirement of the county to report to the retirement board within 30 days of the following:

• A new pay item or a change in an existing pay item.
• A change in the status of any member resulting from a transfer, promotion, leave of absence, resignation, reinstatement, dismissal, or death.
• Any change that may impact the pay rate or special compensation of a member resulting from a Memorandum of Understanding.
• Any information concerning members with claims against the board.

AB 1987 will codify the Ventura County decision and related settlements by requiring specified items of remuneration to be included as special compensation.

The bill will be amended on August 2 to provide county retirement systems with the authority to become independent districts by resolution of the retirement board. The amendments require the Board of Supervisors and employee representatives to approve the resolution in a memorandum of understanding under the Meyers-Milias-Brown Act (MMBA). CSAC opposes this provision because it appears to establish a duty to bargain over a decision reached by the board of retirement, a governing body separate from the Board of Supervisors, who may or may not have consulted the county. Additionally, CSAC believes the bill will result in counties being leveraged in bargaining with demands from employee representatives that are unrelated to the separation of the retirement system. 

AB 1743 (Hernandez) – Support
As Amended on June 17, 2010

Assembly Member 1743, by Assembly Member Ed Hernandez, would require placement agents that do business with a public retirement system in California to register as lobbyists, thereby requiring placement agents to comply with all regulations and restrictions imposed on lobbyists by the Political Reform Act of 1974. 

Additionally, AB 1743 would prohibit placement agents from receiving contingency fees to ensure that placement agents are paid on the basis of the services actually provided. Additionally, the measure prohibits placement agents from giving campaign contributions and significantly limits gifts from placement agents to California Public Employees’ Retirement System and California State Teachers’ Retirement System public officials. CSAC supports AB 1743, as it would increase transparency and accountability in our state’s retirement systems as well as improve the integrity of their investments.

Employees’ Rights

AB 482 (Mendoza) – Oppose Unless Amended
As Amended on July 15, 2010

Assembly Bill 482, by Assembly Member Tony Mendoza, would prohibit prospective employers from using consumer credit reports for employment purposes unless the following criteria are met:

• The information in the credit report is substantially job-related (i.e., the applicant has access to money, trade secrets or confidential information).
• The position sought is managerial, a position in the state Department of Justice, a sworn peace officer or other law enforcement position.
• The credit report information is already required by law.

CSAC has taken an Oppose Unless Amended position on AB 482 and has requested that the author amend the bill to exempt positions within cities and counties.

AB 2340 (Monning) – Oppose Unless Amended
As Amended on July 15, 2010

Assembly Bill 2340, by Assembly Member Bill Monning, would provide employees (including temporary, seasonal and part-time) a right of up to three days of unpaid bereavement leave. CSAC opposes AB 2340 as it poses a problem for In-Home Supportive Services employees who do not work a traditional scheduled work week and because of the guarantee that bereavement leave can be used for up to 13 months, which is not typical of current leave policies and has the potential to conflict with policies for employees already receiving bereavement leave.

CSAC has requested that the author take an amendment which would exclude public employees from the bill.

Workers’ Compensation

AB 933 (Fong) – Oppose
As Amended on June 14, 2010

Assembly Bill 933, by Assembly Member Paul Fong, would require that a physician who conducts utilization review for workers’ compensation purposes and any physician who modifies, delays or denies a request for treatment in a workers’ compensation claim to be licensed in the state of California. Recent amendments create new requirements for re-certification of Medical Provider Networks (MPN) and create the requirement that employers sign certain statements under penalty of perjury. 

CSAC opposes AB 933 because it places a limit on the number of doctors who are able to perform utilization review services, thereby creating a logjam of cases, and because it will lead to a rise in the cost of an MPN without offering any additional value to injured workers.

AB 2253 (Coto) – Oppose
As Amended on May 28, 2010

AB 2253, by Assembly Member Joe Coto, would lengthen the amount of time in which a safety member can file a worker’s compensation cancer claim with the presumption that the cancer is work-related to a maximum of 10 years following termination of employment.

Current law allows a public safety employee to file a claim under the presumption based on their time served on-the-job. Specifically, a firefighter or police officer receives three months of eligibility for every year of service with a maximum time-frame of five years to file a claim. The increase in the time-frame to file a claim proposed in AB 2253 increases the chance that employers will be forced to compensate former employees for cancer claims that are not job-related. CSAC opposes AB 2253 because it would increases the period of exposure employers have for these difficult to defend presumption cases. This is an unnecessary expansion in the presumption when all job-related claims remain compensable at any time.