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Summary: (1)Existing law provides that a
provision of a memorandum of understanding reached between the state employer
and a recognized employee organization representing state civil service
employees that requires the expenditure of funds does not become effective
unless approved by the Legislature in the annual Budget Act. This bill would
approve the agreements entered into by the state employer and State Bargaining
Unit 12 - Craft and Maintenance, and State Bargaining Unit 13 - Stationary
Engineers. The bill would also approve provisions requiring the expenditure
of funds in the addenda entered into between the state employer and State
Bargaining Unit 12 - Craft and Maintenance, and State Bargaining Unit 13 -
Stationary Engineers. The bill would also, among other things, make the
conforming statutory changes for the agreements entered into by the state
employer and State Bargaining Unit 2 - Attorneys and Hearing Officers, State
Bargaining Unit 5 - Highway Patrol, State Bargaining Unit 7 - Protective
Services and Public Safety, State Bargaining Unit 8 - Firefighters, State
Bargaining Unit 9 - Professional Engineers, State Bargaining Unit 10 -
Professional Scientific, State Bargaining Unit 16 - Physicians, Dentists, and
Podiatrists, State Bargaining Unit 18 - Psychiatric Technicians, and State
Bargaining Unit 19 - Health and Social Services/Professional. The bill would
provide that provisions of the memoranda of understanding or addenda, or
both, described above and approved by this bill or previously approved that
require the expenditure of funds will not take effect unless funds for those
provisions are specifically appropriated by the Legislature. The bill would
authorize the state employer or these state bargaining units to reopen
negotiations if funds for those provisions are not specifically appropriated
by the Legislature.This bill would require the provisions of these memoranda
of understanding or addenda, or both, that require the expenditure of funds
to become effective even if these provisions are approved by the Legislature
in legislation other than the annual Budget Act.Existing law, for the 2020–
21 fiscal year, continuously appropriates to the Controller from the General
Fund unallocated special funds, including federal funds and unallocated
nongovernmental cost funds, and any other fund from which state employees are
compensated, the amount necessary for the payment of compensation and
employee benefits to state employees covered by specified memoranda of
understanding, if the Budget Act for that fiscal year is not enacted by July
1, 2020. Existing law includes within this appropriation provision a
memorandum of understanding for State Bargaining Unit 5, effective July 1,
2019, to June 30, 2023.This bill would revise the expiry date of the
memorandum of understanding described above for State Bargaining Unit 5 to
July 3, 2024. The bill would also include, within that continuous
appropriation provision, the amount necessary for the payment of compensation
and employee benefits to state employees covered by memoranda of
understanding entered into between the state employer and State Bargaining
Unit 12 (effective July 1, 2020, to June 30, 2021, inclusive), and State
Bargaining Unit 16 (effective July 1, 2020, to July 1, 2022,
inclusive).Existing law, for the 2021–22 and 2022–23 fiscal years,
continuously appropriates to the Controller from the General Fund unallocated
special funds, including federal funds and unallocated nongovernmental cost
funds, and any other fund from which state employees are compensated, the
amount necessary for the payment of compensation and employee benefits to
state employees covered by specified memoranda of understanding, if the
Budget Act is not enacted by July 1, 2021, for the 2021–22 fiscal year, or by
July 1, 2022, for the 2022–23 fiscal year, respectively.This bill would
further include, within these continuous appropriation provisions, the amount
necessary for the payment of compensation and employee benefits to state
employees covered by the memorandum of understanding entered into for State
Bargaining Unit 16. The bill would also change the expiry date of the
memorandum of understanding described above for State Bargaining Unit 5 to
July 3, 2024.This bill, for the 2023–24 and 2024–25 fiscal years, would
continuously appropriate to the Controller from the General Fund unallocated
special funds, including federal funds and unallocated nongovernmental cost
funds, and any other fund from which state employees are compensated, the
amount necessary for the payment of compensation and employee benefits
covered by the memorandum of understanding entered into between the state
employer and State Bargaining Unit 5, if the Budget Act is not enacted by
July 1, 2023, for the 2023–24 fiscal year, or by July 1, 2024, for the
2024–25 fiscal year.(2)The Public Employees’ Retirement Law (PERL) creates
the Public Employees’ Retirement System for the purpose of providing public
employees pension and other benefits, which are funded by employee and
employer contributions and investment returns. Contributions and investment
returns are deposited in the Public Employees’ Retirement Fund, which is
continuously appropriated for the payment of benefits and administration of
the system. PERL and labor agreements prescribe different normal rates of
contribution for employees depending on bargaining unit, employer, and
inclusion of service in the federal social security system, among other
factors. Existing law adjusts the normal rate of contribution for specified
state miscellaneous or state industrial members who are represented by State
Bargaining Unit 2 to 10% of compensation in excess of $317 per month paid to
a member whose service is not included in the federal system and to 9% of
compensation in excess of $513 per month paid to a member whose service has
been included in the federal system, if certain conditions occur.This bill
would adjust those contribution rates, effective July 1, 2022, to 9½% of
compensation in excess of $317 per month paid to a member whose service is
not included in the federal system and to 8½% of compensation in excess of
$513 per month paid to a member whose service is included in the federal
system.Existing law authorizes the Director of the Department of Human
Resources to establish the normal rate of contribution, as described above,
for a state employee who is excepted from a specific statutory definition of
“state employee” and an officer or employee of the executive branch of state
government who is not a member of the civil service, subject to certain
conditions.This bill would require the normal rate of contribution for the
above-described members to be consistent with the normal rate of contribution
for all members identified in this provision.This bill, effective July 1,
2023, would require the normal contribution rates for state miscellaneous or
state industrial members who are represented by State Bargaining Unit 2 to be
adjusted when both: (A) the total normal cost rate for the category in effect
for the 2022–23 fiscal year has increased or decreased by at least 1% and (B)
50% of the new normal cost rate, as rounded, is greater or less than the
established normal contribution rate, as specified. The bill would require
the board, if, on July 1, 2023, those conditions are met, to adjust the
normal rate of contribution for those members to 50% of the normal cost rate
of contributions, subject to certain conditions. The bill would require, each
year thereafter, the rate to be adjusted only if the board determines the
normal cost rate increases or decreases by more than 1% of payroll, as
specified, and would prohibit the increase from exceeding 1% per year,
applicable to specified compensation. The bill would authorize the Director of
the Department of Human Resources to exercise their discretion to establish
the normal rate of contributions for a state employee who is excepted from a
specified definition of “state employee” and an officer or employee of the
executive branch who is not a member of civil service, subject to the normal
rate of contribution being the same for al members identified in this
provision, as specified.This bill, effective July 1, 2023, would also require
the normal contribution rate for state safety members who are represented by
State Bargaining Unit 2 to be adjusted when both: (A) the normal total cost
rate for the category in effect for the 2020–21 fiscal year has increased or
decreased by at least 1% and (B) 50% of the new normal cost rate, as rounded,
is greater or less than the normal contribution rate established, as
specified. The bill would require the board, if, on July 1, 2023, these
conditions have been met, to adjust the normal rate of contribution for these
members to 50% of the normal cost, and each year thereafter, to adjust the
rate only if the board determines that the total normal cost increases by
more than 1% of payroll, as specified, subject to certain limits.Existing law
requires the normal contribution rate for state industrial members who are
represented by State Bargaining Unit 10 to be adjusted when specified
conditions occur. Existing law requires the normal rate of contribution rate
to return to the normal rate established on July 1, 2021.This bill would
instead require that contribution rate to return to the normal rate on July
1, 2020.Existing law, applicable to state industrial members who are
represented by State Bargaining Unit 10, authorizes the Director of the
Department of Human Resources to exercise discretion to establish the normal
contribution rate for a related state employee who is excepted from a
specific definition of “state employee” and an officer or employee of the
executive branch of state government who is not a member of the civil
service, consistent with the normal rate of contribution for certain
members.This bill would require the normal rate of contribution to be the
same for all of those employee identified above.Existing law, with respect to
the normal contribution rate for patrol members and state miscellaneous
members represented by State Bargaining Unit 5, requires an adjustment to
these rates, effective July 1, 2020.This bill would instead require that
adjustment to be effective July 1, 2022, or July 1, 2023, depending on when
the employees’ and employer’s monthly contribution for prefunding other
postemployment benefits is restored. The bill would require the normal rate
of contribution, for a related state employee who is excepted from the
definition of a “state employee” and an officer or employee of the executive
branch who is not a member of civil service, to be the same for all of
members identified in that category, as prescribed.By increasing employee
contributions into a continuously appropriated fund, this bill would make an
appropriation.(3)The Public Employees’ Medical and Hospital Care Act
(PEMHCA), which is administered by the Board of Administration of the Public
Employees’ Retirement System, prescribes methods for calculating the state
employer contribution for postemployment health care benefits for eligible
retired public employees and their families and for the vesting of these
benefits. PEMHCA establishes the Annuitants’ Health Care Coverage Fund, which
is continuously appropriated, for the purpose of prefunding health care
coverage for annuitants, including administrative costs.PEMHCA requires the
state and employees in specified State Bargaining Units to prefund retiree
health care and other postemployment benefits, subject to certain conditions.
PEMHCA requires employees in State Bargaining Unit 9 to make contributions to
prefund retiree health care and the state to make a matching contribution, as
specified. PEMHCA suspends those employees’ monthly contribution for
prefunding other postemployment benefits for the 2020–21 and 2021–22 fiscal years
beginning on the first day of the pay period following ratification and
ending on June 30, 2022.This bill would provide that the above employees’
monthly contribution for prefunding those other benefits is suspended and
shall not be withheld from employees’ salaries beginning with the July 2020
pay period and ending on June 30, 2022.PEMHCA requires the employees in State
Bargaining Unit 10 to prefund retiree health care and the state to make a
matching contribution, which, effective July 1, 2020, is 2.8% of pensionable
compensation.This bill instead would suspend the requirement that those
employees make a monthly contribution for prefunding other postemployment
benefits for the 2020–21 and 2021–22 fiscal years, and would not permit that
contribution amount to be withheld from employees’ salaries during a
specified timeframe.PEMHCA requires the employees in State Bargaining Unit 12
to make contributions to prefund retiree health care based on a specified
schedule, and the state to make a matching contribution, as provided. The act
further requires, effective July 1, 2020, an additional 1.1% for a total
employee contribution of 4.6% of pensionable compensation.This bill would
suspend the above-described employee contribution for prefunding other
postemployment benefits for the 2020–21 fiscal year, and would not permit
that contribution amount to be withheld from employees’ salaries during a
specified timeframe.PEMHCA law requires the employees in State Bargaining
Unit 2 to make contributions to prefund retiree health care based on a
specified schedule, and the state to make a matching contribution. The act
further requires, effective July 1, 2019, an additional 0.7% compensation be
made for a total employee contribution of 2% of pensionable compensation.This
bill would suspend the employees’ monthly contribution for prefunding other
postemployment benefits for the 2020–21 and 2021–22 fiscal years, and would
not permit that contribution amount to be withheld from employees’ salaries
during a specified timeframe.PEMHCA requires the employees in State
Bargaining Unit 7 to make contributions to prefund retiree health care, as
specified, with that rate set at an additional 1.3% of compensation for a
total employee contribution of 4% of pensionable compensation effective July
1, 2019.This bill would suspend the above employees’ monthly contribution for
prefunding other postemployment benefits for the 2020–21 and 2021–22 fiscal
years, and would not permit that amount to be withheld from employees’
salaries during a specified timeframe.PEMHCA requires the employees in State
Bargaining Unit 8 to make contributions to prefund retiree health care, as
specified, and the state to make a matching contribution. Existing law
requires, effective July 1, 2019, an additional 1.4% compensation for a total
employee contribution of 4.4% of pensionable compensation.This bill would
suspend the above employees’ monthly contribution for prefunding other
postemployment benefits for the 2020–21 fiscal year, and would not permit
that contribution amount to be withheld from employees’ salaries during a
specified timeframe.PEMHCA requires the employees in State Bargaining Unit 13
to make contributions to prefund retiree health care, as specified, and the
state to make a matching contribution. The act requires, effective July 1,
2019, an additional 1.3% contribution, for a total employee contribution of
3.9% of pensionable compensation.This bill would suspend the above employees’
monthly contribution for prefunding other postemployment benefits for the
2020–21 and 2021–22 fiscal years, and would not permit that contribution
amount to be withheld from employees’ salaries during a specified
timeframe.PEMHCA requires the employees in State Bargaining Unit 18 to make
contributions to prefund retiree health care based, as specified, and the
state to make a matching contribution. PEMHCA requires, after July 1, 2019, a
total employee contribution of 4% of pensionable compensation and that the
employer and employee contribution percentages be adjusted based on
actuarially determined total normal costs, as specified. PEMHCA further
requires, commencing no sooner than July 1, 2021, and on July 1 of each
fiscal year thereafter, if an adjustment is determined to be necessary, that
the employer and employee contribution percentages be increased to maintain a
50% cost sharing of actuarially determined normal costs, as specified.This
bill would suspend the employees’ monthly contribution for prefunding other
postemployment benefits for the 2020–21 and 2021–22 fiscal years, and would
not permit that contribution amount to be withheld from employees’ salaries
during a specified timeframe.PEMHCA requires employees in State Bargaining
Unit 19 to make contributions to prefund retiree health care and the state to
make a matching contribution, with that rate for the total employee
contribution being 3% of pensionable compensation effective July 1, 2019.This
bill would suspend the above employees’ monthly contribution for prefunding
other postemployment benefits for the 2020–21 and 2021–22 fiscal years, and
would not permit that contribution amount to be withheld from employees’
salaries during a specified timeframe.PEMHCA requires employees in State
Bargaining Unit 16 to make contributions to prefund retiree health care and the
state to make a matching contribution, with that rate for the total employee
contribution being set at 1.4% effective July 1, 2018.This bill would suspend
the above employees’ monthly contribution for prefunding other postemployment
benefits for the 2020–21 and 2021–22 fiscal years, and would not permit that
contribution amount to be withheld from employees’ salaries during a
specified timeframe.PEMHCA requires employees in State Bargaining Unit 5 to
make contributions to prefund retiree health care and the state to make a
matching contribution. The act further requires, after July 1, 2020, the
employer and employee contributions to be adjusted based on actuarially
determined total normal costs. The act requires, commencing July 1, 2021, and
July 1 of each fiscal year thereafter, that if the adjustment is necessary,
the employer and employee contribution percentages be increased or decreased
to maintain a 50% cost sharing of actuarially determined normal costs, as
specified.This bill would suspend the above employees’ monthly contribution
for prefunding other postemployment benefits for the 2020–21 and 2021–22
fiscal years, and would not permit that contribution amount to be withheld
from employees’ salaries during a specified timeframe. The bill would provide
that, effective July 1, 2022, if the Director of Finance does not restore the
state and employee share of other postemployment benefits, the employer and
employee contributions shall be restored and the parties shall incorporate
the 3.5% employee share of pensionable compensation into a specified salary
survey. The bill would also provide that if projected state revenues continue
to be insufficient to fully fund existing statutory and constitutional
obligations, and the above postemployment benefit contributions, the
employees’ and employer’s other postemployment benefit contributions and the
inclusion of the 3.4% employee share shall become effective on July 1, 2023.
The bill would grant sole discretion to the Department of Finance to
determine funding availability under this provision.This bill, upon the other
postemployment benefits being restored for employees in State Bargaining Unit
5, as described above, would then require those employees and the state to
make contributions based on a specified schedule, which, effective July 1,
2022, or July 1, 2023, would require employees to contribute 1.1% and the
employer to contribute 5.7% of pensionable compensation for a total of 6.8%
pensionable compensation. The bill would also adjust these rates for future
years, as specified.The bill would appropriate the sum of $5,913,000 for
Bargaining Units 2, 5, 7, 8, 10, 12, 13, 16, and 19 for expenditure in
augmentation of, and for the purpose of, state employee compensation, in
accordance with a specified schedule.This bill would declare that it is to
take effect immediately as a bill providing for appropriations related to the
Budget Bill.
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