AB 1753, as introduced, Obernolte. State employees: overpayment.
Existing law authorizes the state to recoup employee overpayments through methods mutually agreed to by the employee and the state, as specified, and provides the state, when an employee separates from employment prior to full repayment, with the right to exercise all legal means to recover the additional amount owed. Existing law prohibits the state from taking administrative action to recover an overpayment unless the action is initiated within 3 years from the overpayment.
This bill would require the administrative action for overpayment to be initiated by written notice to the employee and would instead prohibit the state from taking that action unless the action is initiated within 3 years from either the date the employee separates from state service or, when the state alleges that the employee obtained the overpayment as a result of fraud, embezzlement, or falsification, the date the state discovers the fraud, embezzlement, or falsification, whichever is later.
Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.
The people of the State of California do enact as follows:
Section 19838 of the Government Code is
2amended to read:
(a) When the state determines an overpayment has
4been made to an employee, it shall notify the employee of the
5overpayment and afford the employee an opportunity to respond
6prior to commencing recoupment actions. Thereafter,
7reimbursement shall be made to the state through one of the
8following methods mutually agreed to by the employee and the
9state:
10(1) Cash payment or payments.
11(2) Installments through payroll deduction to cover at least the
12same number of pay periods in which the error occurred. When
13overpayments have continued for more than one year, full payment
14may be required by the state through payroll deductions over the
15period of one year.
16(3) The adjustment of appropriate leave credits or compensating
17time off, provided that the overpayment involves the accrual or
18crediting of leave credits (e.g., vacation, annual leave, or holiday)
19or compensating time off. Any errors in sick leave balances may
20only be adjusted with sick leave credits.
21Absent mutual agreement on a method of reimbursement, the
22state shall proceed with recoupment in the manner set forth in
23paragraph (2).
24(b) An employee who is separated from employment prior to
25full repayment of the amount owed shall have withheld from any
26money owing the employee upon separation an amount sufficient
27to provide full repayment. If the amount of money owing upon
28separation is insufficient to provide full reimbursement to the state,
29the state shall have the right to exercise any and all other legal
30means to recover the additional
amount owed.
31(c) Amounts deducted from payment of salary or wages pursuant
32to the above provisions, except as provided in subdivision (b),
33shall in no event exceed 25 percent of the employee’s net
34disposable earnings.
35(d) No administrative action shall be taken by the state pursuant
36to this section to recover an overpayment unless the action is
37initiatedbegin insert by written notice to the employeeend insert within three years from
38begin delete the date of overpayment.end deletebegin insert either of the following, whichever is later:end insert
P3 1(1) The date the employee separates from state service.
end insertbegin insert
2(2) When the state alleges that the employee obtained the
3overpayment as a result of fraud, embezzlement, or falsification,
4the date the state discovers the fraud, embezzlement, or
5falsification.
6(e) If the provisions of this section are in conflict with the
7provisions of a memorandum of understanding reached pursuant
8to Section 3517.5, the memorandum of understanding shall be
9controlling without further legislative action, except that if the
10provisions of a memorandum of understanding require the
11expenditure of funds, the provisions shall not become effective
12unless approved by the Legislature in the annual Budget Act.
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