Amended in Assembly March 30, 2016

California Legislature—2015–16 Regular Session

Assembly Bill No. 1753

Introduced by Assembly Member Obernolte

February 2, 2016

An act to amend Section 19838 of the Government Code, relating to state employees.

LEGISLATIVE COUNSEL’S DIGEST

AB 1753, as amended, 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 begin delete employee and would instead prohibit the state from taking that action unless the action is initiated within 3 years from end delete begin insert employee. The bill, for an overpayment that involves leave credits, would make the date of overpayment end insert either the date the employee begin delete separates from state service end delete begin insert receives compensation in exchange for leave erroneously credited to the employee end insert or, begin delete when end delete begin insert if end insert 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 1.  

Section 19838 of the Government Code is
amended to read:

19838.  

(a) When the state determines an overpayment has
been made to an employee, it shall notify the employee of the
overpayment and afford the employee an opportunity to respond
prior to commencing recoupment actions. Thereafter,
reimbursement shall be made to the state through one of the
following methods mutually agreed to by the employee and the
state:

(1) Cash payment or payments.

(2) Installments through payroll deduction to cover at least the
same number of pay periods in which the error occurred. When
overpayments have continued for more than one year, full payment
may be required by the state through payroll deductions over the
period of one year.

(3) The adjustment of appropriate leave credits or compensating
time off, provided that the overpayment involves the accrual or
crediting of leave credits (e.g., vacation, annual leave, or holiday)
or compensating time off. Any errors in sick leave balances may
only be adjusted with sick leave credits.

Absent mutual agreement on a method of reimbursement, the
state shall proceed with recoupment in the manner set forth in
paragraph (2).

(b) An employee who is separated from employment prior to
full repayment of the amount owed shall have withheld from any
money owing the employee upon separation an amount sufficient
to provide full repayment. If the amount of money owing upon
separation is insufficient to provide full reimbursement to the state,
the state shall have the right to exercise any and all other legal
means to recover the additional amount owed.

(c) Amounts deducted from payment of salary or wages pursuant
to the above provisions, except as provided in subdivision (b),
shall begin delete in no event end delete begin insert not end insert exceed 25 percent of the employee’s net
disposable earnings.

(d) No administrative action shall be taken by the state pursuant
to this section to recover an overpayment unless the action is
initiated by written notice to the employee within three years from
begin insert the date of overpayment. If an overpayment involves leave credits,
the date of overpayment is end insert either of the following, whichever is
later:

(1) The date the employee begin delete separates from state service. end delete begin insert receives
compensation in exchange for leave erroneously credited to the
employee. end insert

(2)  begin delete When end delete begin insert If end insert 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.

(e) If the provisions of this section are in conflict with the
provisions of a memorandum of understanding reached pursuant
to Section 3517.5, the memorandum of understanding shall be
controlling without further legislative action, except that if the
provisions of a memorandum of understanding require the
expenditure of funds, the provisions shall not become effective
unless approved by the Legislature in the annual Budget Act.