BILL ANALYSIS Ó SENATE COMMITTEE ON PUBLIC EMPLOYMENT AND RETIREMENT Dr. Richard Pan, Chair 2015 - 2016 Regular Bill No: AB 2028 Hearing Date: 6/27/16 ----------------------------------------------------------------- |Author: |Cooper | |-----------+-----------------------------------------------------| |Version: |6/13/16 As amended | ----------------------------------------------------------------- ----------------------------------------------------------------- |Urgency: |No |Fiscal: |Yes | ----------------------------------------------------------------- ----------------------------------------------------------------- |Consultant:|Glenn Miles | | | | ----------------------------------------------------------------- Subject: School and safety employees: wrongful termination: service credit SOURCE: California Professional Firefighters California School Employees Association ASSEMBLY VOTES: ----------------------------------------------------------------- |Assembly Floor: |76 - 0 | |--------------------------------+--------------------------------| |Assembly Appropriations |16 - 0 | |Committee: | | |--------------------------------+--------------------------------| |Assembly Public Employees, |6 - 0 | |Retirement/Soc Sec Committee: | | ----------------------------------------------------------------- DIGEST: This bill requires that a member of the California Public Employees' Retirement System (CalPERS) who was involuntarily terminated from employment and is later reinstated to the position pursuant to an administrative, arbitral, or judicial proceeding shall be reinstated with all retirement benefits that the member otherwise would have accrued. ANALYSIS: Existing law: AB 2028 (Cooper) Page 2 of ? 1)Requires the State Personnel Board to direct the payment of salary and all interest accrued thereto, and the reinstatement of all benefits, including retirement benefits, that otherwise would have normally accrued whenever the board revokes or modifies an adverse action and orders that a state employee be returned to his or her position. 2)In addition, GC Section 21198 provides the authority to restore service credit for all CalPERS members, who retired after being wrongfully terminated, but before the termination was reversed, pursuant to an administrative or judicial proceeding. This bill: 1)Requires that a CalPERS member who was involuntarily terminated from employment and is later reinstated to the position pursuant to an administrative, arbitral, or judicial proceeding shall be reinstated with all retirement benefits that the member otherwise would have accrued. 2)Provides that the reinstatement of benefits shall be effective as of the date from which salary is awarded in the administrative, arbitral, or judicial proceedings. Additionally, the bill requires that contributions shall be made for any period for which salary is awarded in the proceedings in the amount that the member would have contributed had his or her employment not been terminated. 3)Provides that the member shall receive credit as state service, as defined in Section 20069, for the period for which salary is awarded and contributions are received. 4)Applies to members who are subject to an involuntary termination effective on or after January 1, 2017. 5)Requires the member's employer to notify the CalPERS board of the final decision ordering the member's reinstatement to employment within five days of the date the decision becomes final. The notification shall include the date of involuntary termination and the date on which the member was reinstated to employment after the decision. 6)Provides that if the Commission on State Mandates determines AB 2028 (Cooper) Page 3 of ? that this bill contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code. Background According to CalPERS, under existing law, there are two code sections that permit service credit to be granted retroactively to employees that have been subjected to an involuntary termination which has been subsequently reversed. One section "applies only to state employees and requires the State Personnel Board, when revoking or modifying an "adverse action' and ordering the employee to be returned to his or her position, to direct payment of salary and interest, as well as reinstatement of retirement and other benefits that otherwise would have accrued." The other section "applies to all CalPERS members that retired after an involuntary termination and were subsequently reinstated to their employment." Thus, according to CalPERS, "school members and contracting agency members who do not retire after an involuntary termination do not have any eligibility to have service credit granted regardless of whether or not the termination is reversed." However, CalPERS has apparently applied this interpretation of statute inconsistently in the past and both approved and rejected requests to credit reinstated school employees with service credit for periods corresponding to a wrongful termination. According to the sponsor, "AB 2028 would codify past practice at CalPERS into statute to restore retirement credits for school, safety, and local agency employees and retirees, when it is found that they were wrongfully terminated." Despite past practices, the sponsor states that "CalPERS believes that existing statutes could be deemed insufficient to provide service credit restoration for school, safety, and some local agency employees, as statutorily provided to state employees." Related/Prior Legislation AB 2009 (Papan, Chapter 1195, Statutes of 1985) required the AB 2028 (Cooper) Page 4 of ? State to reinstate benefits that would have accrued to a state employee who had been subject to adverse action which was subsequently reversed, including retirement, medical, dental, and seniority benefits. FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: Yes SUPPORT: California Professional Firefighters (co-source) California School Employees Association (co-source) California Federation of Teachers California Labor Federation Laborers' International Union of North America, Locals 777 Laborers' International Union of North America, Locals 792 Los Angeles County Professional Peace Officers Association Orange County Professional Firefighters Association, Local 3631 Organization of SMUD Employees Peace Officers Research Association of California San Diego County Court Employees Association San Luis Obispo County Employees Association OPPOSITION: None received ARGUMENTS IN SUPPORT: According to the sponsor, This bill codifies past practice at CalPERS. This bill would continue to ensure parity for school and safety workers with state workers. Without this fix, an employee could lose the service credit that he/she otherwise was entitled to, if the wrongful termination never occurred. 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