BILL ANALYSIS Ó
AB 2735
Page 1
Date of Hearing: April 27, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
AB
2735 (Jones-Sawyer) - As Introduced February 19, 2016
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|Policy |Public Employees, |Vote:|7 - 0 |
|Committee: |Retirement/Soc Sec | | |
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Urgency: No State Mandated Local Program: NoReimbursable: No
This bill allows state confidential, supervisory, excluded, or
managerial employees to elect to be paid at their regular rate
of pay for up to 80 hours of unused leave credit, which can
consist of a combination of vacation leave, annual leave,
personal leave, personal holiday, or holiday credit, if the
California Department of Human Resources (CalHR) chooses to
offer a leave buyback program.
AB 2735
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FISCAL EFFECT:
1)Unknown but absorbable costs for departments to offer
additional hours as part of a leave buyback program, if CalHR
determines that existing budgetary resources for a state
agency can accommodate the additional hours available for
buyback.
2)Longer-term cost savings as a result of shifting future costs
forward. Leave buyback programs are thought to generate
long-term savings and are considered one strategy to curb the
growth in unfunded leave liabilities.
COMMENTS:
1)Leave buyback programs. Existing CalHR regulations establish
the Excluded Employee Buyback Program, which authorizes
payment of leave credits to employees who are excluded from
collective bargaining. Each year, CalHR determines whether or
not a leave buyback will be offered.
Existing policy also allows different buyback amounts for
different employees. Some managers are allowed 80 hours while
non-managers, which includes supervisors, confidential, or
other excluded employees), are allowed up to 40 hours of leave
buyback.
AB 2735
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These policies are set differently than leave buyback programs
established through collective bargaining for non-excluded
employees. For instance, the author notes that under a
recently negotiated MOU for Bargaining Unit 9, rank and file
state engineers and scientists are provided up to 80 hours of
leave buy-back in a given year. MOUs such as this one
authorize a director of a department to set a maximum number
of leave hours that can be bought back, and these maximum
hours varies by bargaining unit.
2)Purpose. According to the author, AB 2735 will equate the
number of hours for buy back to 80 for both state supervisors
and managers, removing the discrepancy in the number of hours
offered.
3)Fiscal impact of leave buyback programs. One practical impact
of a leave buyback program is that a state department shifts
potential costs forward. As a result, when a leave buyback
program is offered, funds are being expended that otherwise
wouldn't be. However, there are a number of important
considerations in determining whether a leave buyback program
is ultimately determined to be a fiscal cost:
a) Departments will typically offer a leave buyback option
only if existing budgetary resources allow for it.
Therefore while these programs have a fiscal cost, they are
not seen as having an effect on the overall budget and are
designed to be absorbable.
AB 2735
Page 4
b) Leave buyback programs can also help reduce employers'
long-term leave liabilities. Many state employees can cash
out their leave upon retirement, and the value of that cash
out depends on an employee's salary at retirement. A leave
buyback program encourages employees to cash out unused
leave earlier, often when their salaries are lower. For
this reason, a leave buyback program is considered one
policy option to curb the growth in unfunded leave
liabilities.
Analysis Prepared by:Luke Reidenbach / APPR. / (916)
319-2081