BB&K 2013 ANNUAL LABOR & EMPLOYMENT LAW UPDATE 1

NEW LEGISLATION RELATING TO PUBLIC EMPLOYERS

Assembly Bill 1203 - Paid Leaves of Absence for Unelected Members

Existing law requires that the governing board of a school district or a community college district grant to any classified employee, upon request, a paid leave of absence to enable the employee to serve as an elected officer of any school district public employee organization or community college district public employee organization, as specified. Existing law requires that following the school district’s or community college district’s payment of the employee for the leave of absence, it be reimbursed by the employee organization of which the employee is an elected officer for all compensation paid to the employee on account of the leave. AB 1203 amends sections 45210 and 88210 of the Education Code and expands these provisions to additionally require a school district or a community college district to provide a paid leave of absence to a classified employee who is an unelected member of a school district public employee organization or community college district public employee organization for activities the member is authorized by the organization to attend and requires the employee organization to reimburse the school district or community college district on behalf of an unelected member who receives a paid leave of absence. It also requires an employee organization to provide reasonable notification to the employer requesting a leave of absence without loss of compensation for any of the above-described activities. The new legislation becomes effective January 1, 2013.

Assembly Bill 1908 – Increase in Notification Time for Layoffs of Classified Employees

Under existing law, classified employees of school districts and community college districts subject to layoff as a result of the expiration of a specially funded program at the end of a school year are required to be given written notice on or before April 29 informing them of certain rights. Existing law also requires that notice be given not less than 45 days before the effective layoff date if the termination date of a specially funded program is other than June 30, or if classified employees are subject to layoff as a result of a bona fide reduction or elimination of a service performed by a department. AB 1908 amends sections 45117 and 88017 of the Education Code. Written notice must be given to a classified employee of a school district or community college district subject to layoff not less than 60 days before the effective layoff date if the termination date of a specially funded program is other than June 30, or if a classified employee is subject to layoff as a result of a bona fide reduction or elimination of a service performed by a department. To the extent that this bill would impose new duties on school districts and community college districts, it would impose a state-mandated local program. The new legislation becomes effective January 1, 2013. Assembly Bills 340 and 197 – Public Employees’ Pension Reform Act On the last day of the 2012 legislative session, the California Legislature adopted AB 340 and AB 197 (“AB 340”) — comprehensive state-wide pension reform unlike anything seen before in California, or anywhere in the nation. AB 340, which goes into effect on January 1, 2013, amends various provisions of the Public Employees' Retirement Law ("PERL"), Teachers' Retirement Law ("TRL") and County Employees' Retirement Law of 1937 ("CERL"). However, the centerpiece of AB 340 is the California Public Employees' Pension Reform Act ("Act").

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The extent to which AB 340 will affect your agency will vary based on the retirement system in which your agency participates, or the provisions of your retirement plan if your agency has adopted a standalone plan. It will also depend on the terms of any contract covering retirement benefits, including memoranda of understanding, personnel policies or employment contracts. The Act applies to nearly all public employers in California. However, the University of California system, charter cities and charter counties are exempt unless these entities participate in retirement systems governed by state statute (e.g., CalPERS, CalSTRS or county plans adopted pursuant to CERL). Accordingly, the various pension reforms contained in the Act, apply to nearly all public employers with the exceptions stated above. The key provisions of AB 340 that are of interest to local public agencies, including counties, cities, special districts and school districts, include the following ten pension reform measures: (1) equal sharing of the annual normal cost of benefits; (2) compulsory reduced retirement formulas and increased retirement ages; (3) limitations on pensionable compensation; (4) anti-spiking provisions; (5) limitations on post-retirement employment; (6) forfeiture of pension benefits upon the conviction of certain felonies; (7) equal health benefits; (8) prohibition of pension funding holidays; (9) final compensation for local elective or appointive office; and (10) improved industrial disability retirement benefits. While some of these pension reform measures will apply to all employees, most will only apply to what the Act refers to as new members. The term "new member" means: (1) an individual who has never been a member of any public retirement system prior to January 1, 2013; (2) an individual who was a member of any other public retirement system prior to January 1, 2013, but was not subject to reciprocity; or (3) an individual who was an active member in a retirement system who returns to active membership in that same system with a new employer after a more than six month break in service. The bill for the pension reform package clean-up has been introduced, SB 13. This is an urgency bill, so as soon as it is signed into law, it will become effective. It is anticipated that this bill will be used to address several areas of clean-up and may be passed in a very different form than as introduced. For detailed analysis and information on the Act and to keep up-to-date on proposed clean-up legislation, visit bbklaw.com.

Assembly Bill 1606 – Provides Further Clarification on MMBA Fact-finding Requirements of AB 646 adopted in 2012

AB 1606 amends the fact-finding provision under the MMBA (Gov. Code section 3505.4). The bill confirms that mediation is not a prerequisite to fact-finding under the MMBA. The language used in the bill largely mirrors PERB Regulation 32802 which provides that if the collective bargaining dispute was not submitted to mediation, an employee organization may request that the parties' differences be submitted to a fact-finding panel not later than 30 days following the date that either party provided the other with a written notice of a declaration of impasse. The bill also adds Gov. Code section 3505.4, subdivision (e), which states that, ”The procedural right of

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an employee organization to request a fact-finding panel cannot be expressly or voluntarily waived.”

Senate Bill 1021 – Further Amends Rules on the Employment of CalPERS Retirees

The provisions of SB 1021 were made effective in July 2012 as emergency legislation clarifying the rules on employing CalPERS retirees pursuant to Government Code Sections 21221(h), 21224 and 21229, in what is described as an attempt to clarify the ambiguity created by AB 1028 (2011). One of the most significant changes is the addition of the requirement in sections 21221(h), 21224 and 21229 that compensation paid to a retiree must be reflected as an hourly rate which is no higher than the maximum monthly base salary paid to employees performing similar duties, as listed on a publicly available pay schedule, divided by 173.333 to equal an hourly rate. In addition, retirees may not receive any benefits or compensation in lieu of benefits. One of the most controversial changes made by AB 1028 was the addition of the word “temporary” in reference to appointments made pursuant to Sections 21224, the provision most often used by public agencies to employ retirees for temporary part-time work. The addition of this single word was interpreted by some as limiting the length of appointments which could be made pursuant to Section 21224. However, according to CalPERS the word “temporary” was actually added to distinguish between permanent (i.e., positions listed on a publicly available pay schedule) and non-permanent positions. CalPERS has taken the position that Section 21224 cannot be used to temporarily fill vacant positions, but should be used for extra help and special projects. Again, according to CalPERS, the restriction on the duration of an appointment made pursuant to Section 21224 was in place before AB 1028, as reflected in the words “limited duration” in 21224. It is important to note that these words remain in Section 21224, notwithstanding the amendments made by SB 1021. In other words, except as described in the preceding paragraph, SB 1021 seems only to return us to the status quo with respect to Section 21224. The preceding also applies to appointments made pursuant to Section 21229 (the school district version of Section 21224). In contrast, SB 1021 has made some substantial changes to Section 21221(h), which applies to permanent positions. According to CalPERS, Section 21221(h) governs the appointment of a retiree to any vacant position during recruitment for a permanent appointment. The amendments made by SB 1021 limit a retiree to a total of 960 hours in a fiscal year, regardless of whether the retiree works for one or more contracting agencies. Agencies that appoint a retiree pursuant to Section 21221(h) no longer have the option of requesting an extension to the 960 hour limitation, however the appointment is not limited to 12 months. AB 2307 – School Employees: Reemployment Existing law requires that persons laid off because of lack of work or lack of funds in a school district or community college district that has adopted the merit system be eligible for reemployment for a period of 39 months, as specified. AB 2307 requires a person who is

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reemployed in a new position and fails to complete the probationary period in the new position be returned to the reemployment list for the remainder of the 39-month period, as specified. The bill also would make nonsubstantive changes to these provisions.

AB 2125 – School District Employees: Appointments in Merit System Existing law requires all vacancies in the classified service of a school district that has adopted the merit system to be filled from applicants on eligibility lists that are made up from promotional examinations or by appointments made by means of transfer, demotion, reinstatement, or reemployment, as specified. If a vacancy is filled from applicants on an eligibility list, the appointment is required to be made from the eligible candidates having the first 3 ranks on the list who are ready and willing to accept the position. Existing law also authorizes, in a school district that has adopted the merit system, an appointment to be made from other than the first 3 ranks on the eligibility list when the ability to speak, read, or write a language in addition to English, or possession of a valid driver's license, is a requirement of the position to be filled, but in that case existing law requires the appointment to be made from among the highest 3 ranks of applicants on the list who meet the special requirements and are ready and willing to accept the position. This bill, until December 31, 2015, in a school district with a pupil population over 400,000, would authorize an appointment to specified classifications of positions to be made from other than the first 3 ranks on the eligibility list if specialized licenses, certifications, knowledge, or ability that cannot reasonably be acquired during the probationary period or a specific gender is required for successful job performance of a position, in which case the appointment would be required to be made from among the highest 3 ranks of applicants on the list who meet the special requirements and are ready and willing to accept the position. The bill also would require a school district that makes an appointment under this provision to study the effectiveness of the selection method, the vacancy rates for each class, and the length of time to hire for each class, and submit a report of its findings to any affected labor union.