EMPLOYEE RELATIONS POLICY COMMITTEE Friday, June 20, :00 a.m. 3:00 p.m. Sacramento Convention Center, Room 203, 1400 J Street, Sacramento

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1 EMPLOYEE RELATIONS POLICY COMMITTEE Friday, June 20, :00 a.m. 3:00 p.m. Sacramento Convention Center, Room 203, 1400 J Street, Sacramento Individuals who wish to review the full text of bills included in this packet are encouraged to do so by visiting the League's website at and clicking on "Bill Search" found at the left column. Be sure to review the most recent version of the bill. A G E N D A SPECIAL ORDER: State Budget and Issues Briefing for all policy committee members 10:00 10:45 a.m., Room 204, Sacramento Convention Center I. Welcome and Introductions II. Public Comment III. Discussion on plan to update existing Employee Relations policies Action Item IV. PEPRA Update Informational Speakers: Pamela Schneider, Chief Consultant, Senate PERS Committee Karon Green, Chief Consultant, Assembly PERS Committee V. Mediation and Fact-finding: AB 2126 (Bonta) (Handout) Informational Speaker: Gage Dungy, Attorney, Liebert Cassidy Whitmore VI. Affordable Care Act Informational Speaker: Steve Gedestad, Municipality Practice Leader, Keenan &Associates VII. CalPERS: Risk Pooling and Regional Health Plans Informational Speaker: Danny Brown, Division Chief, CalPERS VIII. Legislative Update (Attachment A) Informational IX. Next Meeting: Annual Conference, Sacramento, September 13, 10:00 - Noon Staff will notify committee members after July 5 th if the policy committee will be meeting in September. Brown Act Reminder: The League of California Cities Board of Directors has a policy of complying with the spirit of open meeting laws. Generally, off-agenda items may be taken up only if: 1) Two-thirds of the policy committee members find a need for immediate action exists and the need to take action came to the attention of the policy committee after the agenda was prepared (Note: If fewer than two-thirds of policy committee members are present, taking up an off-agenda item requires a unanimous vote); or 2) A majority of the policy committee finds an emergency (for example: work stoppage or disaster) exists. A majority of a city council may not, consistent with the Brown Act, discuss specific substantive issues among themselves at League meetings. Any such discussion is subject to the Brown Act and must occur in a meeting that complies with its requirements. NOTE: Policy committee members should be aware that lunch is usually served at these meetings. The state s Fair Political Practices Commission takes the position that the value of the lunch should be reported on city officials statement of economic interests form. Because of the service you provide at these meetings, the League takes the position that the value of the lunch should be reported as income (in return for your service to the committee) as opposed to a gift (note that this is not income for state or federal income tax purposes just Political Reform Act reporting purposes). The League has been persistent, but unsuccessful, in attempting to change the FPPC s mind about this interpretation. As such, we feel we need to let you know about the issue so you can determine your course of action. If you would prefer not to have to report the value of the lunches as income, we will let you know the amount so you may reimburse the League. The lunches tend to run in the $30 to $45 range. To review a copy of the FPPC s most recent letter on this issue, please go to on the League s Website.

2 EMPLOYEE RELATIONS POLICY COMMITTEE Legislative Agenda April 2014 Staff: Alicia Lewis, Legislative Representative (916) SB 1219 (Torres) Public employees retirement: Service after retirement ATTACHMENT A PEPRA and the Public Employees Retirement Law (PERL) both prescribe limits on service after retirement without reinstatement. PERLs limits have been superseded by PEPRA. SB 1219 eliminates provisions of PERL in conflict with PEPRA and clarifies two long standing exemptions for both elected and disabled retirees. Clarifies the ability of retirees to still receive their pension benefits while serving in public office and receiving a salary a long standing and uncontested exemption within the law. Also, clarifies an exemption for disabled retirees, a small group of approximately 230 people, many of whom are disabled public safety officials. These disabled retirees have been allowed to work in a different position, collect that job s salary, and receive part of their pension benefit to bring them up to the salary level they had received prior to being disabled. Minimal fiscal impact; though the Department of Finance wants to have a salary cap for elected officials that serve while receiving a pension. The League supports an exemption for retired CalPERS employees, allowing them to work for CalPERS agency under contract or appointment by the local agency. In order to encourage and facilitate compliance with new benefits, compensation and retirement laws, State laws and regulations should be internally consistent, avoid redundancy and be mindful of the practical challenges associated with implementation. Public retirement system programs should be fair to taxpayers and employees, and provide longterm financial stability and sustainability. Comments: Absent this legislation, CalPERS will likely have to take action and stop pension payments to elected officials that are also receiving a full time salary. The bill is centered on long-standing, non-controversial exemptions. 1

3 League Position: Support. California Public Employee s Retirement System (Sponsor) Association of California Cities, Orange County Rural County Representatives of California California State Association of Counties Opposition: None on file 2

4 2. SB 1251 (Huff) CA Public Employees Pension Reform Act of 2013: joint power authority: employees This bill requires a joint powers authority (JPA) formed by one or more public employers, on or after January 1, 2013, to provide employees meeting specified criteria with the defined benefit plan or formula that was available to employees of the employer on December 31, This bill prohibits the formation of a JPA on or after January 1, 2013, in a manner that exempts a new employee or a new member from the requirements of the Public Employees Pension Reform Act of 2013 (PEPRA). Background: The cities of Brea and Fullerton are attempting to create a Joint Powers Authority (JPA) for joint fire services, and existing personnel from both cities would be transferred into the JPA. However, the passage of the Public Employee Pension Reform Act (PEPRA) introduced a new and unintended challenge into the feasibility of JPA formation. The Brea/Fullerton JPA would be a newly formed public agency. With the adoption of PEPRA in 2012, all new public agencies formed after January 1, 2013, would be required to use the new pension formulas outlined in the law. Because the new pension formulas are reduced, the cities of Brea and Fullerton would not be able to move their current employees over without a loss of benefits even though there would be no lapse in their public service or change in their duties and responsibilities. Consequently, this would prevent the two agencies from taking advantage of the cost and operational efficiencies a JPA would offer. Without the ability to transfer current city employees to the JPA, this good governance effort to consolidate services may become unworkable. Public retirement system programs should be fair to taxpayers and employees, and provide longterm financial stability and sustainability. League Position: Support City of Brea (co-source) City of Fullerton (co-source) Opposition: None on file 3

5 3. AB 1522 (Gonzalez) Employment: Paid sick days This bill would require employers, including cities, counties and special districts to provide one hour of paid sick leave for every 30 hours worked. AB 1522 also requires employers to track employees accrual of sick leave even after they have separated from service. Provides that paid sick days may accrue and be carried over to the following year; however, employers may limit their use to 24 hours or 3 days in each calendar year. Provides that an "employee" does not include: o An employee covered by a valid collective bargaining agreement that expressly provides for paid sick days or similar policy, as specified. o An employee in the construction industry covered by a valid collective bargaining agreement that was entered into before January 1, 2015 or waives the requirements of this bill, as specified. Background: Existing law authorizes, but does not require, employers to provide their employees with paid sick leave. Any employer that chooses to provide sick leave must allow an employee to use accrued and available sick leave, in an amount not less than the sick leave that would be accrued during six months at the employee s then current rate of entitlement. Sick leave can be used by the employee for any of the following reasons: Being physically or mentally unable to work due to illness, injury, or a medical condition of the employee. Obtaining professional diagnosis of treatment for a medical condition of the employee. Other medical reasons of the employee, such as pregnancy or obtaining a physical examination. To attend to an illness of a child, parent, spouse, or domestic partner of the employee. According to the Assembly Appropriations Committee: o Initial costs of $1.2 million (special funds) to the Department of Industrial Relations associated with training, rulemaking, investigation and enforcement of complaints. o Ongoing costs of $1.1 million to DIR for ongoing investigation and enforcement of wage and retaliation claims. o Potential costs of $500,000 to $800,000 (GF) to the Attorney General for investigation and prosecution of statutory violations, to the extent the bill leads to increased civil action. o Major costs to state and local governments in California, for example, employee-related costs related to in-home supportive services (IHSS). There are an estimated 385,485 providers that average 1,261 hours of work annually. Divided by the accrual rate of 30 hours specified in this bill, a provider would accrue approximately 42 days of sick 4

6 leave annually. Providers make an average wage of $ Assuming this hourly wage adjustment, multiplied by days accrued on an annual basis, multiplied by the estimated 385,485 providers, the cost of the annual accrued time would be approximately $200 million. The League believes that the standard practice for establishing employee compensation should be reasonably based upon market conditions, transparent and tied to experience, benefits and salaries at comparable agencies. Compensation should also be based on job requirements, the complexity of both the make-up of the city organization and community, the leadership needed, labor market conditions, and the organizations ability to pay. League Position: Oppose California Labor Federation, AFL-CIO (Co-Sponsor) California State Council of the Service Employees International Union (Co-Sponsor) Alameda Labor Council, AFL-CIO American Federation of State, County and Municipal Employees, AFL-CIO California Catholic Conference of Bishops California Communities United Institute California Employment Lawyers Association California Medical Association California Nurses Association California Professional Firefighters California School Employees Association, AFL-CIO California State Association of Electrical Workers California State Pipe Trades Council California Teachers Association California Work and Family Coalition Communication Workers of America, AFL-CIO, District 9 Consumer Attorneys of California Family Caregiver Alliance Health Officers Association of California Legal Aid Society - Employment Law Center Next Generation Parent Voices United Domestic Workers of America, AFSCME, Local 3930 Western Center on Law and Poverty Western State Council of Sheet Metal Workers Young Invincibles 9to5 National Association of Working Women 5

7 Opposition: Acclamation Insurance Management Services Air Conditioning Trade Association Alhambra Chamber of Commerce Allied Managed Care Associated Builders and Contractors - San Diego Chapter Associated Builders and Contractors of California Associated General Contractors Association of California Healthcare Districts Brawley Chamber of Commerce Brea Chamber of Commerce California Asian Chamber of Commerce California Association of Health Facilities California Association of Joint Powers Authorities California Association of Licensed Security Agencies, Guards and Associates California Association of Sheet Metal Air Conditioning Contractors, National Association California Association of Winegrape Growers California Attractions and Parks Association California Automatic Vendors Council California Bankers Association California Beer & Beverage Distributors California Business Properties Association California Business Roundtable California Chamber of Commerce California Chapter of American Fence Association California Chapters of the National Electric Contractors Association California Employment Law Council California Farm Bureau Federation California Fence Contractors Association California Grocers Association California Hotel & Lodging Association California Independent Grocers Association California League of Food Processors California Legislative Conference of the Plumbing, Heating and Piping Industry California Manufacturers and Technology Association California New Car Dealers Association California Newspaper Publishers Association California Pool and Spa Association California Professional Association of Specialty Contractors California Restaurant Association California Retailers Association California Special Districts Association California State Association of Counties California Travel Association California Trucking Association Carlsbad Chamber of Commerce CAWA Representing the Automotive Parts Industry Cerritos Regional Chamber of Commerce Chambers of Commerce Alliance of Ventura & Santa Barbara Counties City of La Mirada Dana Point Chamber of Commerce Desert Hot Springs Chamber of Commerce and Visitors Center El Centro Chamber of Commerce Flasher Barricade Association Fountain Valley Chamber of Commerce Fullerton Chamber of Commerce Gateway Chambers Alliance Greater Bakersfield Chamber of Commerce Greater Conejo Valley Chamber of Commerce Greater Fresno Area Chamber of Commerce Greater Riverside Chambers of Commerce Greater San Fernando Valley Chamber of Commerce Huntington Beach Chamber of Commerce League of California Cities Lodi Chamber of Commerce Long Beach Area Chamber of Commerce Marin Builders Association National Federation of Independent Business Orange County Business Council Oxnard Chamber of Commerce Palm Desert Area Chamber of Commerce Plumbing-Heating-Cooling Contractors Association of California Porterville Chamber of Commerce Redondo Beach Chamber of Commerce Rural County Representatives of California San Diego East County Chamber of Commerce San Gabriel Valley Coalition San Jose Silicon Valley Chamber of Commerce Santa Clara Chamber of Commerce and Convention-Visitors Bureau Simi Valley Chamber of Commerce Society for Human Resource Management Southwest California Legislative Council Tahoe Chamber of Commerce Torrance Area Chamber of Commerce Turlock Chamber of Commerce Urban Counties Caucus Visalia Chamber of Commerce Western Electrical Contractors Association Western Growers Association Wine Institute 6

8 3. AB 2052 (Gonzalez) Presumptions of compensability The bill expands the listing of peace officers that qualify for various workers compensation presumptions. This would include ALL classes of peace officers. Existing work related presumptions: cancer, lower back impairment, hernia, heart trouble, tuberculosis, pneumonia, meningitis, and biochemical exposures. Background: Existing law provides for a comprehensive system of workers' compensation benefits to be provided to workers whose injuries or conditions arise out of or in the course of employment. Current law requires that a worker must establish that his or her injury or condition was work related. There are exceptions for certain firefighter and peace officer employees to the requirement that the injured worker establish that the injury or condition was work related, and instead grants a presumption that the injury or condition is work related. State: $800,000 (GF) Local: Approx. 15,000 peace officers/ $6 million across counties. The League supports the principles of narrow causation and definition of injury and supports requiring the employee to prove by clear and convincing evidence that sudden or extraordinary employment conditions were the predominant causes for the injury. The League supports existing workers compensation laws to be liberally construed only after an injury is deemed specific and consists of serious physical or bodily harm. League Position: Oppose Peace Officer's Research Association of California (sponsor) California Applicants' Attorneys Association Opposition: California State Association of Counties League of California Cities Rural County Representatives of California CSAC Excess Insurance Authority California Coalition on Workers' Compensation California Association of Joint Powers Authorities 7

9 4. AB (2378) Firefighters and Peace Officers: Temporary Disability Benefits: AB 2378 would provide public safety personnel with up to three full years: one year of 4850 time, and two years at 2/3rds salary. The bill would make these provisions applicable to all claims, regardless of the date of injury. The bill would also make related findings and declarations. Background: All non-public safety employees can receive up to two years of payments at 2/3rds of their existing salary, and public safety personnel receive one full year of full salary (4850) then the second year at 2/3rds of salary. The bill contains findings and declarations regarding the Legislative intent on AB 338 (Coto; 2007). Overturns the court ruling in County of Alameda v. Workers' Compensation Appeals Board (Knittel) (2013) 213 Cal.App.4th 278. State: Assuming 4 officers get additional year of benefits: $220,000 (GF &Special Fund) Local: Assuming 50 officers: cities and counties increased cost of approx. $3 million. The League supports existing workers compensation laws to be liberally construed only after an injury is deemed specific and consists of serious physical or bodily harm. The League supports reforming the way temporary disability (TD) benefits are awarded by increasing the amount of time an injured worker receives TD benefits while at the same time eliminate the disincentive to return to work. League Position: Oppose California Professional Firefighters (CPF) (sponsor) California Labor Federation (co-sponsor) American Federation of State, County and Municipal Employees (AFSCME) Association for Los Angeles Deputy Sheriffs Glendale City Employees Association Los Angeles Probation Officers' Union AFSCME, Local 685 Organization of SMUD Employees Riverside Sheriffs' Association San Bernardino Public Employees Association San Luis Obispo County Employees Association Opposition: California Association of Joint Powers Authorities (CAJPA) California Coalition on Workers' Compensation California Joint Powers Insurance Authority CSAC Excess Insurance Authority League of California Cities Los Angeles County Board of Supervisors 8