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AB-2365 Public Employees’ Retirement System: employment without reinstatement.(2019-2020)



Current Version: 05/04/20 - Amended Assembly

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AB2365:v97#DOCUMENT

Amended  IN  Assembly  May 04, 2020
Amended  IN  Assembly  March 10, 2020

CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Assembly Bill
No. 2365

Introduced by Assembly Member Rodriguez

February 18, 2020

An act to add Section 21220.1 to amend Sections 21202 and 21220 of the Government Code, relating to public employees’ retirement.


LEGISLATIVE COUNSEL'S DIGEST


AB 2365, as amended, Rodriguez. Employment without reinstatement: hours worked: written notice. Public Employees’ Retirement System: employment without reinstatement.
Existing law, the Public Employees’ Retirement Law (PERL), creates the Public Employees’ Retirement System (PERS), which provides pension and disability benefits to its members and prescribes their rights and duties. Existing law, the Public Employees’ Pension Reform Act of 2013 (PEPRA), prescribed various limitations on public employees, employers, and retirement systems concerning, among other things, work after retirement. PERL generally prohibits retired PERS members from working for an agency participating in the system without reinstatement in the system, unless that employment is otherwise specifically authorized. PEPRA also prohibits retirees from serving or being employed directly, or through a contract, with a public employer, as defined, in the same retirement system from which they receive their benefits, except as expressly permitted. Both PERL and PEPRA generally prescribe limits on the manner and duration that retired members may be employed without reinstatement. PERL requires a person who is employed in violation of its reinstatement requirements to be reinstated in the member category previously held and on the date on which the unlawful employment occurred. In these circumstances, PERL requires that a retired member reimburse the system for the person’s allowance received during the periods of the unlawful employment, to pay to the system employee contributions that otherwise should have been paid, and to contribute for associated administrative expenses, as specified. PERL requires employers in these circumstances to pay to the system the employer contributions that otherwise should have been paid and to contribute for associated administrative expenses, as specified.
This bill would eliminate the above-described requirement that a person employed without reinstatement in a manner other than authorized by PERL be reinstated, instead providing that reinstatement permissive. The bill would make conforming changes and make specific reference to the duties of employees and employers regarding reinstatement after retirement in violation of PEPRA.

The Public Employees’ Retirement Law creates the Public Employees’ Retirement System (PERL), which provides a defined benefit to members of the system based on age at retirement, service credit, and final compensation, subject to certain variations, and is administered by the Board of Administration of the Public Employees’ Retirement System. PERL permits a retired person to serve without reinstatement from retirement or loss or interruption of benefits provided by the system if certain conditions are met, and prohibits specified retired members from working more than 960 hours each fiscal year, regardless of whether the work is performed for multiple employers. PERL authorizes the board to assess a specified fee on an employer that fails to enroll, solely for the administrative recordkeeping purposes of the system, a retired member employed in any capacity, without reinstatement, within 30 days after the effective date of hire, or that fails to report the pay rate and number of hours worked by the retired member within 30 days of the last day of the pay period in which the retired member worked, as specified. PERL requires a person employed in violation of these provisions, to be reinstated, among other things, to membership in the category in which, and on the date on which, the unlawful employment occurred.

This bill would require the board to provide a written notice to a retired member employed in any capacity, without reinstatement, informing the retired member of the number of hours worked by the retired member for an employer, as reported to the board by the employer, and the obligations of, and consequences to, the retired member for violation of the reinstatement provisions described above. The bill would require the same notice to be provided to an employer for each retired member employed by the employer, and would require the written notice to inform the employer of the obligations of, and consequences to, the employer for violation of the reinstatement provisions described above. The bill would require the board to provide the written notices before the retired member is within 120 hours of the applicable work hour limitation, and would authorize the board to provide subsequent written notices at its discretion.

Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Section 21202 of the Government Code is amended to read:

21202.
 A person employed in violation of Section 21220 shall may be reinstated to membership in the category in which, and on the date on which, the unlawful employment occurred.

SEC. 2.

 Section 21220 of the Government Code is amended to read:

21220.
 (a) A person who has been retired under this system, for service or for disability, may not be employed in any capacity thereafter by the state, the university, a school employer, or a contracting agency, unless the employment qualifies for service credit in the University of California Retirement Plan or the State Teachers’ Retirement Plan, unless he or she the person has first been reinstated from retirement pursuant to this chapter, or unless the employment, without reinstatement, is authorized by this article. A retired person whose employment without reinstatement is authorized by this article shall acquire no service credit or retirement rights under this part with respect to the employment.
(b) Any retired member employed in violation of this article article, Section 7522.56, or Section 7522.57 shall:
(1) Reimburse this system for any retirement allowance received during the period or periods of employment that are in violation of law.
(2) Pay to this system an amount of money equal to the employee contributions that would otherwise have been paid during the period or periods of unlawful employment, plus interest thereon. thereon, if reinstated pursuant to Section 21202.
(3) Contribute toward reimbursement of this system for administrative expenses incurred in responding to this situation, to the extent the member is determined by the executive officer to be at fault.
(c) Any public employer that employs a retired member in violation of this article article, Section 7522.56, or Section 7522.57 shall:
(1) Pay to this system an amount of money equal to employer contributions that would otherwise have been paid for the period or periods of time that the member is employed in violation of this article, plus interest thereon. thereon, if reinstated pursuant to Section 21202.
(2) Contribute toward reimbursement of this system for administrative expenses incurred in responding to this situation, to the extent the employer is determined by the executive officer of this system to be at fault.
(d) If an employer fails to enroll, solely for the administrative recordkeeping purposes of the system, a retired member employed in any capacity, without reinstatement, within 30 days of the effective date of hire, the board may assess the employer a fee of two hundred dollars ($200) per retired member per month until the retired member is enrolled in those administrative aspects of the system.
(e) If an employer fails to report the pay rate and number of hours worked of a retired member employed in any capacity, without reinstatement, within 30 days following the last day of the pay period in which the retired member worked, the board may assess the employer a fee of two hundred ($200) per retired member per month until the information is reported.
(f) An employer shall not pass on to an employee any fees assessed pursuant to subdivisions (d) and (e).

SECTION 1.Section 21220.1 is added to the Government Code, to read:
21220.1.

(a)(1)The board shall provide a written notice to a retired member employed in any capacity, without reinstatement, by an employer. The written notice shall inform the retired member of the number of hours worked, in any capacity, without reinstatement, by the retired member for the employer as reported to the board by the employer pursuant to this article, and the obligations of, and consequences to, the retired member for violation of the requirements of this article.

(2)The board shall provide the first written notice to the retired member before the retired member is within 120 hours of the applicable work hour limitation established in Section 7522.56, 7522.57, or 21221. The frequency of providing subsequent written notices to a retired member shall be at the discretion of the board.

(b)(1)The board shall provide a written notice to an employer for a retired member, or retired members, employed in any capacity, without reinstatement, by the employer. The written notice shall inform the employer of the number of hours worked, in any capacity, without reinstatement, by each retired member, or members, for the employer as reported to the board by the employer pursuant to this article, and the obligations of, and consequences to, the employer for violation of the requirements of this article.

(2)The board shall provide the first written notice to an employer before the retired member is within 120 hours of the applicable work hour limitation established in Section 7522.56, 7522.57, or 21221. The frequency of providing subsequent written notices to an employer shall be at the discretion of the board.