State Workers Impacted by Executive Order and CalPERS Changes

COVID-19 Executive Order N-25-20On March 12, 2020, Governor Gavin Newsom issued Executive Order N-25-20. This was in response to the unprecedented COVID-19 pandemic and signified an effort to curb the spread of the virus. The executive order has several elements, ranging from formal orders to heed guidance of state and local public health officials, to amendments to the Unemployment Insurance Code and Health and Safety Code.

One of the elements of the executive order that has NOT received much attention, however, has been the portion pertaining to CalPERS:

“The Governor’s Office of Emergency Services shall ensure adequate state staffing during this emergency. Consistent with applicable federal law, work hour limitations for retired annuitants, permanent and intermittent personnel, and state management and senior supervisors, are suspended. Furthermore, reinstatement and work hour limitations in Government Code sections 21220, 21224(0), and 7522.56(b), (d), (f}, and (g), and the time limitations in Government Code section 19888.1 and California Code of Regulations, title 2, sections 300-303 are suspended. The Director of the California Department of Human Resources must be notified of any individual employed pursuant to these waivers.”

In response to the executive order, CalPERS issued Circular Letter 200-015-20 which further outlined the restrictions that are formally suspended for the duration of the state of emergency caused by the COVID-19 pandemic, as outlined below.

Official Timeline

The start date of the state of emergency was March 4, 2020. All suspensions of the retired annuitant work hour limitation and wait period exception will remain in place until the state of emergency is lifted.

Work Hour Limitation Expectation

The aim of the work hour limitation expectation is to suspend reinstatement and the retired annuitant work hour limitation of 960 hours per fiscal year during the state of emergency. By way of the executive order, all hours worked by a retired annuitant to ensure adequate staffing during the state of emergency will not be counted toward the 960-hour limit for the fiscal year. The reasons outlined for this are to comply with applicable federal law, and to guarantee adequate state staffing to expedite emergency response and recovery.

Wait Period Exceptions

The 180-day break in service requirement under Government Code section 7522.56(f) is also suspended for retired annuitants hired in order to ensure adequate staffing during the state of emergency. Furthermore, under subdivision (c) of section 586.2 of Title 2 of the California Code of Regulations (CCR), the declaration of a state of emergency exempts retired annuitants from the 60-day separation in service requirement under subdivision (a)(2) of CCR section 586.2. However, it is important to note that the prohibition under subdivision (a)(1) of CCR section 586.2 on any predetermined agreement between an employer and an impeding retiree who has not reached normal retirement age, continues to remain in effect, consistent with federal law.

Compliance Moving Forward

In light of this executive order, agencies must continue to enroll and report retired annuitants to CalPERS. The remaining provision for working after retirement per Government Code sections 2122(h), 21224(a) and 7522.56(e) will continue to apply:

  • Compensation for appointment shall not exceed the maximum monthly base salary paid to other employees performing comparable duties as listed on a publicly available pay schedule divided by 173.333 to equal hourly rate
  • A retired annuitant shall not receive any benefit, incentive, compensation in lieu of benefits, or other form of compensation in addition to the hourly pay rate.

The emergency proclamation applied to work performed by a retired annuitant hired to ensure adequate staffing during the state of emergency. The director of California Department of Human Resources must be notified of any individual employed pursuant to these waivers. Notifications should be sent to [email protected]

Goyette & Associates has decades of experience with labor and employment matters, including specific retirement issues. The situation at hand is rapidly evolving, so please check back for updates and additional or subsequent posts on retirement issues.

If you have any questions or comments, or are in need of representation, please contact  Goyette & Associates at [email protected] or at (916) 851-1900