CalPERS annuitants who work while in retirement prevailed this week in a lawsuit concerning their hourly rate of pay. The annuitants, retired deputies who work as courtroom deputies and courthouse security, filed an unlawful pay suit late last year against Santa Clara County and its Sheriff’s Office pursuant to the law governing CalPERS pensions. A trial court ruled on Wednesday that the County and Sheriff must immediately pay the annuitants minimally the amount paid to regular employees performing comparable duties (“the minimal-pay requirement”).

Carroll Burdick obtained the win on behalf of the Deputy Sheriffs Association of Santa Clara County (“DSA”), which represents Special Duty Officers as well as Deputy Sheriffs. The trial court’s ruling requires the County to pay Special Duty Officers in compliance with the California Public Employees Retirement Law’s (“PERL’s”) minimal-pay requirement. The Legislature sent a message to employers when it included in PERL the ability for CalPERS to seek penalties against public employers who fail to comply with PERL. That did not happen in this instance because the lawsuit was filed not by CalPERS but the Deputy Sheriffs Association of Santa Clara County (“the DSA”), which is the bargaining representative for Special Duty Officers as well as regularly-employed deputies.

But the County will pay dearly nonetheless because it is on the hook for back pay. This is because the County is understaffed—this is why it fills shifts with retirees. And not one shift has been paid at a lawful hourly rate. The court indicated that when it issues its judgment, it will require the County to pay claims dating back nearly four years to November 2010. Although the amount owed to the Special Duty Officers does vary, the County has compensated them below the required amount by roughly six to seven dollars an hour. In short, the County is now on the hook for a significant sum.

The court’s decision indicates PERL is unequivocal with respect to the hourly pay of annuitants performing duties comparable to those of regular employees. The law is structured to provide a disincentive to CalPERS employers who would place retired annuitants into positions for which full-time, regular employees are available.

Here, the County and the Sheriff’s Office tried to dispute the “comparable duties” criteria had been met, by arguing that the retirees do not perform all duties that regular deputies complete. The court saw through this argument. Under the County’s logic, any CalPERS employer could manipulate the law by structuring its job classifications to ensure retirees do not do all of the same work completed by regular employees. This result, the Court stated, is exactly what the legislature meant to avoid when it said retirees do not have to complete the same job—only comparable duties.

If you have any questions, please contact Jonathan Yank at jonathan@majlabor.com.