Assembly Standing Committee on Public Employment and Retirement

Good morning, and welcome to the public, to the to the public and members to the Assembly Committee on Public Employment and retirement. Almost forgot where I was. Sorry. Before we begin, I have several announcements. Assembly member Garcia is absent for this hearing and there is no substitute.

For this hearing, we will be limited limiting substitute testimony to two primary witnesses on each side of the bill. And each will have two minutes. All others may only state their names, organizations, if any, and positions on the bill. As a reminder, primary witnesses and support must be those accompanying the author or who otherwise has registered support in position, a support position with the committee.

Primary witnesses in opposition must have their opposition registered with the committee, all other support, and opposition can state that start can be stated at the standing mic when called upon to simply state your name, organization, and position.

For committee members, because our hearings are public and some travel far to be heard. Have respect for them and the author. Please wait until the debate has concluded before making a motion so that the public has an idea of what the bill is about and why it is proposed. If a motion is made before debate has concluded, I'll simply say that the motion will be recognized at an appropriate time. I don't think anyone has done that this whole year, but thank you members that are here.

For authors, you you'll note that our hearing is public a publicly notice as file order. Your staff should be monitoring this hearing to assist you with coming at the appropriate time to present your bill. So members, please try and make it down, to the hearing room. Members, we I think we may be establishing a quorum. Yeah.

Members, we have established a quorum. Secretary, please call the roll to establish a quorum.

[Roll Call]

Before we start with the remainder of the agenda, I'll remind everyone that we're limiting testimony to two primary witnesses on each side of the bill, and each will have two minutes to speak to the bill. Everyone else must only state their name, organization, if any, and position. Let's start with file number. Item number one, Laird. And what is the bill number? SB939 Laird.

Thank you, Madam Chair. This bill is sponsored by and and by the way, I served on this committee when I was in the assembly and we met in this room. So, I see nothing has changed. That's been twenty years, I think. So, but Senate Bill 939 is sponsored by the California Public Employees Retirement System or CalPERS.

The bill simplifies the options to purchase service credit at the time of retirement or post retirement. In 2020, CalPERS introduced a system that was called the actuarial equivalent reduction or AER for members that are purchasing service credit. That option allows the retiree to receive the entire benefit, including for any unpaid service credit in exchange for a permanent reduction in their service credit. Unfortunately, this hasn't really worked. There have been unintended consequences, for members and their families.

They may end up paying more than was owed for the credit purchase given that it's a permanent reduction. For CalPERS and employers, it creates cost pressures because they're paying for increased benefits that aren't fully funded at the time of retirement, which limits their ability to invest and compound the contributions. And additionally, this has increased the administrative workload needed to calculate and distribute benefits. So this bill discontinues enrollment in AER on or after 01/01/2028.

Instead, any unpaid balance at the time of retirement will need to be paid in full within ninety days, which is longer than the prior practice before this program went into effect.

And and it will encourage members to purchase service credit earlier in life and ensure service credit purchases are paid in full and funded at the time of retirement. The bill has no opposition. It's received unanimous bipartisan support. And here with me for technical questions is Danny Brown from CalPERS. And at the appropriate time, I would respectfully ask for an Aye vote.

Thank you. Not just for technical. Just for technical. Do they have do we have any witnesses in support? Please come to the mic and state your name, organization, and position.

Seeing none, any witnesses in opposition, please come up to the mic and state your name, organization, and and position. Seeing none, any any questions from the members?

Move the bill. Thank you.

The bill was moved by Assembly member Lackey, second by Assembly member Nguyen. Please call the roll, ma'am.

I respectfully ask for an Ayevote.

Would you like to close?

I'll cut it short and let you get.

I know. At all. Thank you. Thank you. Please call the roll.

Thank you. Thank you. Please call the roll.

Item number one, SB939. The motion is due passed, and we refer to the committee on appropriations. [Roll Call] We have a sufficient of us. We'll put this on hold.

Lackey.

Aye.

Lackey, Aye. Alaniz, Berner, Garcia, Nguyen. Nguyen. Nguyen, Aye. Alaniz, Aye.

Rodriguez. Rodriguez, Aye. We have a sufficient of us. We'll put this on hold.

Thank you. Next, we'll have item number two, Laird SB 1038.

Thank you.

Thank you, Madam Chair and and committee Members. Senate Bill 1038 is sponsored by the California School Employees Association, CSEA, and ex expands the CalPERS audit notification process to ensure that unions receive proper notice when their members' employers are being audited. This is significant because audit findings can result in members' monthly benefits being reduced or even being required to repay CalPERS a lump sum in cases where there was an overpayment even if it was inadvertent.

Currently, there's no mechanism requiring unions to receive notification when CalPERS intends to conduct an audit of an employer. A key example of what this bill was trying to address was with an audit that was done by CalPERS on Kern High School District in 2020, which revealed that special compensation for employee longevity was incorrectly included in employee base rates.

It took the school district in CalPERS three years after the final audit report to fix the air. And during these three years, one pay rate left an employee with an $88,400 bill through no fault of their own. So this bill requires employees to forward the initial audit notification, a list of the affected members in the final audit report to the relevant bargaining unit.

And these notifications allow unions to property inform and advocate for their members, which would be key to try to avoid the situation such as, happened in Kern. The bill has no registered opposition, no no votes.

Here with me is Cassie Mancini on behalf of CSCA who can address technical questions.

Thank you. Thank you so much, Senator. Is there anyone in, support of the bill? Please step forward. Give your name, organization, and position.

Madam Chair and Members, Matt Brod here on behalf of the Teamsters in support.

Yvonne Fernandez on behalf of the California Labor Federation in support.

Thank you.

Jessica Hay with AFSCME California in support.

Thank you. Are there any witnesses in opposition? Please step forward, give your name, organization, and position. Seeing none, any question from the dais? Let me just do it.

I'm sorry. I don't know what happened just now. Did you move the bill?

Move the second.

Thank you. Senator, this is a great bill. When last time I had a technical fix, it was I had some little unintended things inside of the bill. So I hope that this is just, like, straightforward when we when it goes to the other side, when it gets signed, hopefully, there's no unintended consequences in this bill. And so with that, I I ask for also to pass the bill.

And and the irony is is that this bill is trying to reverse unintended consequences. So I'm hoping that there are no unintended consequences in reversing the unintended consequences.

Thank you. Because I had one last year.

And I appreciate the support, and I respectfully ask for an Aye vote.

Thank you. Madam secretary, would you please call the roll?

Item number 2SB1038. The motion is due passed, and we refer to the committee on appropriations. [Roll Call]

Aye.

Lackey, aye. Alanis, aye. Berner Garcia, Wynn. Wynn, aye. Rodriguez.

Rodriguez, Aye. We have sufficient votes. We'll place it on hold for absent members.

Thank you very much.

Thank you, Senator. Committee member. Let's just wait up. Let's see. This might be so we're waiting.

We have one left. Item number three, Senator Durazo. We'll take vote add ons at the moment. It's really fine. Item number one. Oh, sorry. Item number one, SB 939. The current vote is five zero. Berner? Aye. Berner, aye. That bill is out. Six to zero. Item number two, SB 1038. The current vote is five zero. Berner? Aye.

Item number one. Oh, sorry. Item number one, SB 939. The current vote is five zero. Berner?

Berner, aye. That bill is out. Six to

Aye.

zero.

Item number two, SB 1038. The current vote is five zero. Berner?

Berner, aye. That bill is out. Six to zero.

Aye.

Good morning. Now you'll you'll hear item number three, SB 1227, Durazo. Good morning, Senator.

Good morning, madam chair and, members. Thank you for to the committee for, the analysis, and I accept the committee amendments. For too long, the Department of Industrial Relay Relations has faced persistent staffing shortages, vacancy rates exceeding 25%, undermining labor law enforcement, delaying inspections, and leaving workers waiting years for wage and retaliation claims to be resolved. Recent state auditor reports in '24 and '25 concern these impacts. At CalOSHA, inspections are delayed, documentation is inconsistent, and staffing shortages contribute to operational failures.

At the labor commissioner's office, tens of thousands of wage claims remain backlogged, often taking two years or more to resolve with hundreds of additional staff needed. SB 1227 is a practical solution. It requires DIR, Department of Industrial Relations, to partner with state worker unions to develop apprenticeship pathways into key enforcement roles. Apprenticeship is a proven workforce model that combines hands on training with classroom instruction, allowing workers to build skills progressively and demonstrate competency to the journey level in a merit based system.

State agencies like Cal Fire, the Department of Water Resources, and the Department of Corrections already use apprenticeship programs successfully for critical roles.

This bill bills bills on this model by requiring DIR to work through collective bargaining and joint apprenticeship committees to create these pathways while upholding both labor law requirements and the civil service merit principle. With me here today to testify in support of the bill are Norman Rogers, second vice president at United Steelworkers Local six seventy five, and Sarah McGinn, research program coordinator of SEIU Local one thousand. Mister Rogers.

Thank you for the opportunity to testify. My name is Norman Rogers. As mentioned, I'm second vice president with United Steel Workers Local in 675 in Southern California. We are an amalgamated union, mean meaning we have workers in a number of different industries.

We have we have folks at car washes. We have folks that make 55 gallon drums, cardboard boxes, and folks that work at refineries. This bill is important as mentioned with the shortages that we're seeing at OSHA. It's showing up it's showing up across the country actually because we have shortages at federal OSHA. But this provides a pathway.

It's an invaluable opportunity. I'll put it that way because we can take workers that know the industry and have an apprenticeship program so they can quickly be upskilled to take positions at OSHA. And, of course, folks coming in straight out of college with the more technical engineering degrees, that makes a nice mix at OSHA. To have workers that can come into the system that and to have knowledge of the industry is invaluable, and this would help with that. And so we strongly urge an aye vote. Thank you.

Thank you.

Thank you.

Good morning, Assemblymember McKinnor and other committee members. My name is Sarah McGinn, and I'm a research program coordinator for SEIU Local one thousand, California's largest union of state employees. For the last ten years, I've worked with state partners to develop nontraditional apprenticeships for Local one thousand workers. I'm here to speak in support of SB 1227. This bill serves to address understaffing at the Department of Industrial Relations by uniting state and union efforts, trade apprenticeships for classifications essential to labor law enforcement.

The 2024 state auditors report of Cal OSHA, a division of the department, found that persistent understaffing limited Cal OSHA's ability to ensure worker protection and enforce critical safety standards. The report also noted that in its enforcement branch and at several district offices, CalOSHA had a, 40% vacancy rate. Apprenticeship is the model mechanism to address these vacancies and increase enforcement. As the department's division of apprenticeship standards explains, apprenticeship reduces the need for expensive recruitment programs by creating a flow of candidates who are already screened and trained.

SEIU Local one thousand is an early doctor of non traditional apprenticeship.

In partnership with the state, we've launched us launched dozens of apprentice cohorts in the last decade targeting occupations in registered nursing, cybersecurity, networking, mainframe administration, client services, and auditing and accounting. These programs connect workers to stable living wage jobs on meeting the needs of state employers. SB 1227 will neighbor enable career development for state workers and also has the potential to create pipelines into the state workforce for external applicants.

Local one thousand strongly supports this legislation and is grateful to Senator Durazo for her leadership on this topic.

Thank you. Are there any witnesses in opposition? Please come forward. There's none registered. So any in support, please come to the mics to hit your name, organization, and position.

... of CASE in support. Thank you.

Catherine Vieira Houston, United Steelworkers District twelve in support.

Madam chair and members, Yvonne Fernandez on behalf of the California Labor Fed in support.

Daniel Sherrill, also with Local one thousand, in support. Thank you.

Thank you. Are there any witnesses in opposition? Please come forward and give your name, organization, and position. Seeing none, I'll bring it back to the dais. K.

The vote has been moved by assembly member Burner and the seconded by assembly member Nguyen Nguyen. Thank you. I said okay. Any any questions? No questions?

Senator D'Orazo, thank you for this bill. This committee has had informational hearings in the past, regarding vacancies throughout California government and the need to fill them so that services are provided to the public. With you with you accepting the amendments, I believe that this bill is in a step in the right direction to help address that problem, especially since DIR enforces the state's labor laws.

I have an I recommendation, recommendation, and the motion is do passed as amended to labor committee, And we do have a motion in second and truly thank you for this, for this bill because having a pathway to, get even getting a better job and fill in those positions are very important. So I thank you for that. Would you like to close?

Would you like to close?

I respectfully ask for your vote.

Thank you very much. Madam secretary, please call the roll.

Item number three, SB 1227. The motion is do passed as amended and re referred to the committee on labor and employment. California Labor We have six bill votes. That bill is out.

Lackey.

Aye.

Lackey, Aye. Alanis.

Aye.

Alanis, Aye. Burner.

Aye.

Burner, Aye. Garcia. Wynn. Aye. Wynn, Aye.

Rodriguez. Aye. Rodriguez, Aye. We have six bill votes. That bill is

Thank you. Thank you very much. This meeting is adjourned.