The State Worker

Chronicling civil-service life for California state workers

July 15, 2009
State Fund lawsuit: What's the compensation plan?

Here's yet another wrinkle to the State Compensation Insurance Fund legal decision that found furloughing its 500 legal staff broke the law: How do you compensate everyone for their furlough hours?

The answer matters big time because the resolution will set a precedent should other lawsuits eventually reverse the state's furlough policy.

Because state workers could self-schedule their furlough days from March through June, there are case-by-case differences in how many hours people took off work, although their pay has been reduced at the same rate. That creates an equity problem when you're talking about reimbursing money and time.

Consider this example of two employees who exemplify the extremes:

Let's say that Employee A and Employee B both took the two Fridays in February off work and without pay.

Then Employee A self-scheduled two furlough days off in March, April, May and June for 10 days total and a commensurate pay reduction of 80 hours (assuming a conventional schedule).

Meanwhile, Employee B from March through June deferred all the days off and worked, thinking she would lump them together for a long stretch off. Total time off: two days. Total pay reduction, because the state deducted the pay each month anyway, 80 hours.

Here's the thing: A and B lost the same amount of pay, but B also lost the leave time.

Clearly, both are owed money -- Judge Peter Busch said so -- but how do you fairly compensate B?

Now think about this: There will be workers in between our two extreme examples, folks who took off some of the days and worked through others.

Click the link below for the rest of this post.

State Fund's solution will probably set a precedent. The fund faces a second lawsuit from SEIU Local 1000 that would, if successful, free another 5,000 or so employees from furlough and put the fund on the hook for their back pay.

And if at some point Gov. Arnold Schwarzenegger loses the furlough battle entirely, the question of back compensation will encompass well over 200,000 state workers.

We asked Pat Whalen, the winning attorney representing California Attorneys, Administrative Law Judges and Hearing Officers in State Employment in the case, whether the compensation details have been spelled out.

"Unfortunately no answers to these questions yet," Whalen said in an e-mail. "I would refer you to the controller, but I suspect they will tell you the same thing they told me -- they handle the money, and will reimburse the deductions in pay -- but they don't handle leave credits and other timekeeping issues."

We called the controller's office and they're checking. We'll update this post with what they tell us.

State Fund spokeswoman Jennifer Vargen said that the employees affected by the ruling will get their pay back and that they're no longer being furloughed. But what about the apparent inequities setting up between folks who took time off and those who didn't?

"We're working with the union and DPA to resolve that," Vargen said.

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About The State Worker

Jon Ortiz The Author

Jon Ortiz launched The State Worker blog and a companion column in 2008 to cover state government from the perspective of California government employees. Every day he filters the news through a single question: "What does this mean for state workers?" Join Ortiz for updates and debate on state pay, benefits, pensions, contracts and jobs. Contact him at (916) 321-1043 and at


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