Former Department of Personnel Administration Dave Gilb had the law on his side when he stopped a plan to give a $250 award to each of State Compensation Insurance Fund's 7,900 employees, the department told The State Worker today.

DPA spokeswoman Lynelle Jolley's sent this e-mail today after we called seeking the administration's comment on State Fund President Jan Frank's announcement that the fund wouldn't go through with the award.

From: Lynelle Jolley
Sent: Friday, October 23, 2009 12:03 PM
To: Ortiz, Jon - Sacramento
Subject: FW: SCIF bonuses

Jon, here's an email DPA's then-director Dave Gilb sent the SCIF president in July saying the proposed "Encore Awards" appear to conflict with the law governing awards for state employees. SCIF management never responded to his email or provided any explanation of the legal authority they relied on to support going forward with the award. Unfortunately, the law simply doesn't authorize a department to recognize each of its employees with a monetary award.

From: Dave Gilb
Sent: Thursday, July 16, 2009 5:07 PM
To: 'JDFrank@scif.com'
Cc: Andreas Acker Debbie Endsley
Subject: FW: SCIF bonuses

Hello Jan:

My staff has informed me after discussions with yours that SCIF intends to hand out a $250 bonus to all employees in the Department under what has been characterized as an "Encore Award" program. SCIF apparently relies on Government Code 19823 as authority for these bonuses.

SCIF has no authority under GC 19823 to issue bonuses to every employee in the department. That code is DPA's statutory authority which authorizes DPA- not individual state agencies - to establish a merit award program. We have established the sustained superior accomplishment program under this statutory authority which, among other criteria, limits awards to a maximum of one award per 100 individuals. There is no legal authority for SCIF to use DPA's statutory authority to issue bonuses of $250 to every person in the Department.

I have looked at your handbook and I do not see where your handbook allows for such blanket awards either, and certainly not under DPA's statutes. If there is any additional authority that SCIF believes exists to issue bonuses to everyone, please let me know.

As we reported earlier today, State Fund President and CEO Jan Frank has told the fund's employees that they'll not be receiving the extra $250 she had promised to them in July because the Department of Personnel Administration had "objected strenously" to her plan.

"Over the past several months we have tried very hard to resolve this issue with DPA, but it is clear that if State Fund proceeds with a monetary award then we could be subject to a legal challenge including an action to seek reimbursement from individual employees," Frank told fund staff.