Capitol Alert

Government error gave 20,000 state workers too much money

California State Controller Betty Yee
California State Controller Betty Yee Courtesy State Controller’s Office

Approximately 20,000 state employees got too much money in their paychecks last month. Now the government wants it back.

The goof led a union locked in tough contract talks with Gov. Jerry Brown to criticize the administration – even though State Controller Betty Yee’s office, which processes state pay, is not under the governor’s control.

The payroll errors ranged from $37 to $101 per employee and showed up in checks and direct deposits issued in January for the December pay period, Controller’s Office spokesman John Hill said.

The mistake was limited to 12,689 employees in the California Correctional Peace Officers Association and “about 7,000” others in the International Union of Operating Engineers Bargaining Unit 12, Hill said.

The Controller’s Office was still figuring out the exact numbers as of Friday, but the erroneous payments represent about 5 percent of all the paychecks and direct deposits the state issues in a month.

Hill said the overpayments to state workers occurred due to a “human error” that charged the state more than its share for the cost of employees’ medical benefits and undercharged employees for their share. The individual amounts varied, depending on each employee’s health plan and whether dependents were also covered.

“We had a high volume of health plan changes this year,” Hill said, further complicating an already-complex task of updating some 17,000 data fields used to calculate the benefit rates.

Unit 12, which represents 10,000 state craft and maintenance workers, issued a statement on its website that characterized the mistake as an affront on top of contentious contract talks that have dragged on for months. The union’s agreement expired last summer, and it has met nearly 30 times with Brown’s labor negotiators.

“We understand that you will bear the burden of their mistake. You, the employee, will feel the impact, not the State,” the union’s website states. “To add further insult, the State’s position in bargaining has not changed.”

Although the Controller’s Office has nothing to do with contract negotiations, Unit 12 Executive Director Tim Neep said the payroll error and labor talks with Brown are connected.

If the union had a new contract, the state’s share of cost for members’ health benefits would have increased when rates went up at the beginning of this year. Without a contract, his members had to pick up the difference when premiums rose. And now they have to give money back.

“It’s a fiasco,” Neep said.

CCPOA members are in the same position. A call to the correctional officers’ union was not immediately returned Friday.

Hill said that the state’s outdated payroll computer system – built in the 1970s – did not factor into the overpayments. The data would have required manual entry regardless of the technology processing the numbers, he said.

As to repayment, each employee’s departments will send notice of what’s owed and how to repay the money through payroll deduction, direct payment or by deducting leave credits.

Meanwhile, Hill said, “We’re looking at ways to mitigate this in the future.”

Related stories from Sacramento Bee