Like some state workers in Gov. Jerry Brown's administration, all employees at the State Compensation Insurance Fund could eventually lose their free vehicles.
The quasi-public fund cut its vehicle fleet from 1,920 cars in December to just 982 cars at the end of June. Fund spokeswoman Gina Simons said the fleet would be cut to 150 vehicles by the end of this year.
Those remaining cars are part of a lease from Toyota through 2015, Simons said, and it will be allowed to expire.
"We are making sure our employees have the proper tools to do their jobs by managing transportation more effectively with a clearer line of sight that will enable us to more efficiently manage expenses," she said in a statement.
The fund had no estimates on how much it would save by cutting the fleet.
Fund officials began reviewing its vehicle policy last spring, shortly after the IRS launched an audit of vehicle use reporting practices by state employees at some state agencies. IRS rules require company cars to be listed as taxable income unless they are predominantly used for work.
Officials then announced it would cut the fund's fleet in half, leaving vehicles only in the hands of people who absolutely needed them for regular work travel. Eventually, they decided to get rid of the fleet altogether. Employees who used the cars, which were insured by the fund, also were furnished cards that could be used only to pay for gas and fund-approved car maintenance.
A group of nearly 400 attorneys belonging to the California Attorneys, Administrative Law Judges and Hearing Officers in State Employment union sued to keep their cars. Many of them say the fund officials promised them company vehicles as a benefit in exchange for taking low wages. However, the perk was never directly written into their contract, according to CASE attorney Patrick Whalen.
But worried about losing their cars, having to accept furloughs and make other concessions, the union added a new clause into their latest deal with the state that says CASE members at the fund "shall not be subjected to furloughs, Personal Leave Program and/or any other form(s) of compensation or benefit reductions while still working." The union is arguing that the vehicles count as compensation.
Whalen said many employees would not have bought homes far away from their job sites had they known they would have to pay for their own cars, insurance, maintenance and gas.
A judge decided last month that CASE must file a grievance before seeking a court remedy. The grievance process is expected to lead to an arbitration hearing in the early fall. The court document posted below has more details.