CalPERS has decided to immediately suspend a program that allowed some salaried managers to moonlight in-house and take hourly pay, saying that the controversy surrounding the practice has become a "significant distraction" to its work.
In a statement the fund issued minutes ago, the state's largest public employee pension fund says is ending the so-called "additional appointments" immediately, despite its assertion the practice saved an estimated $1.6 million since June 2011.
The statement doesn't include how many employees participated in the program or what it cost CalPERS in payroll. Earlier this week the fund said it paid 50 managers an average $900 each in November to work in hourly positions.
Assembly Speaker John A. Pérez said Thursday that the dual-job news was "disturbing" and he promised a committee would look into it. The State Controller's Office has been sorting through payroll data to get a statewide fix on the issue, but as of this afternoon it still hadn't come up with those figures. Several departments contacted by The Bee have yet to answer questions about whether they used additional appointments, although CalPERS has suggested that the practice is common.
"It is now obvious that there are various interpretations of the use of Additional Appointments across all state departments," the CalPERS statement says. "Most importantly, we recognize that the media has sensationalized this practice and it has now become a significant distraction for policy makers and our own employees from the important business of serving California."
CalPERS released the information this afternoon after The Bee reported earlier this week about its managers earning fixed salaries while also taking secondary rank-and-file positions. CalPERS said it resorted to the practice nearly two years ago when its new computer system launch and subsequent glitches created daunting workloads against the pressure of unyielding deadlines.
CalPERS officials said the program was legal and above board, but personnel experts interviewed by The Bee raised concerns that the program could be illegal and, at the very least, circumvents the state's intent to set fixed salaries for managers.
"In my humble opinion, it risks violating federal labor law," said Dave Gilb, a former state personnel director, by blurring the line between who is a salaried employee and who isn't. And, he said, the program was unnecessary because the state has a bonus system that pays up to $1,200 per month for managers who have to work extreme overtime.
In today's statement, CalPERS said it planned to end the additional appointment program in June, but will suspend it now while it gets advice from two agencies that deal with employee matters, the State Personnel Board and the California Department of Human Resources.