The California Public Employees’ Retirement System (“CalPERS”) has answered several outstanding questions concerning how paid leave hours taken under the Families First Coronavirus Response Act (“FFCRA”) should be tracked and reported. On April 16, 2020, CalPERS issued Circular Letter No. 200-021-20 which explains how to report compensation and track hours for employees taking leave under the Emergency Paid Sick Leave (“EPSL”) and the Emergency Family and Medical Leave (“EFML”) provisions of the FFCRA.
Reporting Hours for the Purposes of Enrollment in CalPERS Membership
The Circular Letter provides that all hours in paid status under the FFCRA will be reported to CalPERS for the purposes of determining eligibility in membership. For most part-time hourly employees whose hours must be tracked, the paid leaves will count towards the 1,000-hour per fiscal year threshold for enrollment in membership.
Based on this guidance, agencies need to be aware that if they retain employees on paid FFCRA leave beyond the 1,000-hour threshold, they will become eligible for CalPERS membership, unless excluded by statute or under the agency’s CalPERS contract. Once enrolled, the employees must be enrolled in all subsequent fiscal years, regardless of the number of hours worked.
Reporting Hours and Compensation for Retired Annuitants and Permissible Benefits
Under the Public Employees’ Retirement Law (“PERL”) and the Public Employees’ Pension Reform Act (“PEPRA”), retired annuitants may not receive any benefit in addition to their hourly rate. However, the definitions for eligible employees under the FFCRA likely includes most retired annuitants.
The Circular Letter provides that retired annuitants may receive paid leave under the FFCRA without violating the post-retirement work restrictions provided under the PERL and PEPRA. Retired annuitants will not be subject to reinstatement for receiving payments under the FFCRA.
The hours of paid leave a retired annuitant receives under the FFCRA must be reported to CalPERS as hours worked for the purposes of the 960-hour per fiscal year limit. Under Executive Order N-25-20, any hours worked by a retired annuitant to ensure adequate staffing during the state of emergency do not count toward the 960-hour per fiscal year limit. The modification of the 960-hour threshold was discussed in a previous LCW post. However, the paid leave hours are included in the 960-hour per fiscal year limitation for all retired annuitants.
Reporting Compensation for Employees Taking Paid Leave Under the FFCRA
The Circular Letter provides that all paid hours of paid sick leave under the FFCRA are reportable as compensation earnable for classic members or pensionable compensation for new members. CalPERS has also informally indicated that paid leave under the EFML is reportable as well. Generally, the paid leave should be reported in the same manner as other paid leaves. If an employee supplements any FFCRA leave with other accrued leaves so that they are receiving full pay, reporting of compensation will not differ from any other situation where an employee takes paid leave.
The full-time payrate should not be modified, but earnings may be less than the full-regular payrate where the employee is receiving less than their regular compensation due to the FFCRA daily caps ($511 for EPSL and $200 for EFML), and the pay is not supplemented with other leaves.
CalPERS has not provided official guidance on how to report compensation when the payment under the FFCRA is less than the employee’s regular compensation because of the FFCRA caps and the FFCRA pay is not supplemented with other leaves. Nonetheless, we anticipate that in those circumstances, CalPERS is likely to accept reporting of all of the earnings as payrate (up to the employee’s regular payrate) before reporting any of the pay as special compensation. Reporting earnings this way will have a lesser impact on the service credit earned during the leave period. In any event, all compensation reported must be reportable under CalPERS’ regulations. We will provide an update if we receive any additional information from CalPERS on how to report earnings.
We will keep you informed as CalPERS’ guidance evolves.