1. (a) Specifically, the payment of EPMC must be:

   1. (1) Authorized in a written labor agreement;
   2. (2) Based on earnings for normally-required duties;
   3. (3) Based on earnings for normal hours of employment;
   4. (4) Paid periodically, along with the earnings on which it is based;
   5. (5) Based on earnings that are historically consistent; and

   6. (6) Not final settlement pay.

      However, the employer may qualify its payment of EPMC, by electing a cumulative “time-in-grade exception” which shall only apply to persons newly-hired into the pertinent group or class of employment.

2. (b) To be classified as “newly-hired,” a member of the group or class must not have been previously hired or retained by the employer in any capacity whatsoever.
3. (c) To elect the time-in-grade exception, the employer's governing body must adopt an enabling resolution or ordinance in which it agrees to abide by the standards in this Section 569. The exception cannot take effect until after the resolution or ordinance has been reviewed and approved by CalPERS.
4. (d) The time-in-grade exception may be incremental, but it cannot exceed a total of five (5) years. For example, the employer may set a three-year threshold for paying fifty percent (50%), which increases by paying twenty-five percent (25%) each year, for up to two additional years of time-in-grade.

5. (e) Once a newly-hired employee has satisfied the time-in-grade exception, he or she shall be entitled to payment of EPMC on the same terms that apply to all other employees in the pertinent group or class.

   The exception from paying EPMC pursuant to this Section 569 is separate and apart from the exception from paying and reporting the value of EPMC as an item of special compensation pursuant to Section 571(a). Both of these exceptions are separate and apart from, or do they apply to, the process for converting EPMC to payrate during the period of final compensation pursuant to Section 20692 of the Government Code.

A contracting agency or school employer that pays all or a portion of normal member contributions based on compensation earnable, as Employer Paid Member Contributions (EPMC), must conform to the “group or class” requirements in Section 20691 of the Government Code and these regulations.

Note: Authority cited: Sections 20120-20124, Government Code. Reference: Section 20691, Government Code.

History

1. New section filed 9-22-99; operative 10-22-99 (Register 99, No. 39).

2. Change without regulatory effect amending Note filed 9-22-2011 pursuant to section 100, title 1, California Code of Regulations (Register 2011, No. 38).