1302 - Exempt Lump Sum Payments

Category

Exempt Employees

Audience List

• Administrative Chiefs
• Agency Secretaries
• Personnel Officers
• Personnel Transactions Supervisors

Synopsis

This policy:

• Defines a statutory officer exempt from civil service.
• Provides information on how the rate of pay for lump sum payment is determined.
• Explains the lump sum approval process.

Introduction

The State of California’s Constitution provides members of boards and commissions, appointees of the Governor, and one appointee of each Governor's appointee shall be exempt from civil service. These employees are referred to as “exempt appointees.”

Certain exempt employees who earn an annual salary set in statute under Government Code section 11550 et.seq. are considered statutory employees or officers. The annual salary is compensation in full for all services rendered during an appointee’s tenure under Government Code section 18000. Therefore, statutory exempt employees do not accrue or use leave, including sick leave, vacation, and annual leave (unless authorized under Government Code section 19849.16 and California Code of Regulations, title 2, section 599.752.1).

Statement

An individual with prior state service, exempt or civil service, who is appointed to a position earning a statutory salary, may elect to receive a full or partial lump sum payment for accrued vacation or annual leave prior to being appointed to or during the appointment to the statutory position. Lump sum payments for any accrued leave credits are not eligible to transfer to Savings Plus unless an individual has a bona fide separation from employment (S05 transactions are not considered a bona fide separation). If the appointee chooses not to receive a lump sum payment at that time, the amount of leave is “banked” and is available if the individual returns to a position where leave is accrued and used or if the individual leaves state service.

When a statutory officer elects to receive a lump sum payment, the rate of pay must be at the salary rate of their former position where leave was earned and adjusted for general salary increases that would have been received as though the individual had remained in the former position. The last department in which the leave was earned is responsible for the payment although there is no prohibition on the current department making the payment if it chooses to do so.

If the former position where leave was earned was a civil service classification, the individual is reinstated to the former position allowing a lump sum payment at the current rate of pay of the former position. If the former position where leave was earned was an exempt, the individual would be reinstated to the former exempt position, however, since the salary range may change over time, the department must receive approval from the Governor’s Office (GO) and CalHR before being reinstated to the exempt position.

In some cases, a statutory officer who “banked” their leave credits may later request a partial lump sum payment during their statutory appointment, before leaving state service. The lump sum payment must be made based on the salary of the position in which leave was last earned.

Application

To obtain approval for the rate of pay to issue a lump sum payment, departments must submit a request to EPR@calhr.ca.gov. The request must include a justification with the following information:

• Exempt employee’s name and last four of their social security number.
• Class code and title of the position where vacation or annual leave was last earned.
• Date the employee vacated the position where leave was last earned.
• Salary rate received at that time the employee vacated the position.
• Calculation of what the present-day salary would be with general salary increases.

CalHR will verify the salary information and provide an approval memorandum to the department. If the approved salary is not within the current exempt salary rate, the department must consult with the GO.

Authorities

• Article VII, section 4 of the California Constitution
• California Code of Regulations, title 2, section 599.752.1
• Government Code section 18000
• Government Code section 19849.16
• Government Code sections 11550 to 11564

Resources

Authorized By

Melissa Russell
Chief
Personnel Management Division

Contact Person

Exempt Program
Personnel Program Consultant , Personnel Management Division
Phone: 916-909-3710
Fax: 916-327-1886
Email: EPR@calhr.ca.gov

Superseded Policies

History

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