Governor Signs Sen. Cortese’s Bills on Consumer Protection and Workers Rights

Governor Newsom signed the following bills from Senator Dave Cortese (D-San Jose) on Friday:

·      SB 411 – “The Working After Retirement Act”: SB 411 would simply grant the CalPERS Board the authority to reach a fair resolution with retirees who inadvertently go over the 960-hour limit, based on the circumstances and conditions of that particular violation, without having to force a retiree to reinstate back into the system or forcing a retiree to repay their hard-earned retirement income.

·      SB 461 – “Unfair Competition Law Enforcement”: SB 461 will allow County Counsels, of a county within which a city has a population in excess of 750,000 people, to enforce the Unfair Competition Law (UCL) that prohibits false advertising and unfair business practices.

SB 411 – The Work After Retirement Act

SB 411, sponsored by The California School Employees Association (CSEA), would simply grant the CalPERS Board the authority to reach a fair resolution with retirees who inadvertently go over the 960-hour limit, based on the circumstances and conditions of that particular violation, without having to force a retiree to reinstate back into the system or forcing a retiree to repay their hard-earned retirement income.

“Our retirees deserve respect, peace of mind, and a sense of security for their future as they continue to contribute to our state schools and public agencies, especially during a time of such socioeconomic turmoil,” says Senator Cortese. “I’d like to thank Governor Newsom for his leadership and for passing this important measure to protect our retirees.”

This measure will put an end to what, in some cases, can amount to an egregious encumbrance on retirees and, instead, allow for more swift and effective resolutions to these unintentional violations.

“On behalf of CalPERS school retirees, I would like to thank Senator Cortese for authoring Senate Bill 411 and Governor Newsom for signing this important legislation,” said California School Employees Association President Ben Valdepeña. “SB 411 will allow retired annuitants to do important work for students when their help is needed without fear of being unfairly punished and losing all of their hard-earned retirement benefits. This new law will allow CalPERS to consider the unique circumstances of each case and negotiate reasonable settlements instead of asking every retiree who exceeds the 960-hour limit to pay back every penny of their earned benefits.” 

Existing law allows a CalPERS retiree to return to work with a CalPERS employer under certain limitations. These retires are also known as a retired annuitant and they are limited to 960 hours of work a year. Some retirees do this to supplement their retirement income, while others fill in essential vacancies during an emergency to ensure adequate staffing or may temporarily staff vacant positions when needed.

Unfortunately, many of these retirees are having to pay significant costs for unintentionally going over their current limitation of 960 hours. For instance, they weren’t aware of this limitation, or their employer may have inadvertently misinformed them.

In one case, a retired annuitant was expected to repay an entire year of retirement income for exceeding the limit by 62.5 hours and earning approximately $1,200 in excess wages.

In April 2019, CalPERS completed an audit of 61 public employers that indicated that 52% of those agencies audited were in violation of the 960-hour rule and 39% did not report hours worked as required. 

SB 411 would allow the CalPERS Board to consider the circumstances of a violation and determine whether reinstatement is appropriate or if the violation was unintentional. For retirees who inadvertently violate work after retirement rules, this bill would help retain their earned benefits and dignity.

SB 461 - “Unfair Competition Law Enforcement”

SB 461 will enhance consumer protection enforcement by providing county counsels in certain large counties the authority to bring Unfair Competition Law (UCL) actions. Specifically, SB 461 provides county counsels in counties with a city having a population greater than 750,000 the same UCL authority as that their city attorney counterparts already have.

“SB 461 is a landmark consumer protection law that will allow us to better fight back against unethical and deceptive business practices across California,” says Senator Cortese.

Under SB 461, the county counsels of Los Angeles, San Diego, and Santa Clara Counties will have authority to prosecute UCL violations.

“This bill provides the state’s three largest county counsel offices—Santa Clara, Los Angeles, and San Diego—with a critical tool to protect Californians from illegal business practices,” said James R. Williams, Santa Clara County Counsel.  “Senator Cortese has long championed the groundbreaking work of the Santa Clara County Counsel’s Office to protect our community, and by authoring this bill, he has built on that legacy to enhance consumer protection and fair competition in California.”

The existing UCL statute provides a wide range of government entities enforcement authority to protect consumers and ensure fair competition. (See Business & Professions Code sections 17200- 17210.). These government entities include the Attorney General, district attorneys, city attorneys in a city and county, and city attorneys of cities with a population greater than 750,000. All of these public prosecutors have the authority to bring UCL actions based on a violation of any law or regulation.

County counsels may also bring UCL actions, but only if authorized by the local district attorney and if the action involves a violation of a county ordinance.

Given scarce prosecutorial resources to litigate consumer protection cases, the UCL provides concurrent authority to a range of government entities to bring UCL actions. However, county counsels of large-population counties, which have the resources and experience to bring these often complex, multi-year cases, do not have the same independent authority to bring UCL actions as their large-population city attorney counterparts.

SB 461 will address this gap by giving county counsels of counties with cities having a population greater than 750,000 the authority to bring UCL actions, consistent with the statute's purpose and structure.