PERB Affirms that School Employers Must Follow Statutory Nonnegotiable Procedures to Recoup Erroneous Salary Overpayments to Employees

July 2012
Number 40

In a recent decision, the Public Employment Relations Board (PERB) ruled that school districts and bargaining unit representatives cannot collectively bargain procedures to recoup wage overpayments if those procedures contradict state wage garnishment laws, and further held that the issue of recouping salary overpayments is a non-mandatory subject of bargaining under the Educational Employment Relations Act (EERA).

In Berkeley Council of Classified Employees v. Berkeley Unified School District (2012) PERB Decision No. 2268-E (BCCE), PERB concluded that the school district violated the EERA by declaring an impasse over negotiations on the renewal of an overpayment recoupment provision in an expired collective bargaining agreement. Specifically, the expiring provision allowed the district to recoup erroneous salary overpayments by withholding the amount of overpayment from the employee’s wages over the same period of time in which the payroll error occurred. Under the negotiated process, the recoupment occurred without any individual employee consent. The classified employee union (BCCE) unit representative refused to negotiate, claiming that the prior provision was a non-mandatory subject of bargaining that improperly waived the statutory rights of unit members.

The administrative law judge ruled in favor of BCCE at hearing, and the district sought review before PERB. In a split decision, PERB held that the state’s wage garnishment and attachment statutes prohibit a process, negotiated on behalf of a group of employees and without individual employee consent, for recouping wage overpayments by offsetting past overpayments with current and future wages. PERB relied upon the case ofCalifornia State Employees’ Association v. State of California (1988)198 Cal.App.3d 374 (CSEA), in which the court held that the wage garnishment laws prohibit an employer from unilaterally recouping wage overpayments without employee consent, a court order, or other due process.

In BCCE, PERB applied the CSEA decision and held that the wage garnishment laws establish an “inflexible standard” requiring individual employee consent that cannot be altered through collective bargaining. The BCCE decision therefore clarifies that bargaining unit representatives cannot be forced to negotiate alternative procedures for recouping employee overpayments and, even if it is mutually agreeable, the parties cannot agree to a process that contradicts the state wage garnishment laws. In BCCE, PERB distinguished the negotiation of wage deductions for insurance premium increases, which is allowed. Citing Social Services Union v. Board of Supervisors (1990) 222 Cal.App.3d 279, PERB referenced section 224 of the Labor Code which expressly permits a collective bargaining agreement to provide for the deduction of wages to cover health and welfare contributions.

This is a notable PERB decision which may affect existing provisions in collective bargaining agreements. We recommend that you review your current agreements and consult with legal counsel if you believe changes are required as a result of this decision. If you have any questions, please feel free to contact one of our eight offices located statewide. You can also visit our website or follow Lozano Smith on Facebook.

Written By

Darren C. Kameya
Senior Counsel and Labor & Employment Practice Group Co-Chair
Los Angeles Office

Jordy Hur
Law Clerk
Sacramento Office

©2012 Lozano Smith

As the information contained herein is necessarily general, its application to a particular set of facts and circumstances may vary. For this reason, this News Brief does not constitute legal advice. We recommend that you consult with your counsel prior to acting on the information contained herein.