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California: State Compensation Insurance Fund officials challenge mandatory furloughs as inapplicable
Employees of California's largest provider of workers' compensation insurance should not have been subject to state-ordered furloughs, according to a recent ruling.
The case involved nearly 8,000 employees of the State Compensation Insurance Fund, which has 180,000 policyholders and more than $1.6 billion in premium. In 2009, Gov. Arnold Schwarzenegger ordered nearly 200,000 state employees to take three, unpaid furlough days per month in an effort to trim spending and address a rapidly expanding budget deficit. However, SCIF employees challenged the move, arguing that the furloughs shouldn't apply to them because the insurer doesn't receive state funds and was created to be a self-supporting entity. A judge for the 1st District Court of Appeal agreed, upholding an earlier trial court ruling that the SCIF employees were entitled to back pay for the furloughed days. The court stated that California law exempts workers' comp employees from workweek furloughs, as well as hiring freezes and moves to reduce staff. Officials from the insurer anticipate that the case will be appealed to the California Supreme Court.
August 16, 2010 Copyright 2010© LRP Publications |
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