For nearly two years, managers earning fixed salaries at California's massive public retirement system have been making extra money at second hourly-wage jobs at the agency.
CalPERS officials say bestowing "additional appointments" on managers unable to earn overtime is a legal and "relatively common practice" in other state departments. They said they resorted to the system because they were coping with a crushing workload to launch a new computer system and it was asking too much of managers to work long hours without additional pay.
But state personnel experts contacted by The Bee say they've never heard of managers taking hourly positions in their own department. The practice, they said, may violate federal labor law.
At the very least, said former state personnel director Dave Gilb, it circumvents the state's intent to set fixed wages for salaried management jobs.
"It's giving more money to people who are not eligible for overtime," Gilb said. "It's not right."
Sacramento-based labor attorney Tim Yeung, who also worked in the state's personnel department, said he'd never heard of managers also taking hourly pay for work within their department.
CalPERS spokesman Brad Pacheco said the fund used the system to combat crushing workloads and backlogs created by glitches in its 17-month-old computer system, dubbed my|CalPERS. The practice began in June 2011 and is expected to continue at least until this July.
Fund officials say they don't believe they've broken any labor laws. Managers got a crack at the second jobs only after rank-and-file overtime options were exhausted and project managers decided to reject more expensive alternatives, such as contracting outside consultants.
"We feel it was a prudent thing to do," Pacheco said.
Still, after The Bee began asking questions about the double appointments, CalPERS human resources chief Katrina Hagen on Monday asked two high-level state personnel officials to talk over the double appointments.
As in the private sector, state government managers control their own schedules, can receive a full day's credit for a partial day worked and don't fill out a time sheet for their hours on the job.
The honor system comes with a condition: Managers must work more than 40 hours in a given week if that's what the job requires. Unlike rank-and-file employees, state managers don't receive overtime pay. Instead, they're supposed to take paid time off when their workload lightens.
"Salaried employees are able to work as many hours as necessary until the job gets done," Gilb said. "Even if the work is in other areas."
It's not clear exactly how many CalPERS managers have taken a second job with the department. CalPERS provided cost figures for one month, November 2012, saying those were the latest numbers readily available.
Pacheco referred The Bee to the California Department of Human Resources, which he said could compile more data. That department, in turn, referred The Bee to the State Controller's Office, which runs the government's payroll system.
The Controller's Office on Wednesday said it was still compiling the additional appointment pay data.
According to Pacheco, CalPERS paid $45,000 in November to a total 50 managers, an average $900 each. It paid the wages at the rank-and-file job overtime rate, time and a half. The money doesn't count toward pension calculations, the fund said.
A 27-year-old section in a rarely referenced state personnel manual allows employees to take additional appointments, but it specifically says hourly employees are eligible. It doesn't mention salaried employees.
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