Return-to-work kerfuffle is giving CalPERS a case of COVID-19 blues

CalPERS has come down with the COVID-19 back-to-the-office blues, affecting some employees' morale at a time when pension fund officials are struggling to hire and retain workers.

Since March 1, most CalPERS employees have been required to work at the office three days a week to ensure smooth operations and collaboration, allowing employees with medical or other reasons to apply for a reasonable accommodation so they can continue working virtually full time. More recently, CalPERS changed its policy to reduce the number of employees sent home when there is a COVID-19 outbreak in the office after state health department workplace guidance changed in May.

However, since March 1, COVID-19 cases in Sacramento County have spiked and employees and a union representative have spoken at CalPERS board meetings asking that pension fund officials to revise the back-to-the-office policies.

The $441.9 billion California Public Employees' Retirement System, Sacramento, is not alone in wrestling with issues on what its back-to-the-office policies should look like. But the push-pull between employees and plan executives also comes at a critical time: CalPERS is looking to fill 10 spots on its 400-plus investment team who have left since March and when employee engagement is critical amid volatile markets that challenged fund returns for the latest fiscal year.

Employees and a union representative have come before the board at its last two meetings to complain about CalPERS' back-to-the-office and COVID-19 outbreak rules. SEIU Local 1000, which represents 1,300 CalPERS employees, in May delivered a petition asking CalPERS to strengthen its policy addressing when workers are to be sent home during significant outbreaks. The petition, signed by 539 CalPERS employees, was sent to CEO Marcie Frost and board President Theresa Taylor.

The union also held two Joint Labor Management Committee meetings.

In June, the union sent the results of a return-to-the-office survey of CalPERS employees that it conducted. The 435 respondents gave CalPERS an overall safety rating of 2.98, with 5 being safest. The survey also showed that of 62 employees indicating they had requested a reasonable accommodation, 30 were denied.

"I believe that CalPERS is doing their best to follow the state guidelines from CDPH (California Department of Health), and is attempting to go above and beyond when there is an outbreak," said Ms. Taylor, who also is president of the SEIU Local 1000, District Labor Council 786 representing state Franchise Tax Board employees.

However, she added that the board does not play a role in management and unionized employees' disputes. "That is out of our purview."

A spokesman for the nation's largest public pension plan said CalPERS' struggle with the best way to create a hybrid work environment during a pandemic isn't unique.

"We're dealing with the same thing every other state agency is dealing with," said spokesman Joe DeAnda. "There is nothing unique about our situation — or the investment office's situation compared to the rest of the organization."

Michelle Tucker, human resources director, and Dallas Stone, chief of CalPERS operations support services division, attended the union meetings and negotiations between union members and management are ongoing regarding the option to remote work, Mr. DeAnda said.

In a July 15 statement on its website, SEIU Local 1000 said that since workers returned to the office in March — two years after a work-from-home order, CalPERS management has taken insufficient steps to protect their health and safety.

"Since then, management has not broadly communicated workplace exposures and infections, placing employees — and their family and friends — at risk of illness," according to the statement.

A 22-year investment office employee speaking on July 12 told the board that the morale is at the lowest he had seen. He said that when he was notified in late June of outbreaks, he asked for and was denied a request to work from home. Two days later he said contracted COVID-19 as did his youngest daughter who had a high fever. He told the board that he took a straw poll of the investment office and there was almost no one who wasn't looking for work.

Mr. DeAnda said that the individual's comments about morale and staff departures are "conjecture," since CalPERS open position/departure rates are no different than in normal times. What’s more, only 10 investment office team members have left since CalPERS instituted its hybrid work policy in March, he said.

The controversy comes as CalPERS is in the process of filling vacancies. As of July 26, CalPERS was advertising seven investment jobs, including a private assets deputy CIO, a managing investment director for board governance and sustainability, an investment director to lead credit research and strategy, and an investment manager for its opportunistic portfolio.

At the off-site board meeting, Hoang-Van Nguyen, president of the SEIU Local 1000 district labor council that includes CalPERS employees, told the board that the investment office had been in COVID-19 outbreak status since June 29.

The third floor, which houses a portion of CalPERS' roughly 400-person investment team, remained in outbreak status until July 21, Mr. DeAnda said. Since March, CalPERS has had 254 positive COVID-19 cases, including 134 work-related positive cases, he said.

Ms. Nguyen also said that between CalPERS' June and July board meetings, the executive team has changed its return-to-the-office rules, narrowing the number of employees who are sent home when there is an outbreak.

In June, Ms. Nguyen had delivered a petition signed by 500 CalPERS employees requesting, among other things, that when there are multiple outbreaks in multiple departments that staff be sent home for their "health and safety." Also, even though Sacramento County was placed in high COVID-19 status starting June 2, CalPERS did not have a mandate requiring workers to wear a mask in the office, she said.

"Since June we've had a severe decline in our working conditions," Ms. Nguyen said at the July 12 board meeting. Instead of sending employees home when there is a COVID-19 outbreak in the office, they are instructed to go to the office but wear a mask, she said.

Rob Feckner, board vice president who is serving his sixth term as the elected representative of school members on CalPERS' board, said at the June meeting that he was "very supportive of the labor management and negotiation process" and suggested Ms. Nguyen speak with Ms. Frost and follow union conflict resolution procedures.

Looking at other state agencies, "in my opinion CalPERS exceeds what other people are doing already. Not that we can't always be in a position to do better, but CalPERS is being responsible in my opinion," Mr. Feckner said.

But he bristled at the suggestion that CalPERS institute a mask mandate for employees working in the office. "I think if that was to be pushed forward we would see another petition coming forward from members who did not want to wear a mask because that is a controversial subject," Mr. Feckner said.

Mr. DeAnda declined to discuss the new return-to-work policy on who gets sent home during an outbreak because the team is "still working through some of the communication and implementation" of its policy. Most CalPERS employees work at the office three days per week and remotely the remaining two days, he said.

The state revised its emergency workplace guidelines on May 6 to give employers more leeway over procedures when there is a COVID-19 outbreak at work, eliminating detailed requirements to exclude employees from the office after coming into close contact with someone who has COVID-19 — with California Department of Health guidelines defining "close contact" as being within six feet of a COVID case for a cumulative total of 15 minutes or greater in a 24-hour period or overlapping with the "high risk exposure period." People who have had such close contact but are asymptomatic must test within three to five days of the contact and wear a mask around others for 10 days after exposure.