SR Holguin, PC is a union-side labor and employment law firm with nearly four decades of experience representing private sector unions, public sector unions, and multi-employer trust funds. SR Holguin, PC is committed to providing full-service legal representation to each of our clients.

One way in which SR Holguin, PC ensures our clients and their members stay informed is by keeping you updated on recent developments relating to workers’ rights. Today’s updates come following the release of the December 8, 2020 Los Angeles County Board of Supervisors meeting agenda and supplemental agenda. There are three items in particular that could impact you.

1. Workers Who Could be Impacted: Los Angeles County Development Authority Employees

Agenda Item 3-D: “California Public Employees Retirement System Employers’ Pension Prefunding Trust Agreement”

The Acting Executive Director of the Los Angeles County Development Authority (LACDA) sent a Letter to the Board dated December 8, 2020 entitled “Approve Agreement to Establish IRS Section 115 Trust with the California Public Employees Retirement System and Approve the Transfer of Funds to the Trust.”

The Letter provided in part “[t]he LACDA is taking steps to better manage the short-term costs and long-term liabilities associated with pensions. The purpose of this action is to enter into an agreement with [California Public Employees Retirement System (CalPERS)] to fund the IRS Section 115 Trust through the [CalPERS Employers’ Pension Prefunding Trust (CEPPT)], an irrevocable trust administered by CalPERS. Through the agreement between CalPERS and the LACDA, the LACDA will transfer LACDA funds to the Trust to hold, invest, and distribute assets to pay future pension costs for eligible LACDA employees. Currently, the LACDA funds its [Unfunded Accrued Liability (UAL)] by setting aside funds designated to pay future pension costs. These funds are subject to the LACDA’s investment policy, which is subject to the California Government Code, generally yielding lower investment earnings, as compared to the investment choices available through other options. There is the alternative of sending the funds directly to CalPERS, but doing so relinquishes the LACDA’s investment control and oversight to CalPERS. Under Section 115 of the Internal Revenue Code, a public agency or municipality can create a separate trust to pre-fund its CalPERS UAL. The Trust is a vehicle for segregating agency funds from general assets for the purpose of funding pension liabilities. The Trust maintains the LACDA’s control and desired level of risk over the assets in trust, as Federal and State law allows the agency to invest in a greater array of security options to maximize returns in long-term investments.”

Therefore, the “letter requests that your Board authorize the Los Angeles County Development Authority (LACDA) to enter into an agreement with the California Public Employees Retirement System (CalPERS) to participate in the CalPERS Employers’ Pension Prefunding Trust (CEPPT) program and authorize funding of $3.8 million, from funds previously set aside to pre-fund the unfunded accrued liability.”

Now, agenda item 3-D of the Los Angeles County Board of Supervisors meeting recommends that the Board ‘approve and instruct the Chair to sign an Agreement and Election to Prefund Employer Contributions to a Defined Benefit Pension Plan with the California Public Employees Retirement System (CalPERS) for the Los Angeles County Development Authority to establish an IRS Section 115 Trust, an irrevocable pension trust, and participate in the CalPERS California Employers’ Pension Prefunding Trust fund program; approve and instruct the Chair to sign the Delegation of Authority to Request Disbursements to transfer funds to prefund the IRS Section 115 Trust; authorize the Acting Executive Director of the Los Angeles County Development Authority to execute any related documents as may be necessary to fund the trust; authorize the initial transfer of $3,800,000 to the trust from funds previously set aside to prefund the Unfunded Accrued Liability; and authorize the Acting Executive Director to make any future contributions at his discretion, based on funding availability, through the annual budget process.”

2. Workers Who Could be Impacted: Restaurant Workers Throughout Los Angeles County

Agenda Item 3: “Support for the Restaurant Workforce and Vulnerable Communities”

A Motion will be introduced by Incoming Chair Hilda Solis (1st District) and Supervisor Sheila Kuehl (3rd District). The Motion provides in part “recently announced restrictions on dining establishments are of great concern to Los Angeles County given that restaurants are the backbone of our economy. Although COVID-19 cases are increasing and safeguards are necessary, it is incumbent on government to provide support to those industries and their employees severely impacted.” World’s Central Kitchen’s Restaurants for the People program “aims to keep the devastated restaurant industry afloat by getting restaurant and food workers re-hired and able to provide for their families, and by reinvigorating our agricultural communities hit hard by shuttering restaurants. Besides getting critically needed meals to those experiencing food insecurity, the program resonates widely throughout the economy, including continued employment for restaurant industry workers, support for the farms and producers that serve the restaurants, the shipping and distribution companies that transport the food, as well as bolstering a fast-depleting tax base to help keep the County’s economy as strong as possible during the crisis… Los Angeles County has the opportunity to not only reinvigorate the County’s restaurant and agricultural industries but also to get thousands of its workers rehired and once again providing for their families –thereby substantially reducing local government COVID-19 mitigation costs, and helping to ensure as quick an economic recovery as possible.”

Therefore, the Motion calls for “the Board of Supervisors [to] direct the Chief Executive Office to explore the availability up to $10 million of any unspent or future CARES Act funding or any other available funds to enter into a sole source contract with World Central Kitchen that would fund restaurants across Los Angeles County to provide meals to vulnerable communities, including those who are under health orders to self-quarantine and who lack the financial resources and ability to prepare their own meals.”

3. Workers Who Could be Impacted: “Essential Workers” Employed by LA County

Supplemental Agenda Item 62-C. “Preserving COVID-19 Testing Capacity for Los Angeles County Residents and Providing COVID-19 Testing for County Essential Workers”

A Motion will be introduced by Incoming Chair Hilda Solis (1st District). The Motion provides in part “[o]n July 17, 2020, the California Department of Managed Health Care (DMHC) issued an emergency regulation requiring that health plans provide coverage for COVID-19 testing for both symptomatic and asymptomatic ‘essential workers.’ Essential workers include County employees who continue to be on the frontlines inspecting workplace outbreaks, seeing patients in our clinics, serving residents experiencing homelessness, providing meals at food distributions, and more. Currently, County essential workers are able to access testing through their County-sponsored health plans, but despite increasing their capacity, the health plans have struggled to consistently provide these services within the required 48-hour DMHC timeframe. This has resulted in County-employed essential workers accessing County testing resources intended to serve residents…

Employers, including the County of Los Angeles, have a responsibility to ensure access to COVID-19 testing for their employees who are essential workers. The overwhelming majority of the County’s workforce are essential workers…all of whom need access to testing to protect themselves and the public they serve. Yet, it is important that the County fulfill this occupational obligation as an employer in a separate manner – one that does not detract from its more general role in servicing the public health needs of all County residents, particularly the most vulnerable. With the current record surge in COVID-19 cases, there is an urgent need for the County as an employer of essential workers to respond. Efforts to relieve our community testing sites while safeguarding the health of essential workers are critical. There is an opportunity to enter into an agreement to retain experienced contracted staff to operate COVID-19 testing centers specifically for County-employed essential workers. This comes about through a partnership with the four County-sponsored health plans. Working with the plans, the County facilitated “in-network” status for these testing centers and negotiated one all-inclusive cost to be paid by all County-sponsored plans. The agreement will be at no cost to the County – and, instead, will afford an opportunity for the County to save funding by reducing use of County-sponsored COVID-19 community testing sites by County-employed essential workers. Such actions will preserve funding for testing capacity at the community testing sites for residents, while ensuring that County-employed essential workers have access to readily accessible and expeditious testing necessary to continue to safely provide critical County services.”

Therefore, the Motion calls for the Board of Supervisors to: 

“1. Instruct Director of Personnel, to establish a no-cost contract with Fulgent Diagnostics, LLC (Fulgent) to operate COVID-19 testing centers designated by the County for self-administered test centers. The contract must provide for: A. Establishing a County-specific website to allow County employees to certify as essential workers, make an appointment at one of the testing centers, and provide insurance information from a County-sponsored health plan for billing purposes, as well as an administrative portal for County use. B. Operating testing centers at County designated facilities. C. Staffing each center with at least two (2) qualified staff to support testing, including distribution of test kits, answering essential worker questions, accepting specimens and conveying them to the contractor’s labs for testing each evening. D. Filing claims for reimbursement, not to exceed the negotiated price of $100 per test for all testing, diagnostic and follow-up services, with each essential worker’s County-sponsored health plan within 30 days of the test result. E. A dashboard for the County that will show the percentage of County- employed essential workers that test positive, for County departments to remove and isolate such essential workers from County service until safe to return to work.

2. Authorize Director of Personnel, or designee, to amend the Fulgent contract to (i)adapt to developments in COVID-19 testing and prevention during the COVID-19 pandemic, for operational efficiencies and clarifications, and update the personnel administering the agreement, and (ii) make other changes pursuant to the authority granted in the contract to the Board of Supervisors, including exercising term extension options and adding or updating County required provisions, with all such modifications resulting in no changes to the current negotiated insurance reimbursement under the agreement.

3. Delegate authority to the Director of Personnel to amend, if necessary, additional substantially similar contracts with other qualified vendors for operation of self- administered test centers, with 10-day prior notification to the Board.

4. Instruct Director of Personnel, in collaboration with all departments, to develop and execute a strategic communication plan to inform County-employed essential workers of their ability to receive a COVID-19 test, to be paid for by their health plan, even if they are asymptomatic or have not had a documented contact with a confirmed case.

5. Instruct Director of Personnel, in collaboration with the Director of the Department of Health Services and the Director of Public Health, to create a toolkit for employers pursuing testing access for their employees. 6. Instruct Director of Personnel to report back to the Board on all these matters in 15 days.”

We hope these updates are helpful to you.


SR Holguin, PC