Automatic Enrollment Implementation
Is automatic enrollment permissible under law?
No, unless it is collectively bargained.
Explanation:
California does not permit wage deductions without the employee’s authorization except when empowered by state or federal law, or when authorized by a collective bargaining agreement.
*NOTE – The City of Los Angeles has successfully negotiated a collective bargaining agreement to allow automatic enrollment for its employees.
Relevant State Laws – Cal. Lab. Code § 224
“The provisions of Sections 221, 222 and 223 shall in no way make it unlawful for an employer to withhold or divert any portion of an employee’s wages when the employer is required or empowered so to do by state or federal law or when a deduction is expressly authorized in writing by the employee to cover insurance premiums, hospital or medical dues, or other deductions not amounting to a rebate or deduction from the standard wage arrived at by collective bargaining or pursuant to wage agreement or statute, or when a deduction to cover health and welfare or pension plan contributions is expressly authorized by a collective bargaining or wage agreement.”
A bill was proposed in 2017/2018 session of the state legislature (S.B. 571) that would allow wage deductions for auto-enrollment and auto-escalation for public employees if such deduction was collectively bargained in accordance with applicable laws. The bill permits an employer that implements auto-enrollment for collectively bargained employees to also do so for “related non-represented” employees.
S.B. 571, 2017-2018 Reg. Sess. (Ca. 2017).