The Controller shall provide for the administration of payroll deductions as set forth in Sections 1151, 1151.5, and 1152, salary reductions pursuant to Section 12420.2, and may establish, by rule or regulation, procedures for that purpose.

In administering these programs the Controller shall:

(a) Make, cancel, or change a deduction or reduction at the request of the person or organization authorized to receive the deduction or reduction. All requests shall be made on forms approved by the Controller.

(b) Obtain a certification from any state agency, employee organization, or business entity requesting a deduction or reduction that they have and will maintain an authorization, signed by the individual from whose salary or wages the deduction or reduction is to be made. An employee organization that certifies that it has and will maintain individual employee authorizations shall not be required to provide a copy of an individual authorization to the Controller unless a dispute arises about the existence or terms of the authorization.

(c) Provide for an agreement from individuals, organizations, and business entities receiving services to relieve the state, its officers and employees, of any liability that may result from making, canceling, or changing requested deductions or reductions. However, no financial institution receiving a payroll service pursuant to this section shall be required to reimburse the state for any error in the payroll service received by that financial institution after 90 days from the month in which the payroll service was deducted from an individual’s paycheck.

(d) Determine the cost of performing the requested service and collect that cost from the organization, entity, or individual requesting or authorizing the service. Services requested which are incidental, but not necessary, to making the deduction may be performed at the Controller’s discretion with any additional cost to be paid by the requester. At least 30 days prior to implementation of any adjustment of employee costs pursuant to Section 12420.2, the Controller shall notify in writing any affected employee organization.

(e) Prior to making a deduction for an employee organization or a bona fide association, determine that the organization or association has been recognized, certified, or registered by the appropriate authority.

(f) Decline to make a deduction for any individual, organization, or entity if the Controller determines that it is not administratively feasible or practical to make the deduction or if the Controller determines that the individual, organization, or entity requesting or receiving the deduction has failed to comply with any statute, rule, regulation, or procedure for the administration of deductions.

(g) After receiving notification from an employee organization that it possesses a written authorization for deduction, commence the first deduction in the next pay period after the Controller receives the notification. The employee organization shall indemnify the Controller for any claims made by the employee for deductions made in reliance on that notification.

(h) Make, cancel, or change a deduction or reduction not later than the month subsequent to the month in which the request is received, except that a deduction for an employee organization may be revoked only pursuant to the terms of the employee’s written authorization. Employee requests to cancel or change deductions for employee organizations shall be directed to the employee organization, rather than to the Controller. The employee organization shall be responsible for processing these requests. The Controller shall rely on information provided by the employee organization regarding whether deductions for an employee organization were properly canceled or changed, and the employee organization shall indemnify the Controller for any claims made by the employee for deductions made in reliance on that information. Except as provided in subdivision (c), all cancellations or changes shall be effective when made by the Controller.

(i) At the request of a state agency, transfer employee deduction authorization for a state-sponsored benefit program from one provider to another if the benefit and the employee contribution remain substantially the same. Notice of the transfer shall be given by the Controller to all affected employees.

(Amended by Stats. 2018, Ch. 53, Sec. 7. (SB 866) Effective June 27, 2018.)