REPORT TO COUNCIL
SUBJECT
Title
Adopt a Resolution Authorizing Elective California State Disability Insurance (SDI) Coverage for Pay Plan Category G Unrepresented Classified Confidential Employees under California Unemployment Insurance Code Section 710.5
Report
BACKGROUND
The City’s approach to compensation and benefits for Unrepresented Classified Confidential employees (Pay Plan Category G) has historically emphasized parity with employees in Pay Plan Category B, represented by the Sunnyvale Employees’ Association/IFPTE Local 21 (SEA/IFPTE). Category G employees are not organized and do not negotiate for any changes to their wages, hours, and/or other terms and conditions of employment. It is codified in the City’s Salary Resolution Article 1.000 that Category G employees receive the same treatment for wages, benefits, and leaves as Category B employees, with limited exceptions as outlined in specific sections of the Salary Resolution.
The action outlined in this Report to Council is to address the elective enrollment of Category G employees in the California State Disability Insurance (SDI) program. While the recently approved Memorandum of Understanding with SEA/IFPTE Local 21 in RTC 26-0605 on June 23, 2026 provides the legal basis for SDI participation for SEA/IFPTE represented employees, state law requires a Council-adopted resolution to extend elective SDI coverage to unrepresented confidential employees. This action is necessary to ensure compliance with California Unemployment Insurance Code requirements and to maintain benefit parity between Category B and Category G employees.
EXISTING POLICY
Council Policy 7.3.1 Legislative Management - Goals and Policies, Goal 7.3D: Maintain a quality work force, consistent with state and federal laws, City Charter, and adopted policies in order to assure that City services are provided in an effective, efficient, and high-quality manner.
Council Adopted Strategic Goals (July 2025 to June 2027): A responsive, transparent and efficient City government.
Salary Resolution Article 1.000 - Pay Plan Category G applies to unrepresented Classified Confidential employees. [Note: For purposes of wage increases/decreases, benefits and leaves, Category G employees receive the same treatment as Category B employees, except as provided in Section 3.910, Section 4.000, Section 4.100, and Section 4.300].
California Unemployment Insurance Code (CUIC) Section 709 - Any local public entity located in this state specified in paragraph (3) of subdivision (a) of Section 135 or Indian tribe specified in paragraph (6) of subdivision (a) of Section 135 may elect to become an employer subject to Part 2 (commencing with Section 2601) of this division with respect to all its employees, including those with civil service or tenure positions, and may file its written election with the director. That election may be made on its own motion by the appropriate governing board of the local public entity or Indian tribe making the election, or may be made by the governing board pursuant to a petition signed by a majority of the employees (including those with civil service or tenure positions) requesting the governing board to file an election with the director.
California Unemployment Insurance Code (CUIC) Section 710.5 - Notwithstanding Section 709, any public agency, as defined in Section 3501 of the Government Code, may elect to become an employer subject to Part 2 (commencing with Section 2601) with respect to all employees who are a part of an appropriate unit established pursuant to Chapter 10 (commencing with Section 3500) of Division 4 of Title 1 of the Government Code, provided the election is the result of a negotiated agreement between the public agency and the recognized employee organization, as those terms are defined in Section 3501 of the Government Code. The public agency employer also may elect to provide coverage to its management and confidential employees and to its employees who are not a part of an appropriate unit, but the election shall not be contingent upon coverage of other employees of the public agency employer.
ENVIRONMENTAL REVIEW
The action being considered does not constitute a “project” with the meaning of the California Environmental Quality Act (“CEQA”) pursuant to CEQA Guidelines section 15378(b)(4) in that is a fiscal activity that does not involve any commitment to any specific project which may result in a potential significant impact on the environment.
DISCUSSION
Legal and Regulatory Framework
The elective enrollment of Pay Plan Category G Unrepresented Classified Confidential employees in the California State Disability Insurance (SDI) program is governed by the California Unemployment Insurance Code (CUIC), specifically Sections 709 and 710.5. These sections establish the authority and procedural requirements for public agencies to extend SDI coverage to employee groups not represented by a recognized bargaining unit. Under CUIC Section 710.5, the City Council, as the governing body, may elect to provide SDI coverage to management and confidential employees by formal resolution, independent of any negotiated agreement with an employee organization. The City shall adopt a resolution explicitly authorizing elective SDI coverage for the unrepresented group of employees.
Equity and Workforce Impacts
Proceeding with a resolution authorizing elective SDI coverage for Category G employees will align their benefits with those of SEA/IFPTE represented employees, support internal equity, and ensure compliance with CUIC requirements. This action is consistent with the City’s established practice of extending negotiated benefit changes to Category G employees.
Providing SDI coverage to Category G employees ensures that they have access to the same income protection benefits as their SEA/IFPTE represented counterparts during qualifying medical or family leave events. This approach supports workforce morale, recruitment, and retention by demonstrating the City’s dedication to fair and consistent benefit administration.
Adopting the proposed resolution is a necessary step to ensure that Pay Plan Category G Unrepresented Classified Confidential employees receive equitable disability insurance benefits in accordance with state law and City policy.
FISCAL IMPACT
The implementation of elective SDI coverage for Pay Plan Category G Unrepresented Classified Confidential employees will not result in a direct fiscal impact to the City’s operating budget, as the SDI program is funded through employee payroll deductions in accordance with CUIC requirements.
PUBLIC CONTACT
Public contact was made by posting the Council meeting agenda on the City's official-notice bulletin board at City Hall, at the Sunnyvale Public Library and in the Department of Public Safety Lobby. In addition, the agenda and this report are available at the City Hall reception desk located on the first floor of City Hall at 456 W. Olive Avenue (during normal business hours), and on the City's website.
RECOMMENDATION
Recommendation
Adopt a Resolution Authorizing Elective California State Disability Insurance (SDI) Coverage for Pay Plan Category G Unrepresented Classified Confidential Employees under California Unemployment Insurance Code Section 710.5.
Levine Act
LEVINE ACT
The Levine Act (Gov. Code Section 84308) prohibits city officials from participating in certain decisions regarding licenses, permits, and other entitlements for use if the official has received a campaign contribution of more than $500 from a party, participant, or agent of a party or participant in the previous 12 months. The Levine Act is intended to prevent financial influence on decisions that affect specific, identifiable persons or participants. For more information see the Fair Political Practices Commission website: www.fppc.ca.gov/learn/pay-to-play-limits-and-prohibitions.html
An “X” in the checklist below indicates that the action being considered falls under a Levine Act category or exemption:
SUBJECT TO THE LEVINE ACT
___ Land development entitlements
___ Other permit, license, or entitlement for use
___ Contract or franchise
EXEMPT FROM THE LEVINE ACT
___ Competitively bid contract*
_X_ Labor or personal employment contract
___ Contract under $50,000 or non-fiscal
___ Contract between public agencies
___ General policy and legislative actions
* "Competitively bid" means a contract that must be awarded to the lowest responsive and responsible bidder.
Staff
Prepared by: Vienne Choi, Principal Human Resources Analyst
Reviewed by: Heather Ruiz, Director, Human Resources
Reviewed by: Sarah Johnson-Rios, Assistant City Manager
Approved by: Tim Kirby, City Manager
ATTACHMENTS
1. Resolution