What will happen if my pay drops to federal minimum wage and my check no longer covers my service credit payment amount?
In the event that you begin receiving minimum wage as a result of the state budget impasse and you have a service credit purchase installment payment plan, the monthly payroll deductions are expected to continue. Both pre-tax and after-tax payroll deductions will be deducted after all mandatory deductions (taxes, health insurance, etc.) have been taken. However, if your earnings after all mandatory deductions are less than your service credit payment amount, the State Controller’s Office will stop the payroll deductions until your earnings are restored to the pre-minimum wage amount. During the period when no payments are received, interest will continue to accrue on the unpaid balance. If the payroll deductions do not resume once the earnings are restored, please contact us at 888 CalPERS (or 888-225-7377).
