(a) All state employees employed on June 30, 1961, in carrying out functions transferred to the Trustees of California State University by this chapter, except persons employed by the Director of Education in the Division of State Colleges and Teacher Education of the State Department of Education, are transferred to the California State University.

(b) Nonacademic employees transferred under this section shall retain their respective positions in the state service, together with the personnel benefits accumulated by them at the time of transfer, and shall retain the rights attached under the law to the positions that they held at the time of transfer. All nonacademic positions filled by the trustees on and after July 1, 1961, shall be by appointment made in accordance with Chapter 5 (commencing with Section 89500) of Part 55, and persons so appointed shall be subject to Chapter 5.

(c) (1) The trustees shall provide, or cooperate in providing, academic and administrative employees transferred by this section with personnel rights and benefits at least equal to those accumulated by them as employees of the state colleges, except that any administrative employee may be reassigned to an academic or other position commensurate with his or her qualifications at the salary fixed for that position. An administrative employee so reassigned shall have a right to appeal from that reassignment, but only as to whether the position to which he or she is reassigned is commensurate with his or her qualifications. All academic and administrative positions filled by the trustees on and after July 1, 1961, shall be filled by appointment made solely at the discretion of the trustees.

(2) The trustees shall establish and adjust the salaries and classifications of all academic, nonacademic, and administrative positions and neither Section 19825 of the Government Code nor any other provision of law requiring approval by a state officer or agency for salaries or classifications shall be applicable thereto. In establishing and adjusting salaries, consideration shall be given to the maintenance of the state university in a competitive position in the recruitment and retention of qualified personnel in relation to other educational institutions, private industry, or public jurisdictions that are employing personnel with similar duties and responsibilities.

(3) The establishment and adjustment of salaries for nonacademic employees shall be in accordance with the standards prescribed in Section 19826 of the Government Code. The trustees, however, shall make no adjustments that require expenditures in excess of existing appropriations available for the payment of salaries. Chapter 5 (commencing with Section 89500) of Part 52, relating to appeals from dismissal, demotion, or suspension, shall be applicable to academic employees.

(d) Persons excluded from the transfer made by this section shall retain all the rights and privileges conferred upon civil service employees by law. Personnel of state agencies employed in state university work other than those transferred by this section, and who are employed by the trustees prior to July 1, 1962, shall be provided with personnel rights and benefits at least equal to those accumulated by them as employees of those state agencies.

(e) If the provisions of this section are in conflict with the provisions of a memorandum of understanding reached pursuant to Chapter 12 (commencing with Section 3560) of Division 4 of Title 1 of the Government Code, the memorandum of understanding shall be controlling without further legislative action, except that, if the provisions of a memorandum of understanding require the expenditure of funds, the provisions shall not become effective unless approved by the Legislature in the annual Budget Act.

(Amended by Stats. 2006, Ch. 538, Sec. 132. Effective January 1, 2007.)