The California Department of Consumer Affairs last week told 23 of its oldest employees - including one who is 81 - they must retire by the end of the year, having for years overlooked a state law requiring them to retire when they turned 65.

Jon Villalva, left, and Daniel Fong change numbers on a budget clock in the Capitol as the state breaks a record Friday by going 79 days beyond the start of the fiscal year without lawmakers approving a budget. Talks to close the $19 billion deficit resume Monday. (Hector Amezcua / [email protected])

Hundreds more employees statewide might have been affected. On Friday, Gov. Arnold Schwarzenegger called the order off.

The governor's Cabinet secretary, Scott Reid, scolded State and Consumer Services Agency Secretary Bill Leonard in a letter Friday afternoon, saying, "While I recognize this state law has been in place for some time, it has not been uniformly enforced and is simply discriminatory on its face."

The consumer affairs employees are business inspectors and other civilian workers reclassified by the Legislature as safety employees in 2004, officials said. The designation entitled the employees to more lucrative retirement benefits but also imposed mandatory retirement at age 65.

"Apparently this had not come to anyone's attention until recently," department spokesman Russ Heimerich said before Friday's reversal.

If the agency was surprised to come across the law, some employees were downright startled by it.

"I said, 'What the heck is this?'" said Tony Wilson, who is 71 and investigates complaints against automobile repair shops.

Wilson said that in 2004, when his position was reclassified, mandatory retirement was not mentioned.

"It never came up," he said. "I wasn't planning on doing 20 years, obviously, but I was planning on doing a couple of more."

Various safety retirement categories have been broadened gradually over the years to include not only police officers and firefighters, but also civilians such as milk and billboard inspectors.

Statewide, about 985 safety employees are 65 or older and might have been affected by the law, according to a June 2009 count, the most recent available, said Lynelle Jolley, a spokeswoman for the Department of Personnel Administration.

Law enforcement officers such as California Highway Patrol officers remain subject to mandatory retirement at age 60, despite Friday's order, Jolley said. Federal law allows mandatory retirement ages for law enforcement officers and firefighters, she said.

Kasey Clark, chief counsel for the California Statewide Law Enforcement Association, said the mandatory retirement age in California predates World War II.

"I think it's just one of those circumstances where agencies have not been mindful of all their many statutory obligations," he said before Friday's decision reversing the retirement order.

He could not immediately be reached afterward.

The majority of the 23 consumer affairs employees at issue are within the Bureau of Automotive Repair, Heimerich said. He declined to identify the employees, but said they range in age from 65 to 81.

Reid said in his letter to Leonard that an employee's turning 65 has no bearing on his or her ability to work.

"If, after an exhaustive research, it is determined by the Department of Personnel Administration that a statutory repeal is necessary in order to ensure continued employment of our valued employees, the Legislature must be given an opportunity to make that change," he wrote.

The Department of Consumer Affairs, which regulates various businesses and professions, told the affected employees in letters last week they must retire by Dec. 31.

The letters came shortly after Schwarzenegger told agency secretaries and department directors from throughout the administration to stop hiring unless necessary. The governor has sought to reduce payroll expenses as the state faces a $19 billion budget deficit.

Heimerich said the agency's discovery of the mandatory retirement age law was not in response to Schwarzenegger's meeting with high-ranking officials.

"It was a manager that was doing a routine review of some labor matters who discovered this," Heimerich said.

In a letter to employees last week, Brian Stiger, acting director of the Department of Consumer Affairs, said, "The Department sincerely values your skills, knowledge and commitment to DCA; however, the Department is obligated to implement this law."

The department had scheduled a meeting for Tuesday with employees it intended to retire. Once the administration decided it would not enforce the law, Heimerich said officials started calling employees to tell them the meeting is off.

Wilson, who lives in Occidental, in Sonoma County, and had yet to receive the call, said, "It sounds like some common sense has settled in up there in Sac."