(a)

(1) Discretionary deductions of the employee, including those for coverage under a state health benefits plan in which the employee is enrolled, shall be deducted from the disability benefits or Family Care Leave benefits under this

article unless canceled by the employee. If an employee deduction under a state health benefits plan is continued, the state employer contribution shall also continue.

(2) An employee shall not receive service credit under the Public Employees’ Retirement System or the State Teachers’ Retirement System during the period of receipt of disability benefits under this

article and contributions to the Public Employees’ Retirement System or the State Teachers’ Retirement System shall not be deducted. State employer contributions shall also not be made to either system during such period.

(3) An employee shall not accrue sick leave or vacation credit or service credit for any other purpose during the period of receipt of disability benefits under this article, except, when provided by a rule or regulation adopted by the department, an employee receiving those benefits pursuant to

Section 19879.1 may accrue these credits to the extent that annual leave or sick leave credits are used to supplement those benefits. (

b) If the provisions of this

section are in conflict with the provisions of a memorandum of understanding reached pursuant to

Section 3517.5, the memorandum of understanding shall be controlling without further legislative action, except that if such 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.