(1) The board shall establish a compensation plan for all employees of the department. (2) The employees of the department shall be employed and governed in accordance with the board's merit system. The board shall provide for the recruitment, examination, app ointment, promotion, transfer, lay -off, removal, discipline, compensation, and welfare of the department's employees by establishing a system of personnel administration based on merit principles. The systems shall include a personnel board of at least five (5) members appointed by the board for two (2) year terms. The personnel board shall establish rules and regulations governing the administration of the personnel system. The district director of health shall function as the appointing authority for pers onnel matters of the board. The board shall have one (1) year from the implementation of KRS 212.780 to 212.794 to provide for a merit system. (3) Notwithstanding the provisions of KRS 61.510 to 61.692 and 78.510 to 78.852 all regular full -time, present an d future public health employees of an independent district department of health shall be included within the provisions of the Kentucky Retirement System. (4) When a personnel board is organized as provided in this section, all health department employees shall be transferred to and continued in the service of the department created under KRS 212.782. Any health department employee who is in classified service at the time of the establishment of a personnel system shall be continued in the classified servi ce of the newly created department with the same status held in the district department of health.
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