BILL ANALYSIS AB 381 Page 1 Date of Hearing: April 1, 2009 ASSEMBLY COMMITTEE ON INSURANCE Joe Coto, Chair AB 381 (Block) - As Introduced: February 23, 2009 SUBJECT : SUBJECT : State Disability Insurance Benefits SUMMARY : Allows community college districts to elect to provide state disability insurance (SDI) coverage to permanent or temporary academic employees under specified conditions. Specifically, this bill : 1)Allows a community college district to elect to provide SDI coverage to all eligible permanent or temporary academic employees, with the exception of employees covered under a community college district bargaining unit, who are part of a labor organization, if the election is the result of a negotiated agreement between the employer and the recognized employee organization. 2)Defines "academic employee" as a person employed by a community college district in an academic position. EXISTING LAW : 1)Requires private sector employers to provide SDI coverage for their employees, while public agencies (the state, cities, counties, school districts, community college districts, and other local districts) are not required to provide SDI coverage for employees. 2)Specifies that public agencies that elect to provide SDI coverage must do so under statutory rules including: a) All of the eligible employees who are part of a labor organization are parties to an election that is the result of a negotiated agreement between the employer and the recognized employee organization. b) All of the eligible employees in one or more places of business who are not part of a labor organization are parties to an election requested by a written petition signed by a majority of the eligible employees. AB 381 Page 2 3)Specifies that SDI coverage provides a partial wage replacement for up to 52 weeks in the event that a person experiences a non-occupational injury or illness that prevents that person from working. It is paid entirely by wage deductions upon employee earnings. 4)Allows public entities, except school districts and community college districts, to elect to cover all of their employees who are part of an appropriate unit, provided the election is the result of a negotiated agreement between the public agency and the recognized employee organization. FISCAL EFFECT : Undetermined. COMMENTS : 1)Purpose of bill. According to the Author, the purpose of this bill is to provide part-time community college faculty within a wall-to-wall bargaining unit the separate ability to elect, as a group, to participate in the State Disability Insurance (SDI) Program. 2)State Disability Insurance (SDI) Program. Private sector employers are required to provide for SDI coverage for employees. SDI coverage provides a partial wage replacement for up to 52 weeks in the event that a person experiences a non-occupational injury or illness that prevents that person from working. The SDI benefits are paid entirely by contributions from employees. The benefits range from $50 to $959 per week, depending upon earnings during a 12-month base period. The SDI taxable wage limit is $90,669 per employee for 2009 and the withholding tax on employees is 1.1% of wages earned. Public entities including the state, cities, counties, school districts, and other local districts may elect to cover their employees with SDI coverage. Paid Family Leave is part of the SDI Program and it allows paid time off of work in order to care for a sick family member or to bond with a newborn child. 3)Reason for bill. According to the Author and the bill's sponsor, the Faculty Association of California Community Colleges, the current law limits the ability of discreet classifications of employees within a bargaining unit to elect into the SDI Program. For community college faculty, this AB 381 Page 3 means that temporary and full-time faculty must both participate. The Faculty Association states that tenured faculty may feel that they do not need the SDI Plan since they use few sick days per year and may have access to a sick-leave donation bank. This bill would allow part-time faculty to participate in SDI independent of the full-time faculty. Also, this bill would allow full-time faculty to participate in SDI independent of the part-time faculty. 4)Proposed technical amendment. The Author is proposing to make a technical correction to the bill in which the proposed provisions of this bill will amend Section 710.5, instead of Section 702.6, of the Unemployment Insurance Code. The Committee Chair recommends that this reference correction be made. REGISTERED SUPPORT / OPPOSITION : Support California Federation of Teachers Faculty Association of California Community Colleges Opposition None received. Analysis Prepared by : Manny Hernandez / INS. / (916) 319-2086