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
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          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
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            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