BILL ANALYSIS
Senate Committee on Labor and Industrial Relations
Mark DeSaulnier, Chair
Date of Hearing: June 23, 2010 2009-2010 Regular
Session
Consultant: Alma Perez Fiscal:Yes
Urgency: No
Bill No: AB 2058
Author: Block
Version: As amended June 21, 2010
SUBJECT
Unemployment insurance: retraining benefits
KEY ISSUES
Should the Legislature require that an unemployed individual who
is receiving Unemployment Insurance (UI) benefits be
automatically eligible to receive California Training Benefits
while in full-time training?
Should an unemployed individual receiving UI benefits through a
federal extension be allowed to continue receiving benefits if
he/she is enrolled in a community college or other accredited
postsecondary education program?
Should the Legislature require that the Employment Development
Department prepare a report evaluating the effectiveness of the
California Training Benefits Program?
PURPOSE
To modify current eligibility requirements necessary for an
unemployed individual to be approved to participate in the
California Training Benefits program.
ANALYSIS
Existing law provides for the payment of unemployment
compensation benefits through the Unemployment Insurance (UI)
program, administered by the Employment Development Department
(EDD). The UI program is a federal-state program that provides
weekly unemployment insurance payments to eligible workers who
lose their jobs through no fault of their own.
Existing law authorizes an unemployed individual who files a
claim for unemployment compensation benefits or extended
duration benefits, to apply to the EDD for a determination of
potential eligibility for benefits during a period of training
or retraining through the California Training Benefit (CTB)
program. The CTB program allows eligible UI claimants to receive
their UI benefits while attending a training or retraining
program approved by EDD. Claimants attending an approved
training course are not required to look for work, be available
for work or accept work while in training. EDD is required to
inform, either verbally or in written form, all UI claimants of
the retraining benefits.
Under the required application process , the EDD schedules a
phone interview with the applicant to determine his/her
eligibility for CTB after the training has begun. The EDD is
prohibited from pre-determining CTB eligibility until the
individual has started to attend school or training.
Existing law requires EDD to issue a determination of potential
eligibility for retraining benefits to an unemployed individual
if the EDD Director finds that the training is authorized by the
following government programs:
Workforce Investment Act (WIA);
Employment Training Panel (ETP);
Trade Adjustment Assistance (TAA); or
California Work Opportunity and Responsibility to Kids
(CalWORKs)
Existing law also allows the approval of other training
programs, not authorized by one of the above, that are
determined by EDD to be eligible. Among other things, the
training must be:
Full-time and must be completed in one year from the
beginning date of CTB approval, even if the UI benefits
expire before the conclusion of the training.
Hearing Date: June 23, 2010 AB 2058
Consultant: Alma Perez Page 2
Senate Committee on Labor and Industrial Relations
Related to an occupation or skill for which there are,
or are expected to be, reasonable employment opportunities
in the labor market area in this state.
If the person is a journey level union member, the
training course of instruction must be job-related and
necessary due to changes in technology, or necessary to
retain employment or to become more competitive in
obtaining employment.
Existing law provides that a UI benefits recipient, who applies
for retraining benefits no later than the 16th week of receiving
UI benefits, and is determined eligible for the retraining
benefits shall be entitled to a training extension on his or her
UI claim to complete the approved training. Benefits paid under
a training extension are charged to the employer reserve
accounts.
This Bill would modify the requirement for participation in the
state's retraining benefits program in order to allow unemployed
individuals to receive Unemployment Insurance (UI) benefits
while enrolled in a training program on a full-time basis.
Specifically, this bill:
1. Establishes the California Training Benefits (CTB)
Program in code and declares the policy of this state to
assist individuals with UI benefits if these individuals
need training or retraining to upgrade their skills in
demand occupations to become competitive in the labor
market.
2. Provides that UI benefits shall not be denied to an
otherwise qualified unemployed individual because he or she
is participating in eligible training or retraining.
3. Would revise current eligibility requirements to specify
that an unemployed individual, who qualifies for UI
benefits (and subsequent state or federal extensions) and
applies for the CTB program, shall be deemed to be
automatically eligible for the program during a period of
training or retraining.
Hearing Date: June 23, 2010 AB 2058
Consultant: Alma Perez Page 3
Senate Committee on Labor and Industrial Relations
4. Requires that a determination of automatic eligibility
for benefits be issued to an unemployed individual if the
director of EDD finds that:
a. The training is authorized by the federal
Workforce Investment Act (WIA), the state Employment
Training Panel (ETP), the federal Trade Adjustment
Assistance (TAA) as amended, or the California Work
Opportunity and Responsibility to Kids (CalWORKs).
b. The individual is a participant in training
with a provider that is certified and on the state's
Eligible Training Provider List (ETPL).
c. The individual is a journey level union
member in industry-related training necessary to
employment.
5. Provides that if training is not automatically
authorized under the above provisions, the director of EDD
shall issue a determination of potential eligibility for
benefits if the director finds that specified criteria
apply that includes, among others:
a. That the director approved training be
completed within a reasonable period of time (current
law requires that it be completed within one year).
b. If an unemployed individual is eligible for
training benefits and when federal extended UI
benefits are in effect, the individual can receive
benefits if he/she is enrolled in a community college
or other accredited postsecondary education program
with the purpose of preparing the applicant in
academic or job skills that will increase employment
opportunities or that leads to an industry-recognized
credential or certificate designed for a specific
occupation.
6. Allows EDD to inform all UI claimants of the
availability of training benefits online (in addition to
current laws requirement that it be provided verbally or in
written form) and requires that this information be made
available on the EDD's Web site in close proximity to
Hearing Date: June 23, 2010 AB 2058
Consultant: Alma Perez Page 4
Senate Committee on Labor and Industrial Relations
information on UI claim forms.
7. Deletes the requirement that the unemployed individual
submit written certification of participation in approved
training with each claim, and instead allows EDD to
prescribe the required certification through regulations.
8. Requires that EDD, not later than September 1, 2016,
prepare and submit to the Governor and the Legislature a
report evaluating the effectiveness of the California
Training Benefits Program, as specified.
COMMENTS
1. Need for this bill?
According to EDD, 19,868 individuals were approved to
participate in the CTB program in calendar year 2009. Also
during 2009, the number of individuals receiving UI benefits
each month ranged from 947,753 (January 2009) to a high of
over 1.4 million (December 2009).
California's unemployment rate is currently at 12.6% and there
are over 1.4 million individuals collecting unemployment
insurance benefits. Based on this data, EDD estimates that in
any given month the number of individuals receiving UI
benefits and who are approved to participate in the CTB
program ranges from 1.4 percent to 2.0 percent of the total
number of individuals receiving UI benefits.
Concerns have been raised regarding the delays in the current
application and determination process that EDD follows when
approving an unemployed individual for CTB benefits. EDD is
prohibited from pre-determining CTB eligibility until the
individual has started to attend school or training, and thus,
if an individual enrolls in a training program that may hinder
that person's availability to work, EDD suspends their UI
benefits until a telephone interview takes place to confirm
eligibility.
With this bill, the author seeks to allow unemployed workers
receiving UI benefits to automatically continue coverage
Hearing Date: June 23, 2010 AB 2058
Consultant: Alma Perez Page 5
Senate Committee on Labor and Industrial Relations
through the CTB program while enrolled in an approved training
program. This bill would also allow unemployed workers to
receive benefits while they are enrolled in community college
or other accredited postsecondary education program as long as
they are receiving benefits through a federal UI extension.
2. Guidance from the U.S. Department of Labor :
This bill affects "retraining benefits" (as phrased in
Sections 1266 to 1274.10 of the Unemployment Insurance Code),
or the "California Training Benefits Program," as called by
EDD on its printed materials and its website. The retraining
benefits program allows people receiving UI benefits to
participate in approved training programs without actively
seeking work. EDD is responsible for determining whether UI
recipients are eligible for retraining benefits and may
continue to receive UI compensation.
In May 2009, the U.S. Department of Labor issued a guidance
letter to state agencies that administer the UI Program.
Specifically, Training and Employment Guidance Letter No.
21-08 encourages states to widen the types of training and the
conditions under which education and training are considered
"approved training" for purposes of the state's UI law.
States are also asked to reconsider their laws and
regulations, and applicable administrative requirements, to
determine if their approved training requirements are
appropriate to the current economy. That guidance letter
strongly encourages states to broaden their definition of
approved training for UI beneficiaries during economic
downturns.
Currently, until a determination of eligibility for retraining
benefits is complete, EDD will suspend the UI benefits. As a
result, many Californians decide to drop out of the job
training to preserve their eligibility for UI benefits. This
is contrary to the direction of the federal Department of
Labor which has been strongly encouraging states to streamline
their administrative procedures and laws, if necessary, to
assist unemployed people to regain competitive job skills for
the current economy.
Hearing Date: June 23, 2010 AB 2058
Consultant: Alma Perez Page 6
Senate Committee on Labor and Industrial Relations
3. EDD's CTB Streamline Approval Project :
EDD has been working to develop a process that will streamline
and expedite the approval process for the CTB program once UI
claimants have actually begun training. EDD's CTB streamline
solution seeks to eliminate the need for UI claimants
attending training to wait for a telephone interview to
receive approval for CTB because eligibility can be determined
as soon as EDD receives training verification from the program
authorizing training or the training provider. The solution
will allow for the agencies to submit via fax the training
information necessary to confirm enrollment in an authorized
training program. For the authorizing programs and training
providers, the streamline solution will also reduce
disruptions by eliminating the need for EDD staff to call
these entities to gather and verify the training information
necessary for CTB approvals.
The CTB Streamline solution is planned for release in two
phases. The first phase will focus on claimants whose
training is authorized under certain federal or State programs
under California UI law, including training under the
Workforce Investment Act (WIA), the Federal Trade Adjustment
Assistance (TAA), the State Employment Training Panel (ETP),
and the State California Work Opportunity and Responsibility
to Kids (CalWORKs). Phase II will include all other UI
claimants attending full-time school or training outside of
the designated federal and State programs and whose CTB
eligibility is dependent on meeting additional specific
criteria required by UI law for CTB approval.
In March 2010, EDD began implementation of Phase I by
streamlining the approval process for claimants whose training
is authorized under the WIA. EDD is next working towards
implement the streamline approval project for TAA, ETP and
CalWORKSs authorized trainings.
4. Proponent Arguments :
Hearing Date: June 23, 2010 AB 2058
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Senate Committee on Labor and Industrial Relations
According to proponents, California is facing a job loss
crisis with unemployment at historic highs of 12.6% in May
2010, and to make matters worse, job seekers are spending
longer periods of time looking for work. Over 34% of the
unemployed have been looking for work for over 6 months, up
170.5% since 2008. The author believes that today's
unpredictable economic climate demands that we have a
modernized system capable of providing unemployed Californians
with the training they need to once again contribute to our
economy. In addition, proponents argue that we must break
down barriers preventing laid-off workers from participating
in training and skill development that makes them competitive
for jobs as our economy recovers.
Proponents believe that this bill will make it easier for
unemployed Californians to access unemployment benefits while
enrolled in training programs to upgrade job skills. This
bill will also revise the Unemployment Insurance Code to
conform to federal guidance. Proponents believe that
automatically approving UI recipients for training programs
will allow the unemployed to register and attend training
without fear of an interruption or possible loss of their
benefits. In addition, proponents argue that automatic
enrollment into pre-approved training programs will streamline
the approval process and save EDD significant resources and
staff time. Overall, proponents argue that helping the
unemployed access retraining will greatly benefit our local
state economy, and will lure more companies to do business in
our state and hire skilled and educated California workers.
5. Opponent Arguments :
According to opponents, although they support benefits being
paid timely to individuals enrolled in training with a
connection to employment upon completion, they are opposed to
this bill because it would expand and increase the payment of
training and/or retraining UI benefits. Opponents argue that
already current law allows unemployed workers receiving UI
benefits to continue their coverage while enrolled in
specified training or retraining as approved by the Director
of EDD. They feel that by establishing a general broad
Hearing Date: June 23, 2010 AB 2058
Consultant: Alma Perez Page 8
Senate Committee on Labor and Industrial Relations
threshold, this bill could open the door to not only fraud and
abuse, but also establishes a very different public policy.
Opponents contend that in its October "Unemployment Insurance
Fund Forecast," EDD projected that the state's UI Fund balance
would have a deficit of $7.4 billion at the end of 2009. They
believe that it is inappropriate to expand the payment of UI
benefits a time when the UI Fund is depleted and California is
compelled to borrow from the Federal Government in order to
pay UI benefits. Opponents argue that this is not the time to
incur still higher UI costs by expanding available training
benefits.
Furthermore, opponents argue that this bill allows individuals
that are unemployed to take this opportunity to use their
unemployment benefits to make lifestyle changes beyond those
required for re-employment, regardless of real employment
opportunities. Opponents believe that job training benefits
should be targeted to the needs of the job market and the
individual, not unilaterally provided without qualification
and without specific nexus to employment.
6. Related Legislation :
SB 968 (Negrete McLeod) of 2010: Currently in Assembly
Insurance Committee
SB 968 is similar to this bill; however, SB 968 does not deem
an unemployed individual automatically eligible for training
benefits. SB 968 would delete the provision of existing law
that requires the determination of potential eligibility and
instead, specifies that an unemployed person who is able to
work is eligible to receive training and retraining benefits
if he/she certifies on the UI claim form that he/she is
enrolled in a training program and lists a responsible person
connected with the program that certifies that the person is
enrolled and satisfactorily pursuing the program.
SUPPORT
California Labor Federation - Co-Sponsor
California Workforce Association - Co-Sponsor
American Federation of State, County and Municipal Employees,
Hearing Date: June 23, 2010 AB 2058
Consultant: Alma Perez Page 9
Senate Committee on Labor and Industrial Relations
AFL-CIO
California Nurses Association/National Nurses Organizing
Committee
California Professional Firefighters (CPF)
Council of California Goodwill Industries
National Association of Workforce Boards (NAWB)
OPPOSITION
California Chamber of Commerce
California Department of Finance
California Hospital Association
California Manufacturers and Technology Association
* * *
Hearing Date: June 23, 2010 AB 2058
Consultant: Alma Perez Page 10
Senate Committee on Labor and Industrial Relations