BILL ANALYSIS ------------------------------------------------------------ |SENATE RULES COMMITTEE | AB 2364| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ THIRD READING Bill No: AB 2364 Author: Nava (D) Amended: 8/12/10 in Senate Vote: 21 SENATE LABOR & INDUSTRIAL RELATIONS COMM : 4-1, 6/23/10 AYES: DeSaulnier, Ducheny, Leno, Yee NOES: Hollingsworth NO VOTE RECORDED: Wyland SENATE APPROPRIATIONS COMMITTEE : 6-3, 8/2/10 AYES: Kehoe, Alquist, Corbett, Leno, Wolk, Yee NOES: Ashburn, Emmerson, Wyland NO VOTE RECORDED: Price, Walters ASSEMBLY FLOOR : 74-0, 4/22/10 - See last page for vote SUBJECT : Unemployment insurance: benefits: good cause to leave work SOURCE : Employment Development Department DIGEST : This bill permits the Employment Development Department to award Unemployment Insurance benefits to workers who leave their jobs to protect family members from domestic violence. Senate Floor Amendments of 8/12/10 double-joint this bill with AB 2055 (De La Torre). CONTINUED AB 2364 Page 2 ANALYSIS : Existing federal and state law establishes an Unemployment Insurance (UI) program that is a federal-state partnership to provide partial wage replacement benefits to people who are unemployed through no fault of their own. Existing federal law in the American Recovery and Reinvestment Act of 2009 (ARRA) provides additional funding to states for purposes of paying UI benefits and modernizing UI programs, but conditions that funding on the adoption by a state of certain requirements, including a domestic violence "good cause" exception for voluntary resignations. Existing state law establishes an "alternative base period" (ABP) method for calculating eligibility for UI benefits to which certain claimants are entitled. Existing state law provides that a person who resigns to protect himself or herself or his or her children from domestic violence remains eligible for UI benefits. This resignation is defined as a "good cause" resignation and is not charged against the employer's UI account. Existing state law requires that an un-cashed warrant drawn from the Unemployment Fund, Unemployment Administration Fund, or Disability Fund reverts to the fund after three years. Existing state law references a "leisure sharing" program to be administered by the Employment Development Department (EDD). This bill: 1. Broadens the definition of a "good cause" exception due to domestic violence to include a worker who resigns to protect his or her family from domestic violence. 2. Requires that the EDD notifies a UI claimant of which method of calculation was used to determine eligibility for UI benefits. 3. Clarifies that a UI claim may be cancelled if all of the AB 2364 Page 3 following apply: A. The individual has not been deemed ineligible for unemployment compensation benefits; B. The individual has not been overpaid unemployment compensation benefits; and C. The individual has not collected unemployment compensation benefits. 4. Reduces the time period that an un-cashed warrant drawn from the Unemployment Fund, Unemployment Administration Fund, or Disability Fund reverts to the fund to 1 year. 5. Repeals the statutory reference to the "leisure sharing" program. Comments In 2009, Congress passed and President Obama signed the American Reinvestment and Recovery Act as part of the larger stimulus package to combat the economic recession. The ARRA offered states a portion of $7 billion to modernize their unemployment insurance benefit programs, but required the states also include certain reforms, starting with the adoption of an ABP when calculating benefits. Once the ABP was adopted, the state needed to adopt two other reforms in order to be eligible for all of the available UI modernization funds. Under the ARRA, California is eligible for approximately $839 million. Since California adopted ABP with the passage of AB 29 3X (Coto) last year, EDD is focusing on ensuring that the additional reforms are in place in order to apply for the ARRA funds by August of 2011. Without those additional reforms, California will only receive one-third ($280 million) of available ARRA funds. The federal Department of Labor (DOL) recently notified EDD that while California currently has a "good cause" exception for victims of domestic violence to receive UI benefits in the event of a voluntary resignation, the exception is too proscriptive, as the ARRA requires that the "good cause" exemption extends to, at a minimum, to the victim's immediate family. This bill would broaden the AB 2364 Page 4 existing exception in order to meet federal requirements, ensuring California will receive all available ARRA funds. This bill also makes minor, technical changes to law in order to clarify existing law. Those changes include clarifying the circumstances of when an individual may withdraw a UI claim; removing reference to the "Leisure Sharing" program, which hasn't been funded in more than 25 years; and conforming UI Code provisions on the length of time an un-cashed UI or DI warrant can be outstanding to Government Code provisions. "Immediate Family" versus "Family" As was discussed earlier, the ARRA requires that the domestic violence "good cause" exemption extend to, at a minimum, the victim's "immediate family". This would include the spouse, parents, and minor children only. DOL circulars suggest that states consider also including other groups, such as foster children, step children, and grandparents. The language in this would extend the domestic violence "good cause" exemption to a wider group of family members than is required by federal law. This would include registered domestic partners, siblings, grandparents, grandchildren, son or daughter-in-law, step children, foster children, and any guardian or person with whom the claimant has assumed reciprocal rights, duties, and liabilities of a parent-child or grandparent-grandchild relationship. Prior Legislation AB 29 3X (Coto), Chapter 23, Statutes of 2009-10, Third Extraordinary Session, created the alternative base period of California's UI program. This bill passed the Senate Floor on 3/26/09 (31-7). FISCAL EFFECT : Appropriation: Yes Fiscal Com.: Yes Local: No According to the Senate Appropriations Committee: AB 2364 Page 5 Fiscal Impact (in thousands) Major Provisions 2010-11 2011-12 2012-13 Fund Expanded definition of minor, absorbable costs annually Special* domestic violence for UI benefits *Unemployment Fund SUPPORT : (Verified 8/17/10) Employment Development Department (source) American Civil Liberties Union California Commission on the Status of Women California Communities United Institute California Labor Federation California Nurses Association/National Nurses Organizing Committee National Association of Social Workers - California Chapter ARGUMENTS IN SUPPORT : Supporters note that one of the main reasons victims stay with or return to abusers is due to an inability to afford to leave. Supporters further note that the California family is changing - according to a 2008 AARP study, 6.2 million multi-generational households in America, and supporters note that this number has probably only increased due to the recession. Supporters argue workers who resign to protect a grandchild or a parent from an abuser do not lack less of a "good cause" than workers resigning to protect a child. Finally, supporters note that, without this legislation, California stands to lose hundreds of millions of dollars necessary for the modernization of our UI program. ASSEMBLY FLOOR : AYES: Adams, Ammiano, Anderson, Arambula, Bass, Beall, Bill Berryhill, Tom Berryhill, Blakeslee, Block, Bradford, Brownley, Buchanan, Charles Calderon, Carter, Chesbro, Conway, Cook, Coto, Davis, De La Torre, De Leon, DeVore, Emmerson, Eng, Evans, Feuer, Fletcher, Fong, Fuentes, Fuller, Furutani, Gaines, Galgiani, Garrick, Gilmore, AB 2364 Page 6 Hagman, Hall, Harkey, Hayashi, Hernandez, Hill, Jeffries, Jones, Knight, Lieu, Logue, Bonnie Lowenthal, Ma, Mendoza, Miller, Monning, Nava, Nestande, Niello, Nielsen, V. Manuel Perez, Portantino, Ruskin, Salas, Saldana, Silva, Skinner, Smyth, Solorio, Audra Strickland, Swanson, Torlakson, Torres, Torrico, Tran, Villines, Yamada, John A. Perez NO VOTE RECORDED: Blumenfield, Caballero, Huber, Huffman, Norby, Vacancy PQ:nl 8/17/10 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END ****