BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 391
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          Date of Hearing:   April 13, 2011

                     ASSEMBLY COMMITTEE ON LABOR AND EMPLOYMENT
                                Sandre Swanson, Chair
                   AB 391 (Pan) - As Introduced:  February 14, 2011
           
          SUBJECT  :   Workforce development: one-stop centers.

           SUMMARY :  Requires the Employment Development Department (EDD), 
          on or before July 1, 2012, to provide in-person unemployment 
          benefit assistance in at least one comprehensive state one-stop 
          career center in each workforce area, as defined.  Specifically, 
           this bill  :  

          1)Requires that the unemployment benefit services provided in 
            the one-stop centers pursuant to this measure shall be funded 
            with existing monies available to EDD for the administration 
            of the unemployment insurance compensation program.  Also, 
            requires EDD to reallocate existing resources, including staff 
            and equipment to implement the assistance, as defined.

          2)Repeals the measure as of December 31, 2015, unless a later 
            statute is enacted to extend or delete that date.

           EXISTING FEDERAL LAW  establishes the federal Workforce 
          Investment Act of 1998, which provides for workforce investment 
          activities that states may participate in.
           
          EXISTING STATE LAW  :

          1)Establishes the California Workforce Investment Act, requiring 
            the California Workforce Investment Board (Board) to assist 
            the Governor in performing specified duties relating to the 
            development, implementation, and promotion of various 
            workforce development activities, job training, and employment 
            investment and work incentive programs, as specified.
           
           2)Declares, under the California Workforce Investment Act, that 
            it is the intent of the Legislature to deliver comprehensive 
            workforce services to job seekers, students, and employers 
            through a system of one-stop career centers to, among other 
            things, make job outreach, intake, job search and placement 
            assistance, and other related services available in one 
            location.









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          3)Provides for the payment of unemployment compensation benefits 
            to eligible unemployed persons during the period that the 
            person is unemployed, and requires the EDD to implement and 
            administer the unemployment compensation program.  

          FISCAL EFFECT  :   Unknown

           COMMENTS  :  The UI Program, administered by the EDD, is a 
          federal-state system that provides unemployment compensation to 
          workers who lose their job through no fault of their own.  
          According to EDD, in the 1990s, the business world embraced 
          computer technology and even the World Wide Web, leading the way 
          towards a new phase of EDD where telephone and online services 
          took the place of in-person assistance. Today, unemployed 
          individuals can file for benefits on-line, by telephone, mail or 
          fax.  EDD offers some in-person assistance for the filing of a 
          UI claim; however, individuals with questions on an existing 
          claim are directed to contact one of the EDD call centers for 
          assistance, submit inquiries online or by mail.  

          With California's unemployment rate at 12.2%, as of February 
          2011, unemployed workers are in great need of UI benefits to 
          sustain their families through this difficult economy.  
          Unfortunately, due to this unprecedented demand for UI benefits, 
          many unemployed workers are struggling to access UI benefits.  
          On April 1, 2009, the Senate Labor and Industrial Relations 
          Committee held an informational hearing entitled, "Technology at 
          the Employment Development Department: How to build an EDD that 
          meets the needs of California."  During the hearing the 
          Committee heard testimony from several UI applicants who shared 
          their experiences and frustrations in not being able to reach 
          EDD, either by phone or mail, to apply for benefits.  

          According to EDD, in the month of February 2011, the number of 
            people unemployed in
          California was 2,202,000.  As a result there, is a tremendous 
            demand for UI benefits and at any
          given time there are thousands of people trying to contact EDD 
            through their call centers, online
          or by mail.  According to information found in several 
            Sacramento Bee articles, in the recent past 
          EDD call center operators have been unable to answer millions of 
            calls from unemployed 
          workers wishing to apply for UI benefits or inquire about their 
            claim.  Callers unable to reach








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          operators were diverted to a pre-recorded message system that 
            cost the state an estimated $5.7
          million since 2004. 

          According to the March 2011 California State Auditor's report 
          regarding the EDD's unemployment program struggles, EDD has 
          generally attributed its poor performance in recent years to its 
          high workload and to staffing shortages resulting from a delay 
          in federal funding.  The EDD increased staff and allowed them to 
          work overtime to try to help improve performance.  The Report 
          points out that one of the most significant actions the EDD has 
          been undertaking to increase the public's timely access to 
          unemployment services has been the development of a new phone 
          system, which it activated at its six primary call centers in 
          December 2010.  According to EDD, its previous phone system did 
          not have the capacity to handle the call volume.  The Auditor's 
          office performed a capacity analysis which suggests the new 
          system should be able to handle a higher volume of calls, 
          allowing callers to access the voice response system.  However, 
          the capacity analysis and early data from the new phone system 
          suggest that access to agents may continue to be a challenge

          Frustrated with being unable to contact EDD by phone or online, 
          many unemployed workers go to one-stop career centers for 
          assistance in filing a UI claim and/or with questions on how to 
          resolve a UI claim problem.  Unfortunately, one-stop career 
          center employees may not be fully trained to perform the work of 
          UI employees and are often unable to answer UI specific 
          questions.  This bill is intended to improve access to 
          California's unemployment insurance benefits by requiring that 
          EDD have available in-person assistance in at least one 
          comprehensive state one-stop career center in each workforce 
          area, as specified.   

           ARGUMENTS IN SUPPORT  :

          The California Labor Federation strongly supports this bill 
          stating that bringing trained UI workers into the field offices 
          will allow applicants and workers to resolve claims issues 
          quickly and efficiently.  They also state, this bill will 
          provide workers the opportunity to get immediate answers to some 
          of their claims questions, alleviating the need for corrections 
          later in the process and is especially valuable for applicants 
          who may confront language or technological barriers when trying 
          to access EDD's alternate application methods.  Other supporters 








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          believe this bill would by shifting resources for the in-person 
          assistance at the one-stop career centers will result in greater 
          access for more applicants.

           ARGUMENTS IN OPPOSITION  :

          A group of employer organizations, which include among others, 
          the California Manufacturers & Technology Association, 
          California Retailers Association and the California Chamber of 
          Commerce oppose this measure, stating that shifting resources 
          from the current centralized call center to in-person services 
          does not guarantee more efficiency or better access and doing so 
          brings with it many logistical challenges that can be costly.  
          They also state that many centers may not have the appropriate 
          equipment, the space needed to assist UI applicants, security or 
          infrastructure to have EDD staff on site.  Transferring fully 
          trained EDD staff from the call centers to the one-stop career 
          centers further diminishes the quantity and quality of services 
          provided by already overburdened call centers.  Finally, they 
          argue that an reevaluation of the whole system should be 
          required prior to any changes instead of a piecemeal approach 
          this bill would implement.

           PRIOR LEGISLATION  :

          AB 1827 (Arambula/Solorio) of 2010, was substantially similar to 
          this measure and was held in Senate Appropriations Committee.

          AB 857 (Galgiani) of 2009, was also substantially similar to 
          this bill and was held in Senate Appropriations Committee.

           REGISTERED SUPPORT / OPPOSITION  :   

           Support 
           
          CA Conference Board of the Amalgamated Transit Union
          CA Conference of Machinists
          CA Official Court Reporters Association
          California Labor Federation, AFL-CIO
          California Teamsters Public Affairs Council
          Engineers and Scientists of California
          International Longshore and Warehouse Union
          Professional and Technical Engineers, Local 21
          Service Employees International Union, Local 1000
          UNITE HERE!








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          United Food and Commercial Workers-Western States Conference
          Utility Workers Union of America, Local 132

           Opposition 
           
          California Chamber of Commerce
          California Chapter of the American Fence Association
          California Fence Contractors' Association
          California Grocers Association
          California League of Food Processors
          California Manufacturers & Technology Association
          California Retailers Association
          Engineering Contractors' Association
          Flasher Barricade Association
          Marin Builders' Association
          National Federation of Independent Business
           
          Analysis Prepared by  :    Lorie Erickson / L. & E. / (916) 
          319-2091