BILL ANALYSIS Ó AB 391 Page 1 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. AB 391 Page 2 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 AB 391 Page 3 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 AB 391 Page 4 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! AB 391 Page 5 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