BILL ANALYSIS Ó
AB 391
Page 1
ASSEMBLY THIRD READING
AB 391 (Pan)
As Amended May 27, 2011
Majority vote
LABOR & EMPLOYMENT 5-1 APPROPRIATIONS 12-5
-----------------------------------------------------------------
|Ayes:|Swanson, Alejo, Allen, |Ayes:|Fuentes, Blumenfield, |
| |Furutani, Yamada | |Bradford, Charles |
| | | |Calderon, Campos, Davis, |
| | | |Gatto, Hall, Hill, Lara, |
| | | |Mitchell, Solorio |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Miller |Nays:|Harkey, Donnelly, |
| | | |Nielsen, Norby, Wagner |
| | | | |
-----------------------------------------------------------------
SUMMARY : Requires the Employment Development Department (EDD),
on or before July 1, 2012, to provide in-person unemployment
benefit assistance in only five of the comprehensive state
one-stop career centers, as defined. Specifically, this bill :
1)Requires that the unemployment benefit services provided in
the one-stop centers pursuant to this bill shall be funded
with existing monies available to EDD for the administration
of the unemployment insurance compensation program. 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
(Investment Act), requiring the California Workforce
Investment Board (Board) to assist the Governor in performing
specified duties relating to the development, implementation,
AB 391
Page 2
and promotion of various workforce development activities, job
training, and employment investment and work incentive
programs, as specified.
2)Declares, under the 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.
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 : According to Assembly Appropriations Committee:
1)A minimum of 25 staff are likely needed to support the
requirements of the bill in five comprehensive one-stop career
centers statewide.
2)Annual staff cost of $2.7 million in federal funding EDD
receives.
3)Additional one-time costs of in the hundreds of thousands to
provide training and space in one-stop centers to accommodate
added services.
4)One-time costs of likely less than $500,000 (federal) for
equipment and operating expenses, such as furniture and
computers.
COMMENTS : The Unemployment Insurance (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
AB 391
Page 3
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
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
AB 391
Page 4
December 2010. According to EDD, its previous phone system did
not have the capacity to handle the call volume. The State
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 UI 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.
Analysis Prepared by : Lorie Erickson / L. & E. / (916)
319-2091
FN: 0000911