BILL ANALYSIS Ó
Senate Committee on Labor and Industrial Relations
Ted W. Lieu, Chair
Date of Hearing: June 22, 2011 20011-2012 Regular
Session
Consultant: Alma Perez Fiscal:Yes
Urgency: No
Bill No: AB 391
Author: Pan
Version: As amended May 27, 2011
SUBJECT
Workforce development: one-stop career centers
KEY ISSUE
Should the Legislature require that the Employment Development
Department (EDD) provide in-person unemployment insurance
benefit assistance at specified one-stop career centers to help
complement the current online, mail and call center system?
Should the Legislature require that EDD fund this in-person
assistance from their UI Program administration moneys? Or if
necessary, should the Legislature require that EDD reallocate
existing resources to implement the provisions of this bill?
PURPOSE
To revise the Unemployment Insurance code and place additional
requirements on the state Employment Development Department
(EDD) with regard to unemployment benefit assistance at one-stop
career centers, as specified.
ANALYSIS
Under existing law , the California Workforce Investment Act
(WIA) provides for workforce investment activities that increase
the employment, occupational attainment, and retention and
earnings of participants, which will improve the quality of the
workforce, reduce welfare dependency, and enhance the
productivity and competitiveness of the nation's economy.
Existing law provides for the payment of unemployment
compensation benefits to eligible unemployed persons during the
period that the person is unemployed, and requires the
Employment Development Department to implement and administer
the program. The Unemployment Insurance (UI) program is a
federal-state program that provides weekly UI payments to
eligible workers who lose their jobs through no fault of their
own. Eligibility for UI benefits requires a claimant to be able
to work, be seeking work, be willing to accept a suitable job,
and meet certain income and other criteria. UI applicants can
apply for benefits by filing an online application, contacting
EDD by telephone or by faxing or mailing EDD an application
available online.
Existing law authorizes the Workforce Services Branch, within
EDD, to administer several statewide workforce preparation
programs and initiatives that focus on preparing adults and
youth for the labor force and building the State's economy.
Workforce investment services are provided through comprehensive
One-Stop Career Centers that provide access to a full range of
services pertaining to educational activities, employer
services, and referrals to other appropriate social services.
Among other things, one-stop career centers make job outreach,
intake, job search and placement assistance, and other related
services available in one location.
This Bill would require the Employment Development Department,
on or before July 1, 2012, to provide in-person unemployment
benefit assistance in a comprehensive one-stop career center in
five workforce investment areas as determined by EDD.
Specifically, this bill would require the department to:
§ Ensure that customer service personnel at those career
centers are fully trained regarding the policy, laws, and
regulations governing eligibility, claims processing, and
procedures for the payment of unemployment compensation
benefits.
Hearing Date: June 22, 2011 AB 391
Consultant: Alma Perez Page 2
Senate Committee on Labor and Industrial Relations
§ Provide printed information regarding eligibility and
the process for filing claims for unemployment compensation
benefits at those one-stop career centers.
§ Fund the unemployment benefit assistance services
provided at these one-stop career centers with existing
money available to the department for the administration of
the unemployment compensation program.
§ Reallocate existing resources, including staff and
equipment, and work with one-stop career center partners in
order to accommodate customer service personnel that will
implement this assistance.
The provisions of this bill would stay in effect until the end
of the calendar day of December 31, 2015, unless a later enacted
statute deletes or extends that date.
COMMENTS
1. Background on EDD and One-Stop Career Centers:
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. In 1995,
the state eliminated the EDD UI field offices and opted for
telephone assistance through call centers. 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.
According to a March 2011 report by the California State
Auditor entitled, "EDD: Its Unemployment Program Has Struggled
to Effectively Serve California's Unemployment in the Face of
Significant Workload and Fiscal Challenges," the EDD initial
claims workload grew by 148 percent from July 2007 to June
2010. While many unemployed are able to use the on-line
Hearing Date: June 22, 2011 AB 391
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Senate Committee on Labor and Industrial Relations
applications, many others have questions about the application
form, don't have access to computers, or encounter problems
with their applications. People encountering difficulties or
questions need to speak with an EDD person who is
knowledgeable about UI. As a result of the high demand for UI
benefits, at any given time there are thousands of people
trying to contact EDD through their call centers, online or by
mail. During the period 2004 to 2008, a total of 73.3 million
calls could not be handled by the UI telephone claim filing
system. In January 2009, another 42 million calls went
unanswered. Callers unable to reach operators were diverted
to a pre-recorded message system that, according to the
author, has cost the state an estimated $5.7 million since
2004.
According to EDD, there are currently 223 One-Stop Career
Centers throughout the state offering various levels of
service. Of these, 143 are Comprehensive One-Stop Career
Centers, 52 are Affiliated Sites, 16 are Workforce Services
offices, and 12 are specialized or mobile sites.
2. Need for this bill?
The UI call centers have been unable to keep up with the
volume of calls generated by the high number of unemployed
Californians, leaving many unemployed workers unable to
navigate the state UI system and obtain the UI benefits they
need.
The EDD has responded to the problems unemployed workers are
facing in filing for benefits by undertaking a number of
initiatives that include the hiring of over 1,600 staff
representatives, increasing UI call center hours to provide
more access to telephone services, implementing a new
toll-free number for individuals to obtain UI information, in
addition to training EDD workforce services program
representatives to provide UI information and claim status
services to individuals reporting to one-stop career centers.
According to EDD, these initiatives have greatly assisted with
serving more UI customers.
However, because of the frustration in being unable to contact
Hearing Date: June 22, 2011 AB 391
Consultant: Alma Perez Page 4
Senate Committee on Labor and Industrial Relations
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 a comprehensive one-stop career center
in five workforce areas in the state, to be determined by EDD.
3. Massachusetts as an Example :
Under the state of Massachusetts' administration of the
government laws, the Division of Unemployment Assistance,
within the Department of Workforce Development, is required to
provide a minimum level of in-person assistance at 15 regional
offices within the state. In addition to access by telephone
to offices of the division, the deputy director of the
division is required to maintain walk-in service, including
the provision of general information, application assistance,
claims information and orientation. At a walk-in center in
the state of Massachusetts, an unemployed worker can file a
new claim for benefits, reopen an existing claim, be
interviewed if there are issues that affect eligibility,
resolve problems with a claim, and attend a career seminar
session. In addition, in the state of Massachusetts a
claimant is deemed to have initiated a claim for unemployment
compensation benefits on the first day that the claimant
contacts or attempts to contact the division, whether or not
the claimant was able to speak with a division representative
at the time.
4. Proponent Arguments :
Proponents of the measure argue that with unemployment rates
at their highest levels in more than two decades, California's
laid-off workers are struggling not only to find new work, but
also to access UI benefits while they search for employment.
According to the author, due to record unemployment rates
nationally, a surge of unemployed workers has led to a flood
Hearing Date: June 22, 2011 AB 391
Consultant: Alma Perez Page 5
Senate Committee on Labor and Industrial Relations
of calls from frustrated claimants to the state's Unemployment
Insurance (UI) call centers where out-of-work Californians are
meeting barriers such as long hold delays, busy signals, or
multiple routings. The author argues that when out-of-work
Californians fail to receive the proper assistance for
applying for their UI benefits by phone many show up in the
state's Workforce Services (WS) one-stop centers where they
are again referred to a phone by a WS employee who is not
committed to answering or resolving questions regarding UI
benefit claims.
According to the author, in 2009 EDD processed a total of 6.5
million initial UI claims. While many customers can utilize
on-line applications and can contact workers in the call
centers, millions of unemployed Californians cannot readily
access services for unemployment benefits. Proponents believe
this bill can save the state money by redirecting the
individual to a one-stop center, rather than forcing them to
call an overloaded system 25 to 30 times or more before
reaching a UI worker who can provide assistance.
Proponents support the efforts that EDD and its employees have
undertaken to ease these backlogs, but laid-off workers need
more help. According to proponents, this is a simple measure
that would allow EDD to adjust its existing resources to give
out-of-work Californians the option of in-person UI assistance
to complement online applications, mail-in, and call center
assistance.
5. Opponent Arguments :
According to opponents, this bill would require the EDD to
determine which 5 workforce investment areas should provide
in-person unemployment assistance and require the use of
existing dollars and resources to meet this mandate. Opponents
argue that shifting resources from the current centralized
call center to in-person services does not guarantee more
efficiency or better access. They argue that instead, current
resources should be prioritized to continue upgrading the
outdated computer systems and hiring more employees for the
call centers if necessary.
Hearing Date: June 22, 2011 AB 391
Consultant: Alma Perez Page 6
Senate Committee on Labor and Industrial Relations
Opponents argue that, although the bill has been narrowed in
scope, it still presents several challenges and leaves many
questions up to the EDD to determine. For example, opponents
argue, the bill does not specify the amount of workers per
center that will be needed. Opponents contend that in the past
EDD has testified that an effective in person assistance would
require a minimum of 3 to 5 individuals per center. Opponents
argue that many of these centers may not have the appropriate
equipment, space, or infrastructure to have EDD staff on site.
In addition, the EDD would have to take their most
experienced call center staff and transfer them to one-stop
career centers further diminishing the quantity and quality of
services provided by already overburdened call centers.
According to opponents, the need to provide individuals with
more access to UI experts is evident, however, they argue that
the state currently has limited resources and any new mandates
will hurt an already fragile system.
6. Prior Legislation :
AB 1827 (Arambula and Solorio) of 2010: Held in Senate
Appropriations Committee
This bill ƯAB 391] is almost identical to AB 1827 which
proposed to require the EDD to provide in-person unemployment
benefit assistance in at least one comprehensive one-stop
career center in each workforce area, as defined. AB 1827 was
held under submission by the Senate Appropriations Committee.
AB 857 (Galgiani) of 2009: Held in Senate Appropriations
Committee
This bill ƯAB 391] is almost identical to AB 857 (Galgiani)
from 2009, which proposed to require EDD to provide in-person
unemployment benefit assistance in at least one comprehensive
state on-stop career center in each workforce area. AB 857
did not include language about reallocating resources to
implement the requirements of the bill, nor did it have a
sunset like this bill does. AB 857 was held under submission
by the Senate Appropriations Committee.
Hearing Date: June 22, 2011 AB 391
Consultant: Alma Perez Page 7
Senate Committee on Labor and Industrial Relations
SUPPORT
Service Employees International Union, Local 1000 - Sponsor
California Labor Federation
CA Conference Board of the Amalgamated Transit Union
CA Conference of Machinists
CA Official Reporters Association
California Labor Federation
California Teamsters Public Affairs Council
Engineers and Scientist of California
International Longshore and Warehouse Union
Professional and Technical Engineers, Local 21
Service Employees International Union, Local 1000
UNITE HERE!
United Food and Commercial Workers-Western States Conference
Utility Workers Union of America, Local 132
OPPOSITION
California Association of Hospitals and Health
Systems-Unemployment Insurance
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 and Technology Association
California Retailers Association
Engineering Contractors Association
Flasher Barricade Association
Marin Builders Association
National Federation of Independent Business
Hearing Date: June 22, 2011 AB 391
Consultant: Alma Perez Page 8
Senate Committee on Labor and Industrial Relations