BILL ANALYSIS Ó
AB 2659
Page 1
ASSEMBLY THIRD READING
AB 2659 (Blumenfield)
As Introduced February 24, 2012
Majority vote
INSURANCE 12-1 APPROPRIATIONS 17-0
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|Ayes:|Solorio, Hagman, |Ayes:|Fuentes, Harkey, |
| |Bradford, | |Blumenfield, Bradford, |
| |Charles Calderon, Carter, | |Charles Calderon, Campos, |
| |Feuer, Hayashi, Miller, | |Davis, Donnelly, Gatto, |
| |Olsen, Skinner, Torres, | |Hall, Hill, Lara, |
| |Wieckowski | |Mitchell, Nielsen, Norby, |
| | | |Solorio, Wagner |
|-----+--------------------------+-----+--------------------------|
|Nays:|Beth Gaines | | |
| | | | |
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SUMMARY : Requires the Employment Development Department (EDD) to
develop and implement an outreach plan to provide information to
employers about the shared work unemployment benefits program.
Specifically, this bill :
1)Requires EDD to develop and implement an outreach plan designed to
provide information and inform employers of the shared work
unemployment compensation benefit program.
2)Requires the plan to include outreach to statewide and local
chambers of commerce, employer advisory councils, and small
business advisory councils.
EXISTING LAW :
1)Provides that an unemployed person is eligible for unemployment
insurance (UI) benefits if he or she becomes unemployed through no
fault of their own, has worked in UI-covered employment, is able
and available to work, and is totally or partially unemployed
during the week for which a claim is filed.
2)Provides that a person is eligible for "shared work unemployment
compensation benefits" under the following circumstances:
a) The person works less than his or her normal weekly hours of
work for his or her regular employer during a particular week;
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b) The EDD Director finds that the regular employer has reduced
or restricted the person's normal hours of work or has rehired
a person previously laid off and reduced that person's normal
hours of work from those previously worked;
c) The employer has a plan to, in lieu of layoff, reduce
employment and stabilize the work force by a program of sharing
the work remaining after a reduction of total hours of work and
a corresponding reduction in wages of at least 10%; and,
d) The employer must reduce the hours worked of at least two
employees and at least 10% of the employer's regular permanent
work force.
3)Provides that a person who is eligible for a shared work
unemployment benefit during any week of partial unemployment shall
be paid a benefit equal to the percentage of reduction of the
person's wages resulting from the approved plan and multiplied by
the person's weekly benefit amount.
4)Specifies that a plan for shared work unemployment benefits shall
expire in six months.
FISCAL EFFECT : According to the Assembly Appropriations Committee,
no direct fiscal impact.
COMMENTS :
Purpose . According to the author, the bill is intended to increase
awareness among employers of this important program in order to
reduce unemployment and stretch dollars further in the Unemployment
Insurance Fund. Shared work programs, which help prevent
devastating and often debilitating layoffs, can be an effective
solution to California's high unemployment rate.
Shared Work Programs . Current law allows employers to participate
in the shared work unemployment compensation benefits program which
makes employees eligible to receive a reduced amount of unemployment
compensation benefits if their work hours are reduced by more than
10%. For example, a company with 100 employees may need to lay off
20% of its workforce as business slows. When it chooses to
participate in a shared work program, the company keeps its full
workforce but moves to a four-day work week. That allows the
employer to achieve the same 20% savings in payroll costs but
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without layoffs. Employees not only keep their jobs but they also
receive unemployment insurance benefits to make up for part of their
reduced wages.
A 2004 study of the shared work program in California found that
participating companies tended to be larger, older, unionized
manufacturers with higher paid employees. Participation in the
shared work program has increased dramatically during the recession.
Initial shared work compensation claims rose from 45,276 in 2007 to
a peak of 219,580 in 2009. Claims have declined to 111,347 in 2011.
Prior Legislation . In 2010, identical legislation was vetoed (SB
1472 (Leno)). The Governor's veto message provided: "This bill
would duplicate existing efforts of the Employment Development
Department by requiring additional marketing of the Work Sharing
Program. This program has already experienced a significant
increase in participation by California employers as a means to
retain an experienced workforce during this severe recession.
Therefore, this bill is unnecessary at this time."
EDD Outreach . EDD provides information to the employer community
regarding the shared work program through its ongoing outreach
efforts. These efforts include:
1)Direct communication with the California Employer Advisory Council
and the Small Business Advisory Council.
2)Posting information on the EDD Web site.
3)Periodically including information on the program in its
newsletters.
4)Including information on the program in the California Employer's
Guide published by EDD.
Analysis Prepared by : Paul Riches / INS. / (916) 319-2086FN:
0003471