BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 1556
                                                                  Page  1


          ASSEMBLY THIRD READING
          AB 1556 (Perea)
          As Amended  March 17, 2014
          Majority vote 

           INSURANCE           8-2         APPROPRIATIONS      12-4        
           
           ----------------------------------------------------------------- 
          |Ayes:|Perea, Bradford, Ian      |Ayes:|Gatto, Bocanegra,         |
          |     |Calderon, Cooley,         |     |Bradford,                 |
          |     |Dababneh, Frazier,        |     |Ian Calderon, Campos,     |
          |     |Gonzalez, V. Manuel Pérez |     |Eggman, Gomez, Holden,    |
          |     |                          |     |Pan, Quirk,               |
          |     |                          |     |Ridley-Thomas, Weber      |
          |     |                          |     |                          |
          |-----+--------------------------+-----+--------------------------|
          |Nays:|Allen, Beth Gaines        |Nays:|Bigelow, Allen, Donnelly, |
          |     |                          |     |Wagner                    |
           ----------------------------------------------------------------- 

           SUMMARY  :  Codifies a number of reforms to the policies and  
          practices in the unemployment insurance (UI) program.   
          Specifically,  this bill  :  

          1)Requires the Employment Development Department (EDD) to  
            translate key documents and publications for both the UI  
            program and state disability insurance (SDI) program into  
            seven additional languages.

          2)Requires EDD to translate Web site pages providing information  
            regarding applying for and receiving UI benefits into seven  
            additional languages.

          3)Requires the EDD director to periodically review the UI  
            program to identify policies and practices that delay benefit  
            payments, increase EDD workload, and provide little or no  
            value in identifying or preventing fraud in the UI program.

          4)Requires the EDD director to report the results of the first  
            review to the Legislature on or before July 1, 2015.

          5)Prohibits EDD from automatically halting the payment of UI  
            benefits and requiring a redetermination of eligibility when a  
            claimant begins a training or education program.








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          6)Prohibits EDD from automatically halting the payment of UI  
            benefits and requiring a redetermination of eligibility until  
            a claim certification form is more than 21 days late.

           EXISTING LAW  :

          1)Provides unemployment insurance benefits to workers who are  
            laid off or leave their jobs for good cause.

          2)Requires recipients of UI benefits to answer the following  
            questions for each week of benefits claimed:

            a)   Were you healthy enough to work?

            b)   Were you available to accept full-time work?

            c)   Did you look for work?

            d)   Did you refuse any work?

            e)   Did you begin attending school or training?

            f)   Did you earn any money?

          3)Requires EDD to publish informational material in both English  
            and Spanish.

           FISCAL EFFECT  :  According to the Assembly Appropriations  
          Committee, negligible additional state costs.

           COMMENTS  :

          1)Purpose.  On November 6, 2013, the Assembly Insurance  
            Committee held an oversight hearing to address problems  
            created in the UI program associated with the rollout of a new  
            computer system. Recommendations were made in the hearing to  
            help EDD improve several aspects of the UI program. A follow  
            up letter with those action items was sent to EDD.  EDD has  
            implemented some of those action items and expects to take  
            further action, specifically call center improvements, by the  
            end of June.  This bill ensures that key policy changes  
            implemented by EDD are reflected in statute, and requires that  
            EDD work to increase the efficiency of the UI program on an  








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            ongoing basis.

          2)UI Program Performance.  The UI program has struggled with  
            poor service levels for many years.  The program has failed to  
            meet key federal performance standards, including timeliness  
            of payment standards, for over a decade.  However, UI program  
            performance plummeted in September 2013 after EDD encountered  
            problems after deploying a new computer system.  Hundreds of  
            thousands of claims were delayed and the EDD call centers were  
            overwhelmed with millions of calls from affected claimants.   
            Ongoing problems associated with the deployment of the new  
            computer system and continuously declining staffing levels  
            left the program staggering under the weight of the added  
            workload.    

          3)Budget Proposal.  On February 7, 2014, the Secretary of the  
            Labor and Workforce Agency (Agency) directed EDD to take a  
            range of actions to address performance problems in the UI  
            program.  A letter from the Agency Secretary to EDD outlined  
            the Administration's plan for addressing the problems with the  
            UI program.   The plan includes:

            a)   Hiring 280 additional staff, starting March 1, 2014.

            b)   Retaining 250 permanent intermittent staff currently in  
          place until June 30, 2015.

            c)   Continue overtime pay.

            d)   Rehiring up to 50 program staff that are trained and can  
          provide UI services immediately.

            e)   Hiring 155 program staff to fill existing vacancies.

             f)   Implementing virtual hold/automatic call notification  
               technology for callers to EDD's UI system to improve  
               customer service.

            g)   Obtaining additional information technology expertise at  
          EDD.

          4)Language Barriers.  The American Community Survey reports that  
            more than 43% of Californians speak a language other than  
            English at home.  The same survey reports that nearly 20% of  








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            Californians report that they speak English "less than very  
            well."  EDD is pursuing a "self-service" strategy to better  
            manage the UI workload, but it has not provided many of the  
            materials that claimants can use to navigate the self-service  
            options in languages other than English and Spanish.  In order  
            for EDD to execute their self-service strategy it needs to  
            make more of its materials and Web site available in more  
            languages.  EDD has committed to translating key forms and  
            explanatory materials in seven additional languages (existing  
            law already requires documents to be translated into Spanish).


           Analysis Prepared by  :    Paul Riches / INS. / (916) 319-2086 


                                                                FN: 0003141