BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | AB 1556| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: AB 1556 Author: Perea (D), et al. Amended: 6/17/14 in Senate Vote: 21 SENATE LABOR & INDUSTRIAL RELATIONS COMMITTEE : 4-1, 6/11/14 AYES: Hueso, Leno, Padilla, Mitchell NOES: Wyland SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8 ASSEMBLY FLOOR : 54-21, 4/21/14 - See last page for vote SUBJECT : Unemployment insurance SOURCE : Author DIGEST : This bill makes a number of reforms to the policies and practices in the administration of the Unemployment Insurance (UI) program, as specified. ANALYSIS : Existing law provides for the payment of unemployment compensation benefits through the UI program, administered by the Employment Development Department (EDD), which is a federal-state program that provides weekly UI payments to eligible workers who lose their jobs through no fault of their own. Under existing law, an individual is eligible for UI benefits if he/she meets the following: CONTINUED AB 1556 Page 2 1.Has received enough wages during the base period to establish a claim. 2.Is totally or partially unemployed. 3.Is unemployed through no fault of his/her own. 4.Is physically able to work. 5.Is available for work, meaning ready and willing to immediately accept work. 6.Is actively looking for work. 7.Is approved for training before training benefits are paid. Existing law authorizes an unemployed individual who files a claim for UI benefits or extended duration benefits, to apply to the EDD for a determination of potential eligibility for benefits during a period of training or retraining through the California Training Benefit (CTB) program. The CTB program allows eligible claimants to receive their UI benefits while attending training or retraining programs approved by EDD. Claimants attending an approved training course are not required to look for work, be available for work or accept work while in training. Existing law authorizes an automatic eligibility determination for UI benefits to continue during a training program if it falls within the following: 1.The training is authorized by the federal Workforce Investment Act of 1998 or by the Employment Training Panel. 2.The training is authorized by the federal Trade Act of 1974. 3.The individual is a participant of the CalWORKs program. 4.The individual is a participant in training with a provider that is certified and on the Eligible Training Provider List. 5.The individual is a journey level union member and the training/retraining course of instruction is industry-related CONTINUED AB 1556 Page 3 training necessary due to changes in technology, or industry demands, or is necessary to retain employment. Existing law requires EDD to publish informational material regarding the Unemployment Insurance Code and its programs in English and Spanish. This bill makes a number of reforms to the policies and practices in the administration of the UI program. Specifically, this bill: 1.Requires EDD to translate key documents and publications for both the UI program and State Disability Insurance program into the seven most commonly used languages among participants in each program. 2.Requires EDD to translate website content providing information regarding the process of applying for and receiving UI benefits into the seven additional languages most commonly used by applicants/claimants. 3.Requires the Director of EDD to periodically review the UI program to identify policies and practices which result in delayed benefit payments, increased EDD workload, and provide little or no value in identifying or preventing fraud or abuse in the program. The Director of EDD shall report to the Legislature the results of the first review on or before July 1, 2015. 1.Prohibits the EDD from automatically scheduling an individual for a redetermination of eligibility (and halting benefit payments) for any week in which he/she is participating in a training or education program and has notified EDD of such program. However, if EDD determines that commencement of, or ongoing participation in, this training or education program conflicts with eligibility requirements for UI benefits, EDD may schedule and conduct a determination of eligibility. 1.Requires an individual, to maintain his/her eligibility, to file continued claims during a continuous period of CONTINUED AB 1556 Page 4 unemployment, submit a continued claim not more than 14 days from the end of the last week ending date, or not more than 14 days from the date EDD issued that continued claim. 2.Prohibits an unemployed individual to be disqualified for unemployment compensation benefits solely on the basis that the continued claim was submitted 15 to 21 days from the end of the last week ending date showing on the continued claim, or 15 to 21 days from the date EDD issued that continued claim, whichever is later. FISCAL EFFECT : Appropriation: Yes Fiscal Com.: Yes Local: No SUPPORT : (Verified 6/23/14) Asian Americans Advancing Justice - Los Angeles California Communities United Institute California Labor Federation, AFL-CIO California School Employees Association, AFL-CIO SEIU, Local 1000 OPPOSITION : (Verified 6/23/14) Associated Builders and Contractors of California California Business Roundtable California Chamber of Commerce California Farm Bureau Federation California Grocers Association California Manufactures and Technology Association California Restaurant Association California Retailers Association California Taxpayers Association Family Business Association National Federation of Independent Business ARGUMENTS IN SUPPORT : According to proponents, during the most recent recession, UI kept many distressed communities functioning while local job markets collapsed and many small businesses struggled to survive sharp reductions in consumer demand. However, they argue, in recent years the program has struggled to meet the needs of the unemployed. The vast majority of calls seeking UI assistance fail to reach an operator, most denials and modifications that reach second-level CONTINUED AB 1556 Page 5 appeals are overturned in favor of the worker, and IT failures have delayed or denied benefits for hundreds of thousands of claimants. Proponents argue that while this inability to adequately handle demand remains primarily an issue of funding, system inefficiencies and basic process problems have also played a role. Proponents contend that this bill will address the most immediate of these systematic problems by improving translation of UI information, requiring a review of eligibility determination practices, clarify existing standards for workers enrolled in training programs, and extend a grace period for workers seeking to continue their claim. With these reforms in place, they can begin making serious progress towards improving outcomes for California's unemployed workers. ARGUMENTS IN OPPOSITION : According to opponents, California currently remains in debt to the federal UI trust fund by almost $10 billion; therefore, the state is at risk of incurring the Benefit Cost Rate (BCR) add-on. This tax increase is now an issue for 16 states that have had five or more years during which they had outstanding UI loan balances. Opponents argue that the way BCR is calculated, it would result in an estimated 2% increase in employer's federal UI tax. Federal regulations require that there not be a "net decrease in solvency" in the UI trust fund in order for a state to qualify for a waiver of the BCR add-on. They argue that the net decrease could be created by administrative, regulatory or legislative action. Therefore, they believe this bill is premature in light of pending rules from the federal Department of Labor regarding state requirements for waivers of looming UI tax hikes. ASSEMBLY FLOOR : 54-21, 4/21/14 AYES: Alejo, Ammiano, Atkins, Bloom, Bocanegra, Bonilla, Bonta, Bradford, Brown, Buchanan, Ian Calderon, Campos, Chau, Chesbro, Cooley, Dababneh, Daly, Dickinson, Eggman, Fong, Fox, Frazier, Garcia, Gatto, Gomez, Gonzalez, Gordon, Gray, Hall, Roger Hernández, Holden, Jones-Sawyer, Levine, Lowenthal, Mullin, Muratsuchi, Nazarian, Pan, Perea, V. Manuel Pérez, Quirk, Quirk-Silva, Rendon, Ridley-Thomas, Rodriguez, Salas, Skinner, Stone, Ting, Weber, Wieckowski, Williams, Yamada, John A. Pérez NOES: Achadjian, Allen, Bigelow, Chávez, Conway, Dahle, Donnelly, Beth Gaines, Gorell, Grove, Hagman, Harkey, Jones, CONTINUED AB 1556 Page 6 Logue, Maienschein, Mansoor, Nestande, Patterson, Wagner, Waldron, Wilk NO VOTE RECORDED: Linder, Medina, Melendez, Olsen, Vacancy PQ:kd 6/24/14 Senate Floor Analyses SUPPORT/OPPOSITION: SEE ABOVE **** END **** CONTINUED