BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                            



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                                    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:
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          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  

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            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  

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            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  

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          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,  

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            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

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