BILL ANALYSIS                                                                                                                                                                                                    ”



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          ASSEMBLY THIRD READING
          AB 1792 (Gomez)
          As Amended  May 23, 2014
          Majority vote 

           LABOR & EMPLOYMENT     5-1      APPROPRIATIONS      12-5        
           
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          |Ayes:|Roger HernŠndez, Alejo,   |Ayes:|Gatto, Bocanegra,         |
          |     |Chau, Holden,             |     |Bradford,                 |
          |     |Ridley-Thomas             |     |Ian Calderon, Campos,     |
          |     |                          |     |Eggman, Gomez, Holden,    |
          |     |                          |     |Pan, Quirk,               |
          |     |                          |     |Ridley-Thomas, Weber      |
          |     |                          |     |                          |
          |-----+--------------------------+-----+--------------------------|
          |Nays:|Gorell                    |Nays:|Bigelow, Donnelly, Jones, |
          |     |                          |     |Linder, Wagner            |
          |     |                          |     |                          |
           ----------------------------------------------------------------- 
           SUMMARY  :   Requires the preparation of an annual report related  
          to employers with employee beneficiaries who are enrolled in  
          public assistance programs, as specified.  Specifically,  this  
          bill  :  

          1)Defines "beneficiary" to mean an individual employed by an  
            employer for at least one quarter (or three months) and  
            enrolled in a public assistance program (unless the individual  
            is enrolled by reason of disability or being over 65 years of  
            age or is employed in California Work Opportunity and  
            Responsibility to Kids (CalWORKS) subsidized employment).

          2)Defines "employer" to mean an individual or organization that  
            employs 25 or more beneficiaries in this state, as specified,  
            including the state, a city, county, city and county,  
            district, or any other governmental employer. 
             
          3)Defines "public assistance program" to mean the Medi-Cal  
            program, CalFresh, and CalWORKS, as specified.

          4)Requires the Department of Finance (DOF), after obtaining  
            specified information from the Employment Development  
            Department (EDD), to transmit and post a report no later than  
            April 15 of each year.








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          5)Provides that the report shall include the following:

             a)   The employer's name.

             b)   The employer's address.

             c)   The total number of beneficiaries each employer employs.

             d)   The percentage of the employer's total workforce in the  
               state that are beneficiaries.

             e)   The total cost to the state of the aggregated benefits  
               provided to an identified employer's employees who are  
               beneficiaries under each public assistance program.

             f)   The total cost to the state of the aggregated benefits  
               provided to each identified employer's employees who are  
               beneficiaries.

          6)Provides that DOF, in collaboration with EDD, the State  
            Department of Health Care Services, and the State Department  
            of Social Services, shall determine the total costs to the  
            state described in 5) e) and f) above.

          7)Specifies that the report, and any list provided to DOF, shall  
            not include the name or identifying information of the  
            individual beneficiary.

          8)Requires the report to remain available to the public online  
            for at least five years.

          9)Provides that this bill shall not be construed to authorize an  
            employer to discourage or prevent an employee from enrolling  
            or continuing enrollment in a public assistance program, nor  
            to discriminate against an applicant or employee for applying  
            to be or being enrolled in a public assistance program.

          10)Prohibits an employer from discharging or in any manner  
            discriminating or retaliating against an employee who enrolls  
            in a public assistance program or refusing to hire a  
            beneficiary for reason of being enrolled in a public  
            assistance program.









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          11)Prohibits an employer from disclosing to a nongovernmental  
            entity that an employee receives or is applying for public  
            benefits.

          12)Requires the Director of EDD to permit the use of specified  
            information in his or her possession to enable DOF to prepare  
            and submit the report, as specified.

          13)Requires, to the extent not prohibited by federal law, the  
            State Department of Health Care Services and the State  
            Department of Social Services to annually inform EDD of the  
            names and social security numbers of all recipients of public  
            assistance benefits, as specified.

          14)Requires the State Department of Health Care Services and the  
            State Department of Social Services to determine the average  
            per individual cost to the state to provide the benefits of  
            public assistance programs and inform EDD and DOF in order to  
            calculate the information required to be reported.

          15)Makes related and conforming changes.

          16)Makes related legislative findings and declarations.

           FISCAL EFFECT  :   According to the Assembly Appropriations  
          Committee:
           
          1)Ongoing costs to DSS of approximately $330,000 to $480,000 to  
            support three to four additional IT personnel and one-time  
            costs of approximately $165,000 for automation to process and  
            transmit Social Security Numbers (SSNs) of recipients of aid  
            under any of the identified programs to the EDD. However, to  
            the extent that an existing file could be given to EDD for  
            data matches for the purposes of the bill, the costs could be  
            significantly lower for DSS. 

          2)One-time and ongoing costs of approximately $35,000 to $60,000  
            to EDD to develop a process for extracting and transmitting  
            data and ongoing costs to annual submit data. EDD estimates  
            there are 21 million recipients receiving aid from one of the  
            identified public assistance programs. 

           COMMENTS  :  This bill proposes to require DOF, in collaboration  
          with other state agencies, to identify and compile a list of  








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          employers with employees who are enrolled in public assistance  
          programs.  The legislative findings and declarations of the  
          measure state that employers that pay low wages and offer no  
          benefits shift the burden of keeping workers out of poverty onto  
          taxpayers.  The resulting increase in the numbers of the working  
          poor stretches the state safety net to the limit and burdens the  
          state budget, programs and services.

          Therefore, this bill states that, in order to promote a deeper  
          understanding of the causes and sources of underemployment,  
          poverty level wages, and the economic impacts on Californians  
          and the state budget, it is appropriate for policymakers to  
          possess a broader set of empirical data with which to make  
          informed decisions.

          This measure is co-sponsored by the California Labor Federation,  
          AFL-CIO, the United Food and Commercial Workers Union, and  
          Service Employees International Union (SEIU) Local 1000.  The  
          sponsors state that, after five years of a brutal recession,  
          California is finally on the road to economic recovery.   
          However, the state's economic recovery has been fueled by growth  
          in low wage, part-time jobs that are rapidly replacing middle  
          class jobs lost during the recession.  Companies that pay  
          low-wages with no benefits force an increasing number of workers  
          to rely on public assistance just to make ends meet.  Even  
          working full-time, many minimum wage workers still qualify for  
          public assistance.

          The purpose of public assistance programs is to help workers  
          through tough times, such as the loss of a job.  They were not  
          designed as a permanent subsidy to low-wage employers who do not  
          provide the wages or benefits necessary for basic necessities.   
          Work is supposed to lead to self-sufficiency, not permanently  
          trap workers in taxpayer funded programs.  Yet, taxpayers are  
          increasingly subsidizing some of the largest and most profitable  
          corporations in the world that are shifting workers onto public  
          programs.

          The sponsors argue that corporations that shift workers onto  
          public benefits also put responsible employers at a competitive  
          disadvantage.  Employers that provide health and retirement  
          benefits and pay living wages have to compete against companies  
          in the same industries that are profiting by sticking taxpayers  
          for their workers' health care and food bills.  Given that  








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          Medi-Cal is the fastest growing area of public spending,  
          companies that shift workers onto public benefits put enormous  
          pressure on the state budget.  The more taxpayers subsidize  
          low-wage employers, the less the state can spend on other budget  
          priorities, like education, infrastructure, and public safety.

          A coalition of groups, including the California Chamber of  
          Commerce, opposes this bill and argues that, instead of enacting  
          policies to help low-income workers or provide the Legislature  
          with valuable information about how to help employers compete  
          while providing better wages and health care, this bill creates  
          a "list of shame" that would expose California employers to  
          liability, targeted media attacks and protests.

          Opponents list a number of factors that they allege influence  
          use of public assistance progams, but contend that this bill  
          examines none of them.  Instead, they argue that this bill, by  
          looking only at the number of employees in a given business who  
          utilize these programs, implies that it is the greed of  
          corporate executives that leads them to pay lower wages and not  
          offer health benefits.  In asking for a report to highlight  
          those employers that "create the greatest burden on the state,"  
          the measure also ignores the fact that even employers who pay  
          lower wages and do not provide health benefits still contribute  
          greatly to the state economy and keep millions of Californians  
          from being completely dependent on public assistance.

          Finally, opponents argue that this bill creates new grounds for  
          litigation by prohibiting retaliation or discrimination against  
          an employee who enrolls in a public assistance program or  
          refuses to hire an individual because he or she is enrolled in a  
          public assistance program.  Therefore, they argue that the  
          measure exposes an employer to costly litigation for alleged  
          discrimination or retaliation each time it makes an adverse  
          employment decision that impacts an employee who has enrolled in  
          one of the three referenced public assistance programs.   
          California employers are already overwhelmed with employment  
          litigation. 

           
          Analysis Prepared by  :    Ben Ebbink / L. & E. / (916) 319-2091 


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