BILL ANALYSIS �
Senate Committee on Labor and Industrial Relations
Ted W. Lieu, Chair
Date of Hearing: May 8, 2013 2013-2014 Regular
Session
Consultant: Gideon L. Baum Fiscal:No
Urgency: No
Bill No: SB 558
Author: Lieu
As Introduced/Amended: May 1, 2013
SUBJECT
Unemployment insurance: Employment Development Department.
KEY ISSUE
Should the Legislature permit the Employment Development
Department to accept electronic request from an employee for the
employee's wage information?
ANALYSIS
Existing law vests the Employment Development Department (EDD)
with the responsibility of ensuring employers remit appropriate
Unemployment Insurance (UI) contributions and to collect the
employee wage deductions to the Disability Fund. EDD uses these
funds to finance the Unemployment Insurance and Disability
Insurance (DI) Programs.
(Unemployment Insurance Code �� 301, 976, 984, 1025-1037,
1555-1562, & 3001-3015)
Existing law also authorizes EDD to collect personal income
taxes required to be withheld by employers. (Unemployment
Insurance Code �� 13000 &13020)
Existing law requires that EDD collects appropriate data in
order to carry out the responsibilities listed above. This
information includes the employer's name and address, the number
and contact information of employees employed by an employer,
the wages paid to those employees, and any independent
contractors that have performed services for an employer.
(Unemployment Insurance Code �� 1085-1093)
Existing law requires that, unless specifically provided, the
information obtained in the administration of the UI Program and
DI program are confidential and must be used for the exclusive
use and information of the director of Employment Development
Department (EDD) in discharge of his or her duties. Any person
violating the confidentiality of this information is guilty of a
misdemeanor. (Unemployment Insurance Code �1094)
Existing law provides that any employee or his or her
representative may receive his or her wage information upon
written request by the employee. The information shall be
provided without charge. (Unemployment Insurance Code �1094)
This bill would allow the Employment Development Department to
permit employees to request their wage information in a form
other than in writing.
This bill would make additional conforming changes.
COMMENTS
1. Need for this bill?
Due to the responsibilities of the Employment Development
Department (EDD) in receiving the state payroll tax
remittances, EDD has a complete record of every employee's
wage information. Current law allows for an employee or his
or her representative to request the employee's wage
information from the Employment Development Department.
However, according to the Employment Development Department, a
little less than 6,400 employees requested their wage data in
2012. In the past three years, the average is a bit under
6,000 employee requests per year.
The author and the proponents of this measure feel that this
low level of requests is a sign that the program is
underutilized and needs to be modernized. SB 558 seeks to do
this by allowing EDD to accept non-written requests from the
Hearing Date: May 8, 2013 SB 558
Consultant: Gideon L. Baum Page 2
Senate Committee on Labor and Industrial Relations
employee, but NOT the employee's representative. This allows
EDD to explore the possibility of the request being electronic
while continuing to accept written requests and also protect
the confidentiality of the employee's wage information.
2. A Brief Discussion on the Prior Version of SB 558:
SB 558 was originally heard in Senate Labor Committee on April
10th. At that hearing, the author put the bill over to
address the concerns raised by the opposition. The bill was
then amended on May 1, 2013, and this analysis reflects those
amendments.
At the April 10th hearing, the opponents noted the U.S.
Department of Labor's Unemployment Insurance Program Letter
No. 19-12, which dealt with the disclosure of confidential
unemployment insurance information to third party entities.
The letter only dealt with third parties ; it did not deal with
the employee or the employee's representative/agent. SB 558
did not, nor does it currently, allow a third party to access
an employee's wage data.
As noted above, existing law prohibits third party access to
EDD's data, and SB 558 would not impact or alter that
prohibition. As stated in UI Program Letter 19-12, state
statute would need to specifically allow a third party access
to UI data - it could not be done by inference or accident.
3. A Brief Discussion of the Uniform Electronic Transactions Act
(UETA):
Under current law, an employee would only be able to request
his or her information by submitting a signed letter from the
employee with his or her name, address, telephone number,
social security number, and years for which the employee wants
wage information. EDD can also take this information by fax.
Currently, however, EDD does not accept any electronic
request for wage information.
Under the Uniform Electronic Transactions Act (Civil Code
��1633.1-1631.17), a contract is considered a valid contract
if signed with an electronic signature if both parties have
agreed to conduct business electronically. As a governmental
Hearing Date: May 8, 2013 SB 558
Consultant: Gideon L. Baum Page 3
Senate Committee on Labor and Industrial Relations
agency, UETA would apply to the Employment Development
Department. If EDD were to develop an online form with the
relevant information, it would be possible for EDD to take an
individual employee's request for wage information in an
electronic format under the UETA.
Therefore, SB 558 follows a similar path to the UETA, allowing
for an electronic signature in the provision of a governmental
service.
4. Proponent Arguments :
None on file.
5. Prior Legislation :
SB 1284 (Lieu) of 2012 would have allowed the Director of
Employment Development to electronically transmit wage
information of an employee to a creditor, upon the execution
of a release by an employee. SB 1284 was set for a hearing
before this Committee, but the hearing was cancelled at the
request of the author.
SB 820 (Sher and Bowen), Statutes of 1999, Chapter 428,
creates the Uniform Electronic Transactions Act.
SUPPORT
None on file.
OPPOSITION
None on file.
Hearing Date: May 8, 2013 SB 558
Consultant: Gideon L. Baum Page 4
Senate Committee on Labor and Industrial Relations