BILL ANALYSIS Ó
AB 399
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Date of Hearing: April 22, 2015
ASSEMBLY COMMITTEE ON INSURANCE
Tom Daly, Chair
AB 399
Ridley-Thomas - As Amended April 14, 2015
SUBJECT: Unemployment insurance: classified school employees
SUMMARY: Allows classified school employees to collect
unemployment insurance (UI) benefits between school years.
Specifically, this bill:
1)Exempts classified public school employees from the
prohibition on educational employees collecting UI benefits.
2)Increases the maximum duration of UI benefits for classified
public school employees as follows:
a. 2 weeks effective July 1, 2016
b. 4 weeks effective July 1, 2017
c. 6 weeks effective July 1, 2018
d. 8 weeks effective July 1, 2019
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EXISTING LAW:
1)Provides UI benefits to employees who lose their job through
no fault of their own.
2)Requires employers to pay state and federal taxes to pay the
costs of administering and providing UI benefits.
3)Permits public employers to provide UI benefits to their
employees on a reimbursement basis in lieu of paying payroll
taxes.
4)Prohibits employees of public and private non-profit
educational institutions from collecting UI benefits between
academic years if they have reasonable assurance of being
employed in the next academic term.
5)Permits non-professional employees of public and non-profit
educational institutions to collect UI benefits retroactively
should they not be employed in the next academic term after
receiving reasonable assurance of future employment.
6)Requires employers to provide documentation of the reasonable
assurance when that notice is given.
7)Prohibits, as a matter of federal law, providing UI benefits
to professional employees between academic years.
FISCAL EFFECT: Undetermined
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COMMENTS:
1)Purpose . According to the author, classified school employees
do the essential work that keeps our public schools up and
running. These extraordinary workers keep our campuses safe,
clean, and efficient. Most importantly, they strive to improve
the daily lives of our students. Despite the important and
hard work of classified school employees, many struggle to
support their families with incomes that are often inadequate
to pay for food, housing, and health care. And while certified
school employees, such as administrators, teachers,
librarians, and nurses, earn middle class incomes and benefits
that can last through the summer breaks, classified school
employees do not. Unlike other employees who receive UI
benefits during their regular seasonal breaks, classified
school employees are ineligible to receive those same
benefits. The only option for classified school employees to
support their families during the summer is to find another
job. Yet classified school employees are often unable to
find work during the summer because employers are reluctant to
hire and invest in a short-term employee. Thus, a classified
school employee's only real option for summer employment is a
job with a summer school program, but those jobs are scarce.
Being excluded from UI benefits creates a serious financial
hardship for a classified school employee that does not exist
for their fellow education workers.
2)Federal Law . Federal law generally requires equal treatment
for the payment of UI benefits on the basis of service to
certain nonprofit organizations, Indian tribes, and state and
local government workers in the same amount, on the same
terms, and subject to the same conditions, as other service
subject to state law. An exception to the equal treatment
requirement pertains to the denial of UI for "professional"
and "nonprofessional" employees of educational institutions
during a period between or within academic years or terms when
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there is a contract or reasonable assurance that the employee
will go back to work in the same or similar capacity in the
ensuing academic year/term. State law must deny UI benefits
to professional school employees between and within the
academic years or terms when a contract or reasonable
assurance exists. State law may deny UI benefits to
nonprofessional school employees between and within the
academic years or terms when a contract or reasonable
assurance exists.
3)Public Agency Costs . This bill would likely have relatively
minor impact to the Unemployment Insurance Trust Fund (trust
fund) that pays for most UIC benefits because public K-12
school districts and community colleges commonly elect to
participate in the School Employees Fund (SEF) in lieu of
paying payroll taxes. The SEF is a special reimbursable
financing method administered by the Employment Development
Department which collects contributions based upon a
percentage of total wages paid by public schools and community
college districts. Money deposited in the SEF is used to
reimburse the trust fund for the cost of benefits paid to
former employees. All 72 community college districts and
1,298 county offices of education, public school districts,
and charter schools participate in the SEF. The SEF has a
projected fund balance of over $485 million at the end of the
2014-15 fiscal year. The costs of paying for these
additional benefits from this bill will be borne by the SEF,
and the SEF costs will have to be reimbursed by the
participating schools.
Opponents note that the bill would result in significant cost
increases for K-12 school districts and other local
educational agencies that have experienced dramatic budget
cuts in recent years and continue to operate within very tight
budgets. Last year the Assembly Appropriations Committee
provided the following estimate for AB 1638 (Bocanegra) which
is consistent with the final costs of this bill:
"There are approximately 250,000 non-certificated,
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classified employees throughout the state. If 60% of those
employees received 8 weeks of UI during summer vacation
each year, it would cost approximately $360 million (School
Employees Fund)."
4)Retroactive Benefits . School employees expect to not work at
school (and generally not be paid) during the break between
academic years. In recognition of this reality, current law
provides a mechanism for classified employees to receive
unemployment benefits retroactively should they not be
employed at the next school year. This ensures that a
classified employee who expected to be employed in the next
school year, but was not, can collect UIC benefits from the
end of the prior school year.
5)Previous Legislation . In 2014, this committee passed AB 1638
(Bocanegra) which proposed to extend UI benefits to classified
school employees. The bill was held on the Assembly
Appropriations Committee Suspense File. In 2013, this
committee passed AB 615 (Bocanegra) which is nearly identical
to AB 1638. The bill was held on the Assembly Appropriations
Committee Suspense File.
REGISTERED SUPPORT / OPPOSITION:
Support
Service Employees International Union, California (sponsor)
California Federation of Teachers (co-sponsor)
California Teachers Association
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California Labor Federation
California School Employees Association
Opposition
California Association of School Business Officials
Orange County Department of Education
Riverside County Superintendent of Schools
Analysis Prepared by:Paul Riches / INS. / (916) 319-2086