BILL ANALYSIS Ó
AB 2197
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Date of Hearing: April 20, 2016
ASSEMBLY COMMITTEE ON INSURANCE
Tom Daly, Chair
AB 2197
(Cristina Garcia) - As Amended March 28, 2016
SUBJECT: Unemployment insurance: classified 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 been given reasonable assurance by
the employer 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
COMMENTS:
1)Purpose . According to the sponsor, classified school
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employees do the essential work that keeps our public schools
up and running. These 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
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
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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 UI 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 had fund
balance of over $582 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 passed on to the participating schools.
Opponents note that the bill would result in significant cost
increases for K-12 school districts and other local
educational agencies. Last year the Assembly Appropriations
Committee provided the following estimate for AB 399
(Ridley-Thomas), which was substantially similar to this bill:
"There are approximately 250,000 classified,
non-certificated employees throughout the state. If 60% of
those employees received the maximum allotment of weeks of
UI during summer vacation each year, it would cost an
additional $90 million per year, each year for four years,
until the cost reached approximately $360 million in fiscal
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year in 2019-20 (School Employees Fund). Costs to the
School Employees Fund are funded by school districts,
county offices of education, community college districts,
and some charter schools, whose employees receive UI
benefits through this fund instead of through the UI Trust
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 UI benefits from the end
of the prior school year.
5)Suggested Amendment . The bill provides that UI benefits be
provided beginning July 1, 2016. The bill should be amended
to begin implementation on July 1, 2017. The amendments
should also defer the repeals of Sections 1451, 1452, and 1453
of Unemployment Insurance Code until July 1, 2017 to conform
with the later implementation date.
6)Previous Legislation .
In 2015, this committee passed AB 399 (Ridley-Thomas) which is
identical to this bill. AB 399 was held on the Assembly
Appropriations Committee Suspense File.
In 2014, this committee passed AB 1638 (Bocanegra) which was
nearly identical to AB 615. The bill was held on the Assembly
Appropriations Committee Suspense File.
In 2013, this committee passed AB 615 (Bocanegra) which
proposed to extend UI benefits to classified school employees.
The bill was held on the Assembly Appropriations Committee
Suspense File.
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REGISTERED SUPPORT / OPPOSITION:
Support
Service Employees International Union, California (sponsor)
California Federation of Teachers (CFT)
Opposition
Association of California School Administrators
California School Boards Association
Riverside County Superintendent of Schools
Analysis Prepared by:Paul Riches / INS. / (916) 319-2086
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