BILL ANALYSIS                                                                                                                                                                                                    



          SENATE COMMITTEE ON APPROPRIATIONS
                             Senator Ricardo Lara, Chair
                            2015 - 2016  Regular  Session

          AB 2197 (Cristina Garcia) - Unemployment insurance:  classified  
          employees
          
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          |Version: May 31, 2016           |Policy Vote: L. & I.R. 4 - 1    |
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          |Urgency: No                     |Mandate: No                     |
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          |Hearing Date: August 1, 2016    |Consultant: Robert Ingenito     |
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          This bill meets the criteria for referral to the Suspense File.


          


          Bill  
          Summary: AB 2197 would permit classified school employees to be  
          eligible to collect unemployment insurance (UI) benefits between  
          school years with or without a reasonable assurance of being  
          employed in the subsequent academic year.


          Fiscal  
          Impact: The Employment Development Department (EDD) indicates  
          that this bill would result in increased UI costs for all school  
          employers. Because of insufficient data related to the split  
          between classified and non-classified workers, the magnitude of  
          the increase is unknown. However, EDD expects that any increase  
          in the amount of UI benefits paid as a result of this bill would  
          likely be nominal.

          Additionally, the bill would also require EED's IT systems to be  







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          reprogrammed to allow an administrative function to trigger  
          benefit payments on or off depending on the Budget Act  
          appropriation, manage multiple floating claim awards to track  
          disbursement of benefits across multiple claims and fiscal  
          years, and collect new eligibility information when new or  
          additional claims are filed.  EDD estimates related one-time  
          costs to be approximately $3.9 million.


          Background:  Current law provides unemployment insurance benefits to  
          employees who lose their job through no fault of their own.  
          However, employees of public and private non-profit schools are  
          precluded from collecting benefits when school is out of session  
          if they have reasonable assurance that they will be employed in  
          the subsequent school year. 
          Classified education workers comprise dozens of different  
          occupational titles and job descriptions that help our schools  
          function, including paraprofessional teaching assistants,  
          nurses' aides, office secretaries, clerical staff, custodians,  
          bus drivers, and cafeteria workers. Most are lower-wage workers.




          Proposed Law:  
           This bill would allow employees of a public school who are not  
          teachers, researchers, or administrators to be eligible for  
          unemployment insurance benefits in the period between two  
          academic years on the following schedule: (1) two weeks of  
          benefits during 2017, beginning July 1, provided that funds are  
          appropriated for that purpose in the annual Budget Act, (2) four  
          weeks of benefits during 2018, beginning July 1, provided that  
          funds are appropriated for that purpose in the annual Budget  
          Act, (3) six weeks of benefits during 2019, beginning July 1,  
          provided that funds are appropriated for that purpose in the  
          annual Budget Act, and (4) eight weeks of benefits during 2020,  
          and each year thereafter, beginning July 1, provided that funds  
          are appropriated for that purpose in the annual Budget Act.


          Related  
          Legislation: AB 399 (Ridley-Thomas) (2015) was nearly identical  
          to this bill, and was held under submission on the Suspense File  
          of the Assembly Appropriations Committee.








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          Staff  
          Comments: The US Department of Labor has notified EDD that there  
          are three federal conformity issues with this bill, which may  
          have implications for employers' Federal Unemployment Tax Act  
          (FUTA) credits. Employers are generally given a FUTA credit of  
          up to 5.4 percent; however, if this bill is enacted as written  
          and the federal government sanctions the State for  
          nonconformity, California employers could be liable for the full  
          6 percent FUTA rate and the state could lose its federal UI  
          administrative grant.


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