BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 2197|
|Office of Senate Floor Analyses | |
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THIRD READING
Bill No: AB 2197
Author: Cristina Garcia (D)
Amended: 5/31/16 in Assembly
Vote: 21
SENATE LABOR & IND. REL. COMMITTEE: 4-1, 6/22/16
AYES: Mendoza, Jackson, Leno, Mitchell
NOES: Stone
SENATE APPROPRIATIONS COMMITTEE: 5-2, 8/11/16
AYES: Lara, Beall, Hill, McGuire, Mendoza
NOES: Bates, Nielsen
ASSEMBLY FLOOR: 51-27, 6/2/16 - See last page for vote
SUBJECT: Unemployment insurance: classified employees
SOURCE: Service Employees International Union
DIGEST: This bill permits 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 next academic year.
ANALYSIS:
Existing law:
1)Vests the Employment Development Department (EDD) with the
responsibility of ensuring employers remit appropriate UI
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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, and 3001-3015)
2)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.
(Unemployment Insurance Code §1253.3)
3)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.
(Unemployment Insurance Code §1253.3)
4)Requires employers to provide documentation of the reasonable
assurance when that notice is given. (Unemployment Insurance
Code §1253.3)
This bill allows employees of a public school who are not
teachers, researchers, or administrators to be eligible for UI
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.
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.
Comments
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1)Need for this bill?
The sponsor notes that, while classified employees do the
essential work our public schools up and running, classified
employees are not permitted to collect UI benefits during the
summer recess. This places significant hardship on the
classified employee and his or her family, and it requires the
classified employee finds short-term employment for the summer
recess. However, the sponsor argues that 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. Additionally, the sponsor argues that a
classified school employee's only real option for summer
employment is a job with a summer school program, but those
jobs are scarce.
AB 2197 addresses this by allowing classified employees to
collect UI benefits through a stepped schedule that would
begin in 2017 and top out in 2020.
2)"Reasonable Assurance" and UI
In Ross v. CUIAB (1981), 178 Cal. Rptr. 421, the Court of
Appeals defined "reasonable assurance" as "an agreement which
contemplated the re-employment of the affected school employee
but which he or she could not enforce." This concept has been
concretized in statute and regulation, and statute also
requires that a notice of reasonable assurance be in writing.
Once an educational district gives a worker a notice of
reasonable assurance, that worker cannot request UI unless
they are not employed in the following year as the notice of
reasonable assurance assured.
In the case of a tenured teacher, he or she would likely have
an option through the governing collective bargaining
agreement to have his or her wages extended through the summer
recess. In the case of classified employees, however, this is
not the case, as many are paid hourly, rather than on a
salary. Additionally, in some cases such an extension of wages
through the summer recess could push wages below the minimum
wage, violating existing wage and hour law.
3)School Employees Fund (SEF)
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From the Assembly Insurance Committee analysis:
"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."
FISCAL EFFECT: Appropriation: Yes Fiscal
Com.:YesLocal: No
According to the Senate Appropriations Committee, the EDD
indicates that their information technology systems would need
to be 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.
SUPPORT: (Verified8/23/16)
Service Employees International Union (source)
American Federation of State, County and Municipal Employees,
AFL-CIO
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California School Employees Association
California School Teachers Association
California Teachers Association
LIUNA Local, 777
OPPOSITION: (Verified 8/12/16)
California Association of School Business Officials
Orange County Department of Education
Riverside County Superintendent of Schools
Small School Districts' Association
ARGUMENTS IN SUPPORT: The proponents argue that classified
employees 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. 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. AB 2197 removes this serious financial
hardship by making classified employees eligible for UI benefits
during the summer recess.
ARGUMENTS IN OPPOSITION: Opponents argue that, despite its
phased-in approach, AB 2197 will result in a significant fiscal
impact on school districts. Specifically, opponents note that
district unemployment accounts are funded through a combination
of payroll taxes and quarterly local experience charges. By
expanding UI benefit eligibility, AB 2197 will result in
decreased School Employers Fund balances, increased local
experience charges, and increases in the unemployment insurance
payroll tax rate. Opponents also note that districts are not
reimbursed for UI expenses as they had been in the past, leaving
them to absorb the increased costs associated with the
requirements of AB 2197. Opponents therefore argue that, noting
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there is no budget appropriation in this year's budget, they
must oppose AB 2197.
ASSEMBLY FLOOR: 51-27, 6/2/16
AYES: Alejo, Arambula, Atkins, Bloom, Bonilla, Bonta, Brown,
Burke, Calderon, Campos, Chau, Chiu, Chu, Cooley, Cooper,
Dababneh, Daly, Dodd, Eggman, Frazier, Cristina Garcia,
Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray,
Roger Hernández, Holden, Irwin, Jones-Sawyer, Levine, Lopez,
Low, McCarty, Medina, Mullin, Nazarian, O'Donnell, Quirk,
Ridley-Thomas, Rodriguez, Salas, Santiago, Mark Stone,
Thurmond, Weber, Williams, Wood, Rendon
NOES: Achadjian, Travis Allen, Baker, Bigelow, Brough, Chang,
Chávez, Dahle, Beth Gaines, Gallagher, Grove, Hadley, Harper,
Jones, Kim, Lackey, Maienschein, Mathis, Mayes, Melendez,
Obernolte, Olsen, Patterson, Steinorth, Wagner, Waldron, Wilk
NO VOTE RECORDED: Linder, Ting
Prepared by:Gideon L. Baum / L. & I.R. / (916) 651-1556
8/23/16 9:40:22
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