BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | SB 667| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: SB 667 Author: Jackson (D) Amended: 4/6/15 Vote: 21 SENATE LABOR & IND. REL. COMMITTEE: 5-0, 4/22/15 AYES: Mendoza, Stone, Jackson, Leno, Mitchell SENATE APPROPRIATIONS COMMITTEE: 7-0, 5/4/15 AYES: Lara, Bates, Beall, Hill, Leyva, Mendoza, Nielsen SUBJECT: Disability insurance: eligibility: waiting period SOURCE: Legal Aid Society-Employment Law Center DIGEST: This bill (1) waives the 7-day waiting period for an individual who has already served the 7-day waiting period for the initial claim when that person files a subsequent claim for disability benefits for the same or a related condition within 60 days after the initial disability benefit period, and (2) requires the Employment Development Department (EDD) to submit a report regarding the effect of the modified waiting period to the Legislature by January 1, 2020, as specified. ANALYSIS: Existing law: 1)Provides, under the State Disability Insurance (SDI) program, a state-mandated partial wage-replacement insurance plan funded through employee payroll deductions to provide short-term Disability Insurance and Paid Family Leave benefits to eligible workers temporarily unable to work due to non-work SB 667 Page 2 related illness or injury, pregnancy, or childbirth. 2)Provides eligible individuals can receive disability benefits equal to one-seventh (1/7th) of his or her weekly benefit amount for each full day during which he or she is unemployed due to a disability if the Director of EDD makes specified findings, including that: a) He/she has made a disability benefits claim as required by regulations. b) He/she has been unemployed and disabled for a waiting period of 7-consecutive days during each disability benefit period. During this 7-day waiting period, no disability benefits are payable. (Labor Code §2627) 1)Defines "disability benefit period" as the continuous period of unemployment and disability beginning with the first day for which the individual files a valid claim for disability benefits. 2)Provides that if an individual receives two consecutive periods of disability due to the same or related cause or condition and separated by a period of not more than 14 days, then they are considered as one disability benefit period. (Labor Code §2608) This bill: 1)Waives the 7-day waiting period for an individual who has already served the 7-day waiting period for the initial claim when that person files a subsequent claim for disability benefits for the same or a related condition within 60 days after the initial disability benefit period. 2)Requires the Director of EDD to submit a report regarding the effect of the modified waiting period to the Legislature by January 1, 2020, as specified. Background Under the SDI program, an employee must serve a waiting period SB 667 Page 3 of seven consecutive days of wage loss prior to receiving partial wage replacement disability benefits. If an employee return to work after a period of temporary disability for more than 2 weeks before experiencing a reoccurrence of the same condition they must re-serve the seven consecutive day waiting period before being eligible for additional benefits. According to the EDD, in 2014 there were a total of 699,486 SDI claims filed of which 5,853 were from individuals who filed multiple claims for the same condition. The author argues that this second waiting period significantly disadvantages employees who are managing a chronic illness or injury, like chronic debilitating back pain or those who have returned to work after initial cancer treatment, but must have chemotherapy treatments every three weeks. This bill addresses this problem by extending from two weeks to 60 days the period of time under which an employee can reopen an SDI claim without having to suffer a new 7-consecutive day waiting period of wage loss. FISCAL EFFECT: Appropriation: No Fiscal Com.:YesLocal: No According to the Senate Appropriations Committee, EDD indicates that it would incur one-time costs of about $57,000 (Disability Insurance Fund) to implement the provisions of the bill. While it is unknown how many additional claims might be eligible for payment if the recovery period were expanded, a review of the claimants who file multiple claims in the same year for the same condition revealed a very small amount of claimants filing multiple initial claims for the same condition. SUPPORT: (Verified4/22/15) Legal Aid Society-Employment Law Center (source) California Labor Federation, AFL-CIO California Rural Legal Assistance Foundation National Association of Social Workers, California Chapter UCSF Helen Diller Family Comprehensive Cancer Center, Social SB 667 Page 4 Work Department OPPOSITION: (Verified4/22/15) None received ARGUMENTS IN SUPPORT: The author believes that this bill ensures that the SDI system better serves the needs of employees managing chronic health conditions. According to the author, if an employee returns to work after a period of disability in which they served the seven consecutive-day unpaid waiting period before drawing SDI benefits, that employee shouldn't have to serve another seven consecutive-day unpaid waiting period, if they must leave work again within a two month period for additional treatment. The author argues that the unpaid waiting period places an unnecessary hardship on workers managing a chronic health condition and disincentives employees from returning to work as soon as and for as long as possible. This bill is a common sense reform that will give workers with serious health issues better access to much needed SDI benefits. Prepared by:Alma Perez / L. & I.R. / (916) 651-1556 5/15/15 15:07:28 **** END ****