BILL ANALYSIS
Senate Committee on Labor and Industrial Relations
Mark DeSaulnier, Chair
Date of Hearing: July 8, 2009 2009-2010 Regular
Session
Consultant: Alma Perez Fiscal:Yes
Urgency: No
Bill No: AB 857
Author: Galgiani
Version: July 1, 2009
SUBJECT
Workforce development: one-stop career center systems.
KEY ISSUE
Should the Legislature require that the Employment Development
Department (EDD) provide in-person unemployment benefit
assistance at specified one-stop career centers to help
complement the current online, mail and call center system?
Should the Legislature require that EDD fund this in-person
assistance from their UI Program administration moneys?
PURPOSE
To revise the Unemployment Insurance code and place additional
requirements on the state Employment Development Department
(EDD) with regard to unemployment benefit assistance, as
specified.
ANALYSIS
Under existing law , the California Workforce Investment Act
(WIA) provides for workforce investment activities that increase
the employment, occupational attainment, and retention and
earnings of participants, which will improve the quality of the
workforce, reduce welfare dependency, and enhance the
productivity and competitiveness of the nation's economy. The
California Workforce Investment Act serves to implement a state
agency partnership between the California Department of
Education, the California Workforce Investment Board and the
Employment Development Department to collaboratively implement
the Governor's WIA Strategic Plan.
Existing law authorizes the Employment Development Department
(EDD) to administer a variety of services to Californians under
the Job Service, Unemployment Insurance, Disability Insurance,
Workforce Investment, and Labor Market Information programs.
The Unemployment Insurance (UI) program is a federal-state
program that provides weekly UI payments to eligible workers who
lose their jobs through no fault of their own. The UI Program
is financed by employers who pay unemployment taxes on the first
$7,000 of earnings by each worker. Eligibility for UI benefits
requires a claimant to be able to work, be seeking work, be
willing to accept a suitable job, and meet certain income and
other criteria. The benefits range from $40 to $450 per week
in California depending upon earnings during a 12-month base
period. Under federal law, extended benefits are fully paid by
the federal government. UI applicants can apply for benefits by
filing an online application, contacting EDD by telephone or by
faxing or mailing EDD an application available online.
Existing law authorizes the Workforce Services Branch, within
EDD, to administer several statewide workforce preparation
programs and initiatives that focus on preparing adults and
youth for the labor force and building the State's economy.
Workforce investment services are provided through comprehensive
One-Stop Career Centers that provide access to a full range of
services pertaining to educational activities, employer
services, and referrals to other appropriate social services.
This Bill would require the Employment Development Department,
on or before July 1, 2010, to provide in-person unemployment
benefit assistance in at least one comprehensive state one-stop
career center in each workforce area, as defined.
Specifically, this bill would require the department to:
Ensure that customer service personnel at those career
centers are trained regarding the policy, laws, and
regulations governing eligibility, claims processing, and
Hearing Date: July 8, 2009 AB 857
Consultant: Alma Perez Page 2
Senate Committee on Labor and Industrial Relations
procedures for the payment of unemployment compensation
benefits.
Provide printed information regarding eligibility and
the process for filing claims for unemployment compensation
benefits at all one-stop career centers.
Fund the unemployment benefit assistance services
provided at these one-stop career centers with existing
money available to the department for the administration of
the unemployment compensation program.
COMMENTS
1. Background on EDD:
The UI Program, administered by the Employment Development
Department (EDD), is a federal-state system that provides
unemployment compensation to workers who lose their job
through no fault of their own. According to EDD, in the
1990s, the business world embraced computer technology and
even the World Wide Web, leading the way towards a new phase
of EDD where telephone and online services took the place of
in-person assistance. Today, unemployed individuals can file
for benefits on-line, by telephone, mail or fax. EDD offers
some in-person assistance for the filing of a UI claim;
however, individuals with questions on an existing claim are
directed to contact one of the EDD call centers for
assistance, submit inquiries online or by mail.
2. Need for this bill?
With California's unemployment rate currently at 11.5%, the
highest unemployment rate in more than two decades, unemployed
workers are in great need of UI benefits to sustain their
families through this difficult economy. Unfortunately, due
to this unprecedented demand for UI benefits, many unemployed
workers are struggling to access UI benefits. On April 1,
2009, our Committee held an informational hearing entitled,
"Technology at the Employment Development Department: How to
build an EDD that meets the needs of California." During the
Hearing Date: July 8, 2009 AB 857
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Senate Committee on Labor and Industrial Relations
hearing the Committee heard testimony from several UI
applicants who shared their experiences and frustrations in
not being able to reach EDD, either by phone or mail, to apply
for benefits.
According to EDD, in the month of May, the number of people
unemployed in California was 2,138,000, of which almost 1.2
million are receiving regular UI benefits. At the same time
new claims for UI benefits in May were 180,000. As a result of
the high demand for UI benefits, at any given time there are
thousands of people trying to contact EDD through their call
centers, online or by mail. According to information found in
several Sacramento Bee articles, in the past several months
EDD call center operators have been unable to answer millions
of calls from unemployed workers wishing to apply for UI
benefits or inquire about their claim. Callers unable to
reach operators were diverted to a pre-recorded message system
that, according to the author, has cost the state an estimated
$5.7 million since 2004.
The EDD has responded to the problems unemployed workers are
facing in filing for benefits by undertaking a number of
initiatives that include the hiring of almost 900 UI program
representatives, increasing UI call center hours to provide
more access to telephone services, implementing a new
toll-free number for individuals to obtain UI information, in
addition to training EDD workforce services program
representatives to provide UI information and claim status
services to individuals reporting to one-stop career centers.
According to EDD, these initiatives have greatly assisted with
serving more UI customers.
Because of the frustration in being unable to contact EDD by
phone or online, many unemployed workers go to one-stop career
centers for assistance in filing a UI claim and/or with
questions on how to resolve a UI claim problem.
Unfortunately, one-stop career center employees may not be
fully trained to perform the work of UI employees and are
often unable to answer UI specific questions. This bill is
intended to improve access to California's unemployment
insurance benefits by requiring that EDD have available
in-person assistance in at least one comprehensive state
Hearing Date: July 8, 2009 AB 857
Consultant: Alma Perez Page 4
Senate Committee on Labor and Industrial Relations
one-stop career center in each workforce area, as specified.
3. Massachusetts as an Example :
Under the state of Massachusetts' administration of the
government laws, the Division of Unemployment Assistance,
within the Department of Workforce Development, is required to
provide a minimum level of in-person assistance at 15 regional
offices within the state. In addition to access by telephone
to offices of the division, the deputy director of the
division is required to maintain walk-in service, including
the provision of general information, application assistance,
claims information and orientation. At a walk-in center in
the state of Massachusetts, an unemployed worker can file a
new claim for benefits, reopen an existing claim, be
interviewed if there are issues that affect eligibility,
resolve problems with a claim, and attend a career seminar
session. In addition, in the state of Massachusetts a
claimant is deemed to have initiated a claim for unemployment
compensation benefits on the first day that the claimant
contacts or attempts to contact the division, whether or not
the claimant was able to speak with a division representative
at the time.
4. Proponent Arguments :
Proponents of the measure argue that with unemployment rates
at their highest levels in more than two decades, California's
laid-off workers are struggling not only to find new work, but
also to access UI benefits while they search for employment.
Proponents argue that the surge of unemployed workers has lead
to a flood of calls to the states UI call centers where many
cannot get through to get the assistance they need. According
to the author, between 2004 and 2008, more than 73.3 million
calls failed to reach operators at UI call centers and were
diverted to a pre recorded message, costing the state
millions. Proponents believe this bill can save the state
money by redirecting the individual to a one-stop center,
rather than forcing them to call an overloaded system 25 to 30
times or more before reaching a UI worker who can provide
assistance.
Hearing Date: July 8, 2009 AB 857
Consultant: Alma Perez Page 5
Senate Committee on Labor and Industrial Relations
Proponents support the efforts that EDD and its employees have
undertaken to ease these backlogs, but laid-off workers need
more help. This bill will provide the public the option of in
person UI assistance, to complement online applications,
mail-in, and call center applications, and will allow UI
employees an opportunity to once again work in a field office
to assist out-of-work Californian's with their claims. In
addition, proponents argue, this bill will allow applicants
and workers to resolve claims issues quickly and efficiently
while also giving workers the opportunity to get immediate
answers to some of their claims questions, alleviating the
need for corrections later in the process. This help,
proponents argue, will prove especially valuable for
applicants who may confront language or technological barriers
when trying to use EDD's alternative application methods.
5. Opponent Arguments :
Opponents of the measure argue that although the intentions of
the author are commendable, this bill will significantly
increase costs to the already impacted system. Opponents
argue that shifting resources from the current centralized
call center to in-person services does not guarantee more
efficiency or better access. Opponents believe that current
resources should be prioritized to finish the hiring of nearly
800 new employees and fast tracking the upgrade of the phone
and computer systems, and believe that directing EDD to train
individuals to provide services in one-stop career centers
will take away from efforts to improve access within the
current system.
According to opponents, over 10years ago EDD found it more
efficient and effective to centralize their efforts through a
call center, and they believe that returning to a
decentralized model will decrease efficiency and increase
overhead costs to the state. The Employment Development
Department believes that this bill contains statutory
provisions that would be impossible to achieve due various
operational and contractual requirements, and argues that a
change of this magnitude to the UI service delivery system
requires significant advanced planning that covers facility
Hearing Date: July 8, 2009 AB 857
Consultant: Alma Perez Page 6
Senate Committee on Labor and Industrial Relations
and infrastructure needs, staffing levels, etc. EDD argues
that this bill would increase the administrative costs for the
UI program for items such as rent and equipment, training,
etc., which would further reduce EDD's ability to hire the
necessary personnel needed to provide direct services to the
public.
In addition, EDD argues that redirecting the most skilled UI
program representatives would also reduce the staffing levels
at dedicated UI centers that provide telephone and other UI
services. Overall, opponents of the measure argue that
although the intent of the bill is to improve access to
unemployment insurance benefits its mandate will be expensive
and may not provide any relief to those looking to expedite
their UI application.
SUPPORT
Service Employees International Union, Local 1000 - Sponsor
American Federation of State, County and Municipal Employees,
AFL-CIO
California Labor Federation, AFL-CIO
OPPOSITION
California Chamber of Commerce
California Hospital Association
California Hotel & Lodging Association
California Independent Grocers Association
California Manufacturers & Technology Association
Employment Development Department
National Federation of Independent Business
* * *
Hearing Date: July 8, 2009 AB 857
Consultant: Alma Perez Page 7
Senate Committee on Labor and Industrial Relations