BILL ANALYSIS
Senate Committee on Labor and Industrial Relations
Mark DeSaulnier, Chair
Date of Hearing: June 23, 2010 2009-2010 Regular
Session
Consultant: Alma Perez Fiscal:Yes
Urgency: No
Bill No: AB 1827
Author: Arambula and Solorio
Version: As amended June 1, 2010
SUBJECT
Workforce development: one-stop career centers
KEY ISSUES
Should the Legislature require that the Employment Development
Department (EDD) provide in-person unemployment insurance
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? Or if
necessary, should the Legislature require that EDD reallocate
existing resources to implement the provisions of this bill?
PURPOSE
To revise the Unemployment Insurance code and place additional
requirements on the state Employment Development Department
(EDD) with regard to unemployment benefit assistance at one-stop
career centers, 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.
Existing law provides for the payment of unemployment
compensation benefits to eligible unemployed persons during the
period that the person is unemployed, and requires EDD to
implement and administer the program. 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. 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. 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.
Among other things, one-stop career centers make job outreach,
intake, job search and placement assistance, and other related
services available in one location.
This Bill would require the Employment Development Department,
on or before July 1, 2011, to provide in-person unemployment
benefit assistance in at least one comprehensive one-stop career
center in each workforce area, as defined. Specifically, this
bill would require the department to:
Hearing Date: June 23, 2010 AB 1827
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Senate Committee on Labor and Industrial Relations
Ensure that customer service personnel at those career
centers are fully trained regarding the policy, laws, and
regulations governing eligibility, claims processing, and
procedures for the payment of unemployment compensation
benefits.
Provide printed information regarding eligibility and
the process for filing claims for unemployment compensation
benefits at those 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.
Reallocate existing resources, including staff and
equipment, and work with one-stop career center partners in
order to accommodate customer service personnel that will
implement this assistance.
The provisions of this bill would stay in effect until the end
of the calendar day of December 31, 2014, unless a later enacted
statute deletes or extends that date.
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
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Senate Committee on Labor and Industrial Relations
of EDD where telephone and online services took the place of
in-person assistance. In 1995, the state eliminated the EDD
UI field offices and opted for telephone assistance through
call centers. 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.
While many unemployed are able to use the on-line
applications, many others have questions about the application
form, don't have access to computers, or encounter problems
with their applications. People encountering difficulties or
questions need to speak with an EDD person who is
knowledgeable about UI. 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. In December of 2008, 25.6 million callers to UI call
centers received busy signals or recordings saying to try
again later. During the period 2004 to 2008, a total of 73.3
million calls could not be handled by the UI telephone claim
filing system. In January 2009, another 42 million calls went
unanswered. 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.
2. Need for this bill?
With California's unemployment rate currently at 12.6%, 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, the
UI call centers have been unable to keep up with the volume of
calls generated by the high number of unemployed Californians,
leaving many unemployed workers unable to navigate the state
UI system and obtain the UI benefits they need.
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 over 1,600 staff
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Senate Committee on Labor and Industrial Relations
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.
However, 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
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
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Senate Committee on Labor and Industrial Relations
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, sadly, an estimated 2.3 million Californians,
or 12.4 percent of the labor force, are unemployed.
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.
Proponents support the efforts that EDD and its employees have
undertaken to ease these backlogs, but laid-off workers need
more help. However, proponents argue that when unemployed
workers go to a one-stop looking for assistance with their UI
claim, the workers at the one-stop career centers are left
pointing to a phone and telling them that they need to call
into the UI system. According to proponents, any workforce
services worker who is able to answer UI questions and handle
the UI problem, has probably not had UI training in more than
10 years.
According to proponents, this is a simple measure that would
allow EDD to adjust its existing resources to give out-of-work
Californians 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.
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Consultant: Alma Perez Page 6
Senate Committee on Labor and Industrial Relations
5. Opponent Arguments :
No letters of opposition have been received by this committee;
however, the analysis of this bill from the assembly states
that some associations are opposed because this bill would
significantly shift costs and resources used to administer the
UI Fund, potentially creating a disruption in the
delivery of benefits to the unemployed. In addition, they
argue that shifting resources from the current centralized
call center to in-person services does not guarantee more
efficiency or better access. According to the analysis,
opponents believe that current resources should be prioritized
to continue upgrading the outdated computer systems and hire
more employees for the call centers.
6. Prior Legislation :
AB 857 (Galgiani) of 2009: Held in Senate Appropriations
This bill [AB 1827] is almost identical to AB 857 (Galgiani)
from 2009, which proposed to require EDD to provide in-person
unemployment benefit assistance in at least one comprehensive
state on-stop career center in each workforce area. AB 857
did not include language about reallocating resources to
implement the requirements of the bill, nor did it have a
sunset like this bill does. AB 857 was held under submission
by the Senate Appropriations Committee.
SUPPORT
Service Employees International Union, Local 1000 - Sponsor
California Labor Federation
OPPOSITION
None received to date.
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Hearing Date: June 23, 2010 AB 1827
Consultant: Alma Perez Page 7
Senate Committee on Labor and Industrial Relations
Hearing Date: June 23, 2010 AB 1827
Consultant: Alma Perez Page 8
Senate Committee on Labor and Industrial Relations