BILL ANALYSIS
AB 2058
Page 1
Date of Hearing: March 24, 2010
ASSEMBLY COMMITTEE ON INSURANCE
Jose Solorio, Chair
AB 2058 (Block) - As Introduced: February 18, 2010
SUBJECT : Unemployment Insurance: Retraining Benefits
SUMMARY : Eliminates a series of requirements for participating
in the state's retraining benefits program in order to allow
unemployed people to receive unemployment insurance (UI)
benefits while enrolled in a training program on a full-time
basis. Specifically, this bill :
1)Declares the policy of this state to assist individuals with
unemployment insurance (UI) benefits if these individuals need
training to upgrade their skills to become competitive in the
labor market.
2)Makes UI recipients eligible to participate in training or
retraining programs if the Director of the Employment
Development Department (EDD) determines the state unemployment
rate equals or exceeds 8.5 percent during a recent three-month
period.
3)Provides that UI benefits shall not be denied to an otherwise
qualified unemployed worker because he or she is in training.
4)Eliminates the requirement of state law that the EDD Director
approve the training program.
5)Deems automatically eligible for "retraining benefits" an
unemployed person who files a UI claim during a period of
training or retraining. Retraining benefits allows eligible
UI recipients to participate in training programs on a
full-time basis while receiving their UI benefits. Retraining
benefits are also known as the California Training Benefits
Program.
6)Eliminates the provision of law that requires a determination
of potential eligibility for retraining benefits to be issued
if the EDD Director finds the training is authorized by the
federal Workforce Investment Act, by the state Employment
Training Panel, by the federal Trade Act of 2002, or the
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individual is a participant in CalWORKS.
7)Deletes the provision of law that requires EDD to issue a
determination of potential eligibility for retraining benefits
to an unemployed person if the EDD Director finds that all
eight conditions apply. (See item #5 in Existing Law
section.)
8)Makes an unemployed person eligible for retraining benefits if
he or she is able to work and certifies on the UI claim form
that he or she is enrolled in a training program designed to
increase or improve their job skills and employability.
9)Eliminates the authority of unemployed people to receive a
training extension if the person applies no later than the
16th week of receiving UI benefits. Under existing law, a
training extension provides the claimant with a possible extra
26 weeks of UI benefits.
10)Requires EDD to inform all UI claimants of the availability
of retraining benefits, by on-line means. This information
shall be made available on EDD's website in close proximity to
information on UI claim forms. Existing law already requires
this information to be conveyed verbally and in written form.
11)Deletes the provision of law that limits access to retraining
benefits unless the EDD Director finds both of the following:
a) the person is potentially eligible for retraining
benefits or a training extension of UI benefits, and
b) the person submits with each claim a written
certification executed by a responsible person connected
with the training program certifying that the individual is
enrolled in and satisfactorily pursuing the training course
of instruction.
12)Provides that if a person fails to submit biweekly
information documenting eligibility for any week of training
or retraining, he or she shall be ineligible to receive any
retraining benefits for that week.
13)Deletes the provision of law that prohibits the payment of
retraining benefits during the period of training for any week
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with respect to which the person receives training benefits or
allowances pursuant to any state or federal law providing for
the payment of such benefits, but excluding costs of training
paid pursuant to the federal Trade Act of 1974, as amended.
EXISTING LAW :
1)Declares the policy of this state to assist individuals with
UI benefits if these individuals need training in demand
occupations to become competitive in the labor market.
2)Provides that UI benefits shall not be denied to an otherwise
qualified unemployed worker because he or she is in training
approved by the EDD Director.
3)Allows an unemployed person who files a UI claim to apply to
EDD for a determination of potential eligibility for
"retraining benefits" during a period of training. Retraining
benefits allow people who qualify for UI benefits to
participate in training programs on a full-time basis and
receive UI benefits while being relieved of the obligations to
be available for work and to actively search for work each
week.
4)Requires EDD to issue a determination of potential eligibility
for retraining benefits to an unemployed individual if the EDD
Director finds that the training is authorized by the federal
Workforce Investment Act, the state Employment Training Panel,
the federal Trade Act of 1974, as amended, or the individual
is a participant in the CalWORKS Program and has entered into
a contract with the county welfare department to participate
in an education or training program.
5)Requires EDD to issue a determination of potential eligibility
for retraining benefits if the EDD Director finds that all of
the following facts apply:
a) The person has been unemployed for 4 or more continuous
weeks, or the person is unemployed and unlikely to return
to his or her most recent workplace because of a plant
closure or a substantial reduction in employment, or
because of a mental or physical disability which prohibits
the individual form utilizing existing occupational skills;
b) There is a lack of demand in the labor market area for
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his or her occupational skills and the lack of employment
opportunities is expected to continue for an extended
period of time;
c) The training course of instruction relates to an
occupation or skill for which there are, or are expected to
be in the immediate future, reasonable employment
opportunities in the labor market area in this state in
which the individual intends to seek work;
d) If the person is a journey level union member, the
training course of instruction is specific job-related
training necessary due to changes in the technology, or
necessary to retain employment or to become more
competitive in obtaining employment;
e) The training or retraining course of instruction is one
approved by the EDD Director and can be completed within
one year;
f) The training or retraining course is a full-time course
prescribed for the primary purpose of training the
applicant in skills that will allow him or her to obtain
immediate employment in a demand occupation and is not
primarily intended to meet the requirements of any degree
from a college, community college, or university;
g) The individual can be reasonably expected to complete
the training or retraining successfully; and
h) The beginning date of training is more than 3 years
after the beginning date of training last approved for the
individual.
6)Provides that an unemployed individual receiving UI benefits,
who applies for retraining benefits no later than the 16th
week of receiving UI benefits, and is determined eligible for
the retraining benefits shall be entitled to a training
extension on his her UI claim to complete the approved
training.
7)Requires EDD to inform all UI claimants of the retraining
benefits. This information shall be conveyed verbally or in
written form.
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8)Requires the training extension of UI benefits to be charged
to the employer reserve accounts.
9)Limits access to retraining benefits unless the EDD Director
finds both of the following:
a) the person is potentially eligible for retraining
benefits or a training extension of UI benefits, and
b) the person submits with each claim a written
certification executed by a responsible person connected
with the training program certifying that the individual is
enrolled in and satisfactorily pursuing the training course
of instruction.
10)Prohibits the payment of retraining benefits during the
period of training or retraining to any individual for any
week with respect to which that individual receives training
benefits or allowances pursuant to any state or federal law
providing for the payment of such benefits, but excluding
costs of training paid pursuant to the federal Trade Act o
1974, as amended.
FISCAL EFFECT : Undetermined.
COMMENTS :
1)Purpose . The purpose of this bill is to allow unemployed
workers receiving UI benefits to continue their coverage while
enrolled in job training or education courses to develop the
skills necessary for the state's changing work environment.
This bill would directly remedy the loss of UI benefits by
automatically approving training when the unemployment rate
equals or exceeds 8.5 percent and removes other barriers.
2)Background . This bill affects "Retraining Benefits" (as
phrased in Sections 1266 to 1274.10 of the Unemployment
Insurance Code), or the "California Training Benefits
Program," as called by EDD on its printed materials and its
website. It is the same program. The retraining benefits
program allows people receiving UI benefits to participate in
approved training programs without actively seeking work. EDD
is responsible for determining whether UI recipients are
eligible for retraining benefits and may continue to receive
UI compensation.
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In May 2009, the U.S. Department of Labor issued a guidance
letter to state agencies such as EDD that administer the UI
Program. Specifically, Training and Employment Guidance
Letter No. 21-08 encourages states to widen the types of
training and the conditions under which education and training
are considered "approved training" for purposes of the state's
UI law. States are also asked to reconsider their laws and
regulations, and applicable administrative requirements, to
determine if their approved training requirements are
appropriate to the current economy. That guidance letter
strongly encourages states to
broaden their definition of approved training for UI
beneficiaries during economic downturns.
Currently, until a determination of eligibility for retraining
benefits is complete, EDD will suspend the UI benefits. With
the current severe recession, many unemployed Californians are
trying to regain competitive job skills by participating in
the California Training Benefits Program. Unfortunately, the
UI benefits of many Californians who indicate on an EDD form
that they're enrolled in training have their UI benefits
suspended for a period of 4 to 8 weeks. As a result, many
Californians decide to drop out of the job training to
preserve their eligibility for UI benefits. This is contrary
to the direction of the federal Department of Labor which has
been strongly encouraging states to streamline their
administrative procedures and laws, if necessary, to assist
unemployed people to regain competitive job skills for the
current economy. In fact, many people who experience a
suspension of UI benefits are found to have been eligible for
both UI and retraining benefits. This bill proposes a series
of statutory changes to improve training opportunities.
3)Arguments in Support. According to the sponsor of the bill,
the California Workforce Association, this bill:
a) Continues UI benefits to unemployed Californians who are
in training,
b) Eliminates lengthy determination periods,
c) Makes it possible for program participants to enroll in
training that will result in a college degree,
d) Suspends the 4-week waiting period to enroll in training
and receive California Training Benefits,
e) Suspends the regular eligibility criteria when the
unemployment rate reaches 8.5%,
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f) Allows participants to be in training longer than one
year, and
g) Allows representatives of training programs to sign
forms certifying that individuals have enrolled in and are
participating in training.
4)Arguments in Opposition . The California Chamber of Commerce
and the California Manufacturers and Technology Association
state their opposition to this bill because it reaches further
than timely delivery of benefits and proposes to automatically
approve enrollment in training programs when the unemployment
rate equals or exceeds 8.5%. These groups also state that the
bill would create a different public policy which could lead
to fraud and abuse since unemployed individuals could use
their UI benefits to make lifestyle changes beyond those
required for re-employment, regardless of real employment
opportunities.
5)Related Legislation . This Legislative Session, AB 2748
(Furutani) proposes as state policy that unemployed
individuals be provided retraining benefits made available
under the federal American Recovery and Reinvestment Act
(ARRA) of 2009. Also, SB 968 (McLeod) proposes a series of
changes to the retraining benefits program that are similar to
those proposed by AB 2058.
6)Clarifying Changes Recommended:
a) Specify the Name of the Program . Under existing law,
the statutory article which provides authority for UI
recipients to simultaneously participate in training
programs, without losing UI, is titled "Retraining
Benefits." Over the years, this program has become known
as the California Training Benefits Program. In order to
avoid public confusion, it is suggested that this article
be re-titled the California Training Benefits Program to
reflect the name of the program already printed in
thousands of pamphlets, the name posted on EDD's website,
and the name used by EDD staff when speaking with the
public. In addition, it is recommended that the bill be
amended to formally name this program the California
Training Benefits Program.
b) Program Eligibility During Periods of High Unemployment .
The bill proposes to make UI recipients eligible to
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participate in "training or retraining programs" if the EDD
Director determines the state unemployment rate equals or
exceeds 8.5 percent during a recent three-month period.
Since the state operates a variety of training programs, it
is recommended that the bill be amended (on page 4, line 4)
to specify that recipients of UI benefits shall be eligible
to participate in the California Training Benefits Program.
c) Automatic Eligibility for Program. The bill seems to
automatically deem eligible for UI benefits any unemployed
individual who files an UI claim during a period of
training or retraining. Since this drafting could be
interpreted to remove the ability of EDD to make
determinations of UI eligibility, which is understood to be
contrary to federal requirements, this provision of the
bill (Section 4 of the bill, page 4, lines 25 -33) is
recommended to be re-written as follows: An individual who
qualifies for UI and then applies for the retraining
benefits shall be deemed automatically eligible for the
California Training Benefits Program.
d) Eligibility for Program . The bill makes an unemployed
individual eligible for retraining benefits if he or she is
able to work and certifies on the UI claim form that he or
she is enrolled in a training program designed to increase
or improve their job skills and employability. In order to
comply with federal requirements, it is recommended that
Section 6 of the bill (page 6, lines 17 -23) be amended as
follows: Notwithstanding subdivision (c) of Section 1253,
an unemployed individual who initially qualifies for
unemployment insurance benefits is eligible to participate
in the California Training Benefits Program if he or she
certifies on the unemployment insurance claim form that he
or she is enrolled in a training program designed to
improve his or her job skills and a responsible person
connected with the training program certifies that the
individual is enrolled and satisfactorily pursuing the
training or retraining course of instruction.
e) Training Extensions . Existing law specifies the
conditions in which an unemployed person is entitled up to
an additional 26 weeks of retraining benefits. This bill
eliminates that portion of the law without replacing it
with other similar specific authority. Thus, it is
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recommended that Section 8 of the bill (page 6, lines 34 -
40, and page 7, lines 1 -2) be amended to state: Any
unemployed individual receiving unemployment compensation
benefits payable under this division, who applies for a
determination of eligibility for the California Training
Benefits Program and requires a training extension in order
to complete the training, is entitled to a training
extension on his or her unemployment compensation claim.
REGISTERED SUPPORT / OPPOSITION :
Support
California Workforce Association (Sponsor)
Opposition
California Chamber of Commerce
California Manufacturers and Technology Association
Analysis Prepared by : Manny Hernandez / INS. / (916)
319-2086.