BILL ANALYSIS
Senate Committee on Labor and Industrial Relations
Mark DeSaulnier, Chair
Date of Hearing: March 24, 2010 2009-2010 Regular
Session
Consultant: Alma Perez Fiscal:Yes
Urgency: No
Bill No: SB 968
Author: Negrete McLeod
Version: As amended March 8, 2010
SUBJECT
Unemployment insurance: retraining benefits.
KEY ISSUE
Should unemployed individuals who are receiving Unemployment
Insurance (UI) benefits be automatically eligible to receive
training benefits as long as they certify that they have
enrolled in a training program?
PURPOSE
To make changes to the current eligibility and determination
requirements necessary for approval to participate in the
California Training Benefits program.
ANALYSIS
Existing law establishes the Unemployment Insurance (UI) program
administered by the Employment Development Department (EDD).
The UI program is a federal-state program that provides weekly
unemployment insurance 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 in wages paid to each employee in a calendar year. The
benefits range from $40 to $450 per week depending upon earnings
during a 12-month base period.
To be eligible for unemployment insurance benefits an applicant
must meet specific eligibility requirements that include:
Having received enough wages during the base period to
establish a claim;
Being totally or partially unemployed;
Being unemployed through no fault of his/her own;
Being physically able to work, be seeking work, and be
immediately available to accept work;
Meeting eligibility requirements for each week benefits
are claimed; and
Being approved for training before training benefits are
paid.
Existing law, until January 1, 2015, provides for retraining
benefits to eligible individuals pursuant to the federal Trade
Act of 1974, as amended by the federal Trade Act of 2002.
Existing law authorizes an unemployed individual who files a
claim for unemployment compensation benefits or extended
duration benefits, or an application for federal-state extended
benefits or any federally funded unemployment compensation
benefits, to apply to the EDD for benefits during a period of
training or retraining through the California Training Benefit
(CTB) program. The CTB program allows eligible UI claimants to
receive their UI benefits, which might not otherwise be allowed,
while attending a training or retraining program approved by the
EDD. Claimants attending an approved training course are not
required to look for work, be available for work or accept work
while in training.
Under the required application process , the EDD schedules a
phone interview with the applicant to determine his/her
eligibility for CTB after the training has begun. The EDD is
prohibited from pre-determining CTB eligibility until the
individual has started to attend school or training.
Training can be approved if it meets the following criteria:
Authorized training provided by a special
government program such as:
o Workforce Investment Act (WIA)
o Employment Training Panel (ETP)
o Trade Adjustment Assistance (TAA)
o California Work Opportunity and
Responsibility to Kids (CalWORKs)
Hearing Date: March 24, 2010 SB 968
Consultant: Alma Perez Page 2
Senate Committee on Labor and Industrial Relations
Other training not authorized by one of the
above programs but determined by EDD to be eligible.
Among other things, the selected training must be
full-time and must be completed in one year from the
beginning date of CTB approval, even if the UI
benefits expire before the conclusion of the training.
This Bill would make changes to the current application and
approval requirements to receive training and retraining
benefits and would instead specify that an unemployed individual
shall be eligible for these benefits regardless of whether the
individual applies to the EDD for a determination of potential
eligibility.
Specifically, this bill would specify that an unemployed
individual receiving UI benefits:
Is eligible to receive training or retraining benefits
if he/she certifies on the claim form that he/she is
enrolled in a training program designed to increase or
improve his/her job skills and employability.
Is entitled to a training extension on his or her
unemployment compensation claim if it is necessary to
complete the approved training, without having to apply for
and wait for a decision on an extension.
And who meets specified criteria, is eligible to receive
training or retraining benefits without the director of EDD
having to determine that such criteria is met.
In addition, this bill would require the EDD to publicize and
promote the benefits available to UI recipients for training and
retraining on its Internet Web site.
COMMENTS
1. Need for this bill?
Hearing Date: March 24, 2010 SB 968
Consultant: Alma Perez Page 3
Senate Committee on Labor and Industrial Relations
According to EDD, 19,868 individuals were approved to
participate in the CTB program in calendar year 2009. Also
during 2009, the number of individuals receiving UI benefits
each month ranged from 947,753 (January 2009) to a high of
over 1.4 million (December 2009).
California's unemployment rate is currently at 12.5% and there
are over 1.4 million individuals collecting unemployment
insurance benefits. Based on this data, EDD estimates that in
any given month the number of individuals receiving UI
benefits and who are approved to participate in the CTB
program ranges from 1.4 percent to 2.0 percent of the total
number of individuals receiving UI benefits.
Concerns have been raised regarding the delays in the current
application and determination process that EDD follows when
approving an unemployed individual for CTB benefits. EDD is
prohibited from pre-determining CTB eligibility until the
individual has started to attend school or training, and thus,
if an individual enrolls in a training program that may hinder
that person's availability to work, EDD suspends their UI
benefits until a telephone interview takes place to confirm
eligibility. With this bill, the author seeks to streamline
the process by which eligible Californians receive CTB
benefits by specifying that an unemployed individual who is
able to work is eligible to receive training and retraining
benefits if he/she certifies on the claim form for benefits
that he/she is enrolled in a training program designed to
increase or improve his/her job skills and employability.
Recent amendments to the bill repealed code section 1269 of
the Unemployment Insurance Code which specifies criteria for
eligibility that the unemployed individual must meet for CTB
approval, in addition to specific information on the training
programs that qualify. Instead, this bill would specify that
an unemployed individual is eligible to receive benefits as
long as he/she certifies that he/she is enrolled in training.
According to the author, these amendments reflect early
negotiations with stakeholders and are an important starting
point to ensure that all eligible claimants receive benefits
on time. The author understands the need for an eligibility
verification process and will continue to work on language
Hearing Date: March 24, 2010 SB 968
Consultant: Alma Perez Page 4
Senate Committee on Labor and Industrial Relations
that will both streamline that process but also protect the
program from potential fraud.
2. EDD's CTB Streamline Approval Project :
EDD has been working to develop a process that will streamline
and expedite the approval process for the CTB program once UI
claimants have actually begun training. According to EDD, all
UI benefit eligibility issues must be adjudicated by trained
UI staff and the process involves sending claimants a required
written due process notice followed by a telephone eligibility
interview with the claimants, employers, and other third
parties that may be involved in any type of eligibility issue.
EDD's CTB streamline solution seeks to eliminate the need for
UI claimants attending training to wait for a telephone
interview to receive approval for CTB because eligibility can
be determined as soon as EDD receives training verification
from the program authorizing training or the training
provider. The solution will allow for the agencies to submit
via fax the training information necessary to confirm
enrollment in an authorized training program. For the
authorizing programs and training providers, the streamline
solution will also reduce disruptions by eliminating the need
for EDD staff to call these entities to gather and verify the
training information necessary for CTB approvals.
The CTB Streamline solution is planned for release in two
phases. The first phase will focus on claimants whose
training is authorized under certain federal or State programs
under California UI law, including training under the
Workforce Investment Act (WIA), the Federal Trade Adjustment
Assistance (TAA), the State Employment Training Panel (ETP),
and the State California Work Opportunity and Responsibility
to Kids (CalWORKs). Phase II will include all other UI
claimants attending full-time school or training outside of
the designated federal and State programs and whose CTB
eligibility is dependent on meeting additional specific
criteria required by UI law for CTB approval.
In March 2010, EDD began implementation of Phase I by
streamlining the approval process for claimants whose training
is authorized under the WIA. EDD is next working towards
Hearing Date: March 24, 2010 SB 968
Consultant: Alma Perez Page 5
Senate Committee on Labor and Industrial Relations
implement the streamline approval project for TAA, ETP and
CalWORKSs authorized trainings.
3. Proponent Arguments :
According to proponents, California is facing a job loss
crisis with unemployment at historic highs. One of the
benefits available to the unemployed is the CTB program that
allows those receiving UI compensation to participate in an
"approved" training program, however, proponents argue that
the definition of "approved" training has limited the number
of training programs that individuals can attend and has made
it difficult for UI recipients to qualify for the CTB program.
The author argues that despite the availability of benefits,
including the recent injection of funds from the American
Recovery and Reinvestment Act (ARRA), the department's
inefficient internal operations and its inability to determine
eligibility in a timely manner has caused significant delays
in assistance for displaced workers. Proponents believe that
this bill removes barriers so that unemployed individuals can
get the training they need without losing the benefits that
keep them afloat.
In addition, proponents argue that the U.S. Department of
Labor issued two guidance letters in 2009 strongly encouraging
states to review and revise their policies and procedures on
approved training programs for the unemployed that included,
among other things, to widen the types of training that
qualify as "approved training" and to streamline the approval
process in order for applicants to access training programs
without losing their benefits. Proponents argue that this
bill would conform California's Unemployment Insurance code to
these federal guidelines by revising current eligibility
provisions.
Lastly, the author argues that due to current law and EDD
practices, the CTB program is underutilized and many displaced
workers are not fully aware of their benefits. This bill
would also require EDD to disseminate information about
training benefits on-line in order to increase the ability of
UI recipients to learn about and access training to prepare
them for an economic recovery.
Hearing Date: March 24, 2010 SB 968
Consultant: Alma Perez Page 6
Senate Committee on Labor and Industrial Relations
4. Opponent Arguments :
According to opponents, although they support benefits being
paid timely to individuals enrolled in training with a
connection to employment upon completion, they are opposed to
this bill unless it is amended because it would broadly expand
unemployment insurance benefits for enrollment in any training
or education.
Opponents argue that current law allows unemployed workers
receiving UI benefits to continue their coverage while
enrolled in specified training or retraining as approved by
the Director of EDD. They argue that current law clearly and
appropriately sets out reasonable criteria for eligible
enrollment in job training, and argue that expanding
eligibility for benefits during training, as the bill seeks to
do, would create a far more expansive public policy than what
they believe is the intent of the UI program. Opponents argue
that this bill reaches further beyond timely delivery of
benefits and proposes to automatically approve enrollment in
all training and retraining programs when the individual
merely certified that training is "designed to increase or
improve his or her job skills and employability." Opponents
argue that without specificity and verifiable standards, this
certification process opens the door to not only fraud and
abuse, but also establishes a very different public policy.
5. Related Legislation :
AB 2058 (Block) of 2010: Currently in Assembly Insurance
Committee
AB 2058 is very similar to this bill; however, AB 2058 would
deem a UI recipient to be automatically eligible for benefits
during a period of training or retraining. In addition, AB
2058 would require that if the director determines that the
average state unemployment rate, as specified, equals or
exceeds 8.5%, recipients of unemployment compensation benefits
are also eligible to participate in training or retraining
programs.
Hearing Date: March 24, 2010 SB 968
Consultant: Alma Perez Page 7
Senate Committee on Labor and Industrial Relations
SUPPORT
California Labor Federation, AFL-CIO
California Workforce Association (CWA)
OPPOSITION
California Chamber of Commerce [oppose unless amended]
California Manufacturers and Technology Association [oppose
unless amended]
* * *
Hearing Date: March 24, 2010 SB 968
Consultant: Alma Perez Page 8
Senate Committee on Labor and Industrial Relations