BILL ANALYSIS
SB 968
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Date of Hearing: June 23, 2010
ASSEMBLY COMMITTEE ON INSURANCE
Jose Solorio, Chair
SB 968 (Negrete McLeod) - As Amended: April 26, 2010
SENATE VOTE : 22-11
SUBJECT : Unemployment insurance: training benefits
SUMMARY : Revises the requirements for participating in the
California Training Benefits (CTB) Program. 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)Provides that UI benefits shall not be denied to an otherwise
qualified unemployed worker because he or she applies for or
participates in approved training or retraining.
3)Specifies that an unemployed person who files a regular or
extended UI claim shall be eligible for UI benefits during a
period of training if one of the following applies:
a) The training is authorized by the federal Workforce
Investment Act, or other federally funded workforce
programs, by the federal Trade Act of 1974 as amended, or
by the state Employment Training Panel;
b) The person is a participant in the California Work
Opportunity and Responsibility to Kids (CalWORKS) Program
and has entered into a contract with the county welfare
department to participate in an education or training
program;
c) The training is a registered apprenticeship program
authorized by the Division of Apprenticeship Standards of
the state Department of Industrial Relations;
d) The person is a journey level union member and the
training or retraining course of instruction is
industry-related training necessary due to changes in
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technology, industry demands, or it is necessary to retain
employment or become more competitive in obtaining
employment;
e) The person is enrolled in a community college or other
public postsecondary program with the purpose of preparing
the applicant in academic or job skills that will increase
employment opportunities or that leads to a degree,
credential, or certificate;
f) The person is enrolled in any publicly-funded education
and training program, including remedial training that
improves the person's employability, with the primary
purpose of providing academic or job skills for employment.
4)Provides that an unemployed person who files a regular or
extended UI claim shall be eligible for benefits if all of the
following apply:
a) Work in the individual's usual occupation does not
exist, or the demand for that work has substantially
diminished, or the person's skills are in need of upgrading
due to technological or other advances;
b) The training program is approved or accredited by the
Division of Apprenticeship Standards of the Department of
Industrial Relations, an institution recognized by the
federal Department of Education, the State Department of
Education, the Chancellor's Office of the California
Community Colleges, or the Bureau for Private Postsecondary
Education;
c) The training or retraining course of instruction relates
to an occupation for which there are reasonable employment
and career advancement opportunities.
5)Eliminates provisions of law that require a person to be
unemployed for four or more weeks, that the person be
reasonably expected to complete the training successfully, and
that the beginning date of training is more than three years
after the beginning date of training last approved for the
person, in order to be eligible for California Training
Benefits.
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6)Provides that an unemployed person who is able to work is
eligible to receive California Training Benefits if both of
the following conditions are met:
a) He or she certifies on the UI claim form that he or she
is enrolled in a training program described by this bill.
b) A responsible person connected with the training
program, including a one-stop counselor, training program
director, instructor, or community college counselor,
certifies that the person is enrolled in and satisfactorily
pursuing the training course of instruction.
7)Eliminates the requirement that an unemployed person must
apply for California Training Benefits within 16 weeks of
receiving these benefits, in order to become eligible for a
training extension of up to 26 additional weeks of UI
benefits.
8)Requires EDD to publicize and promote the benefits of the
California Training Benefits Program on its Internet website.
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,
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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
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
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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.
8)Requires the training extension of UI benefits to be charged
to the employer reserve accounts.
9)Limits access to retraining benefits to instances when the EDD
Director finds that the person is potentially eligible for
retraining benefits or a training extension of UI benefits,
and 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.
FISCAL EFFECT : According to the Senate Appropriations
Committee analysis, this bill is expected to result in unknown,
multi-million dollar costs annually for the expansion of
training benefits. That analysis also states that there would
be unknown, likely significant savings annually to EDD
administration costs.
COMMENTS :
1)Purpose. The purpose of this bill is to simplify the approval
process for the California Training Benefits Program and to
expand the number of training programs that do not require
approval by the EDD Director. The bill also allows the EDD
Director to determine eligibility if the training program is
not specifically authorized.
2)Background. This bill affects "Retraining Benefits" (as
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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.
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.
In many instances, 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 applicants 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 recent weeks, EDD has started to phase-in
some streamlining steps if the applicant is participating in a
training program authorized by the federal Workforce
Investment Act or other selected laws.
In May of 2010, 2.3 million people were unemployed in
California constituting a 12.4% unemployment rate. This is an
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unprecedented number of displaced workers in California and
results in a very large number of UI claims to process. In
2009, EDD processed 6.5 million initial UI claims, or almost
double the claim load of 2008 (3.8 million). In May 2010, 1.5
million people received either regular or extended UI
benefits. In 2009, 64,209 people applied for California
Training Benefits and 20,366 people were found eligible for
these benefits.
3)Arguments in support. The author states that due to current
law and the EDD practices, the CTB program is underutilized,
and many displaced workers are not fully aware of these
benefits. Current law results in payment delays to displaced
workers who are enrolled in approved training programs. With
a recent injection of funds from the American Recovery and
Reinvestment Act (ARRA), participants in the state's UI
program have more options to receive education and training
that will help to put them back to work.
The California Workforce Association states that the present CTB
determination process causes people to choose not to
participate in training as they will have their UI benefits
suspended for a period of time. This suspension of UI
benefits is in direct contradiction to federal guidance.
The California Labor Federation states that streamlining the
process for determining eligibility of UI recipients for
training benefits will reduce the costs to EDD and allow the
EDD staff to redirect their attention to reviewing
applications and serving the millions of Californians
currently out of work. The California Professional
Firefighters state that this bill will make it easier for
unemployed people to access UI benefits while enrolled in
training programs to upgrade their job skills and increase
their employability.
This bill is needed to help EDD process claims and distribute
benefits in a more effective manner to ensure that our
workforce is prepared to fill the labor needs as California
emerges from this recession.
4)Arguments in opposition. The California Chamber of Commerce
and the California Manufacturers and Technology Association
state this bill reaches beyond the timely delivery of benefits
and proposes to automatically approve enrollment in all
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training and retraining when the individual merely certifies
that the training is "designed to increase or improve his or
her job skills and employability." According to these groups,
this process can open the door to abuse, and would allow
individuals who are unemployed to take this opportunity to use
their UI benefits to make lifestyle changes without a
connection to a job.
5)Similar legislation. AB 2058 (Block) of this legislative
Session proposes to modify the requirements for participating
in the California Training Benefits Program in order to ease
the transition of unemployed people into new careers. AB 2058
has been approved by the Assembly on a vote of 58-19, and is
set for hearing in the Senate Labor and Industrial Relations
Committee on June 23, 2010.
REGISTERED SUPPORT / OPPOSITION :
Support
California Labor Federation, AFL-CIO
California Professional Firefighters
California State Employees Association
California Workforce Association
Opposition
California Chamber of Commerce
California Manufacturers and Technology Association
Analysis Prepared by : Manny Hernandez / INS. / (916) 319-2086