BILL ANALYSIS
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VETO
Bill No: SB 1472
Author: Leno (D)
Amended: 4/20/10
Vote: 21
SENATE LAB. & INDUS. RELATIONS COMMITTEE : 5-1, 3/24/10
AYES: DeSaulnier, Wyland, Ducheny, Leno, Yee
NOES: Hollingsworth
SENATE APPROPRIATIONS COMMITTEE : 7-2, 4/26/10
AYES: Kehoe, Alquist, Corbett, Leno, Price, Wolk, Yee
NOES: Cox, Denham
NO VOTE RECORDED: Walters, Wyland
SENATE FLOOR : 23-9, 5/27/10
AYES: Alquist, Calderon, Cedillo, Corbett, DeSaulnier,
Ducheny, Florez, Hancock, Kehoe, Leno, Liu, Lowenthal,
Negrete McLeod, Padilla, Pavley, Price, Romero, Simitian,
Steinberg, Wolk, Wright, Wyland, Yee
NOES: Ashburn, Cogdill, Denham, Dutton, Hollingsworth,
Huff, Runner, Strickland, Walters
NO VOTE RECORDED: Aanestad, Correa, Cox, Harman, Oropeza,
Wiggins, Vacancy, Vacancy
ASSEMBLY FLOOR : 78-0, 8/12/10 (Consent) - See last page
for vote
SUBJECT : Unemployment insurance: shared work
SOURCE : Author
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DIGEST : This bill requires the Employment Development
Department to develop and implement an outreach plan to
inform employers in California of the Shared Work program.
ANALYSIS :
Existing law
1. 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.
2. Permits the payment of a reduced amount of UI benefits
to individuals whose employer participates in the Work
Sharing Unemployment Insurance program. California's
Work Sharing program was created in 1978 and was the
first program of its kind in the nation. This program
allows for the payment of benefits to individuals whose
normal weekly hours of work for the regular employer are
reduced, in lieu of layoff, and results in a reduction
in wages of at least 10 percent. Employers seeking
approval to participate in the Work Sharing program must
have a minimum of two employees, comprising at least 10
percent of the employer's regular workforce or a unit of
the workforce, that will be affected by a reduction in
wages and hours worked.
3. Requires the application from an employer for approval
of participation in the program to include a brief
description of the circumstances requiring the use of
work sharing to avoid layoff. A plan approved by the
director of EDD shall expire six months after the
effective date of the plan. EDD is authorized to
terminate a shared work plan for good cause if the plan
is not being carried out according to its terms and
intent.
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This bill requires EDD to develop and implement an outreach
plan designed to provide information and inform employers
in California of the Shared Work program.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
According to the Senate Appropriations Committee analysis:
Fiscal Impact (in thousands)
Major Provisions 2010-11 2011-12 2012-13
Fund
Expansion of WorkMinor, likely absorbable costs ongoing
Special*
Sharing program
*Unemployment Administration Fund
SUPPORT : (Verified 4/27/10)
California Labor Federation, AFL-CIO
National Federation of Independent Business
ARGUMENTS IN SUPPORT : According to proponents, as
California's small businesses continue to face the most
significant economic recession in more than 50 years, they
are often forced to make the difficult decision to layoff
valued employees as a last resort when faced with expenses
that exceed revenue. Proponents argue that laying off
employees in a recession, while necessary at the time,
creates a potential delay in a business' recovery when
product demand returns as the employer hires and trains new
employees. Therefore, proponents believe that the EDD
needs a more aggressive outreach plan for the existing
California Work Share program and needs to establish a data
collection process for accurate tracking and reporting.
Proponents argue that through this program, employers can
retain highly trained employees, workers are assisted
financially, and the costs to the UI fund are reduced when
a worker is not relying entirely upon unemployment
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benefits. According to proponents, after the state of New
York heavily marketed a version of this program last year,
businesses using Shared Work increased 557 percent and a
greater number of workers needed only partial unemployment
benefits. Proponents believe that expanding the use of
work-shared in California could help stop the state's sky
rocketing unemployment rates and ease economic hardship for
thousands of workers.
GOVERNOR'S VETO MESSAGE :
"I am returning Senate Bill 1472 without my
signature.
This bill would duplicate existing efforts of the
Employment Development Department by requiring
additional marketing of the Work Sharing Program.
This program has already experienced a significant
increase in participation by California employers as
a means to retain an experienced workforce during
this severe recession. Therefore, this bill is
unnecessary at this time."
ASSEMBLY FLOOR :
AYES: Adams, Ammiano, Anderson, Arambula, Bass, Beall, Bill
Berryhill, Tom Berryhill, Blakeslee, Block, Blumenfield,
Bradford, Brownley, Buchanan, Caballero, Charles
Calderon, Carter, Chesbro, Conway, Cook, Coto, Davis, De
La Torre, De Leon, DeVore, Eng, Evans, Feuer, Fletcher,
Fong, Fuentes, Fuller, Furutani, Gaines, Galgiani,
Garrick, Gatto, Gilmore, Hagman, Hall, Harkey, Hayashi,
Hernandez, Hill, Huber, Huffman, Jeffries, Jones, Knight,
Lieu, Logue, Bonnie Lowenthal, Ma, Mendoza, Miller,
Monning, Nava, Nestande, Niello, Nielsen, V. Manuel
Perez, Portantino, Ruskin, Salas, Saldana, Silva,
Skinner, Smyth, Solorio, Audra Strickland, Swanson,
Torlakson, Torres, Torrico, Tran, Villines, Yamada, John
A. Perez
NO VOTE RECORDED: Norby, Vacancy
PQ:do 10/5/10 Senate Floor Analyses
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SUPPORT/OPPOSITION: SEE ABOVE
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