BILL ANALYSIS �
AB 615
Page 1
Date of Hearing: May 15, 2013
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
AB 615 (Bocanegra) - As Amended: April 25, 2013
Policy Committee: InsuranceVote:9 -
4
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill allows employees of government and non-profit
educational institutions who are not in an instructional or
administrative role to collect unemployment insurance (UI)
compensation benefits between school years.
FISCAL EFFECT
1)There are approximately 250,000 non-certificated, classified
employees throughout the state. If 10% of those employees
received 10 weeks of UI during summer vacation each year, it
would cost approximately $75 million (School Employees Fund).
2)The increased costs in UI for these workers would likely
increase the quarterly Local Experience Charge paid by the
school districts. It is unknown how much those costs would
increase, but it could easily exceed millions of dollars
throughout all the school districts across the state.
COMMENTS
1)Rationale . According to the author, thousands of school
employees find the months between academic years to be a
stressful period financially. Existing law prohibits certain
education employees, those who are not teachers, researchers,
or administrators, from receiving benefits during months in
which school is not in session, unless they meet very specific
criteria. Unfortunately, many school employees rely on summer
school to maintain a reliable income source. Since 2007,
however, budget cuts have led to the elimination of summer
school in many districts, leaving tens of thousands of
AB 615
Page 2
education employees without a steady income or access to
unemployment insurance benefits. This bill would allow those
employees to receive unemployment insurance during the summer
break between school years.
2)Federal Law . Federal law generally requires equal treatment
for the payment of UI benefits to certain nonprofit
organizations, Indian tribes, and state and local government
workers in the same amount, on the same terms, and subject to
the same conditions, as other workers subject to state law. An
exception to the equal treatment requirement pertains to the
denial of UI for professional and nonprofessional employees of
educational institutions during a period between or within
academic years or terms when there is a contract or reasonable
assurance that the employee will go back to work in the same
or similar capacity in the ensuing academic year or term.
States must deny UI benefits to professional school employees
between and within the academic years or terms when a contract
or reasonable assurance exists. However, states have the
option of providing UI benefits to nonprofessional school
employees between and within the academic years or terms when
a contract or reasonable assurance exists.
3)School Employees Fund (SEF) . Public school employers, K-12 and
community colleges may elect to participate in the School
Employees Fund, which is a joint, pooled-risk fund
administered by the Employment Development Department, which
collects quarterly contributions based upon a percentage of
total wages paid by public schools and community college
districts. Employers who participate in the SEF may also have
to pay an additional quarterly Local Experience Charge if they
have higher UI costs charged to their individual accounts.
There are 72 community college districts and 1,309 county
offices of education, public school districts, and charter
schools that participate in the SEF who receive their revenue
from state and local funds. Contributions deposited in the
School Employees Fund are used to reimburse the UI Trust Fund
for the cost of UI benefits paid to former employees. The SEF
has a projected fund balance of over $550 million at the end
of the 2012-13 fiscal year.
Analysis Prepared by : Julie Salley-Gray / APPR. / (916)
319-2081
AB 615
Page 3