BILL ANALYSIS �
Senate Committee on Labor and Industrial Relations
Senator Ben Hueso, Chair
Date of Hearing: June 11, 2014 2013-2014 Regular
Session
Consultant: Alma Perez-Schwab Fiscal:Yes
Urgency: No
Bill No: AB 1556
Author: Perea
As Introduced/Amended: June 4, 2014
SUBJECT
Unemployment insurance
KEY ISSUES
Should the Legislature require that the Employment Development
Department (EDD) translate key documents and publications,
including online website content, regarding the Unemployment
Insurance (UI) and State Disability Insurance (SDI) programs
into the seven most commonly used languages?
Should the Legislature require periodic review of the UI program
to identify any policies and practices which could be resulting
in delayed benefit payments or increased workload?
ANALYSIS
Existing law provides for the payment of unemployment
compensation benefits through the Unemployment Insurance (UI)
program, administered by the Employment Development Department
(EDD), which is a federal-state program that provides weekly
unemployment insurance payments to eligible workers who lose
their jobs through no fault of their own.
Under existing law , an individual is eligible for UI benefits if
he/she meets the following:
(Unemployment Insurance Code �1253 et al)
Has received enough wages during the base period to
establish a claim.
Is totally or partially unemployed.
Is unemployed through no fault of his/her own.
Is physically able to work.
Is available for work, meaning ready and willing to
immediately accept work.
Is actively looking for work.
Is approved for training before training benefits are
paid.
Existing law authorizes an unemployed individual who files a
claim for UI benefits or extended duration benefits, to apply to
the EDD for a determination of potential eligibility for
benefits during a period of training or retraining through the
California Training Benefit (CTB) program. The CTB program
allows eligible claimants to receive their UI benefits while
attending training or retraining programs approved by EDD.
Claimants attending an approved training course are not required
to look for work, be available for work or accept work while in
training. (Unemployment Insurance Code �1268)
Existing law authorizes an automatic eligibility determination
for UI benefits to continue during a training program if it
falls within the following (Unemployment Insurance Code�1269):
a. The training is authorized by the federal Workforce
Investment Act of 1998 or by the Employment Training Panel.
b. The training is authorized by the federal Trade Act of
1974.
c. The individual is a participant of the California WORKs
program.
d. The individual is a participant in training with a
provider that is certified and on the Eligible Training
Provider List (ETPL).
e. The individual is a journey level union member and the
training/retraining course of instruction is
industry-related training necessary due to changes in
technology, or industry demands, or is necessary to retain
employment.
Existing law requires EDD to publish informational material
regarding the Unemployment Insurance Code and its programs in
English and Spanish. (Unemployment Insurance Code �316)
Hearing Date: June 11, 2014 AB 1556
Consultant: Alma Perez-Schwab Page 2
Senate Committee on Labor and Industrial Relations
This Bill would make a number of reforms to the policies and
practices in the administration of the Unemployment Insurance
program. Specifically, this bill would:
1) Require EDD to translate key documents and publications
for both the UI program and State Disability Insurance
(SDI) program into the seven most commonly used languages
among participants in each program.
2) Require EDD to translate website content providing
information regarding the process of applying for and
receiving UI benefits into the seven additional languages
most commonly used by applicants/claimants.
3) Require the director of EDD to periodically review the
UI program to identify policies and practices which result
in delayed benefit payments, increased EDD workload, and
provide little or no value in identifying or preventing
fraud or abuse in the program.
a. The director shall report to the Legislature
the results of the first review on or before July 1,
2015.
4) Prohibit the EDD from automatically scheduling an
individual for a redetermination of eligibility (and
halting benefit payments) for any week in which he/she is
participating in a training or education program and has
notified EDD of such program.
a. However, if EDD determines that commencement
of, or ongoing participation in, this training or
education program conflicts with eligibility
requirements for UI benefits, the department may
schedule and conduct a determination of eligibility.
5) Require claimants to submit a claim for continued
benefits within 14 days of the end of the last week for
which he/she received benefits. However, the bill
prohibits the director of EDD from automatically halting
the payment of benefits and requiring a redetermination of
eligibility until a claim certification form is more than
Hearing Date: June 11, 2014 AB 1556
Consultant: Alma Perez-Schwab Page 3
Senate Committee on Labor and Industrial Relations
21 days late.
COMMENTS
1. Background: Applying for UI Benefits
Eligibility for Unemployment Insurance benefits require a
person to be physically able to work, available to work, and
actively looking for work each week that benefits are claimed.
An individual must complete a claim form every two weeks,
sign and date the form and return it to the Employment
Development Department for payment. If the information on the
form shows that the individual did not meet eligibility
requirements, including participation in a training or
education program that prevents the individual from being
ready and able to work, the department may reduce or deny
benefits. However, claimants attending a training course
approved under the California Training Benefits Program are
not required to look for work, be available for work, or
accept work while in training.
2. Need for this bill?
On November 6th, 2013 the Assembly Insurance Committee held an
oversight hearing to address some of the issues with the
rollout of the new Unemployment Insurance (UI) program
computer system. According to the author, current practices
within EDD and an unsuccessful rollout of a new UI computer
system unfortunately led to thousands of Californian's having
their UI benefits delayed or denied through no fault of their
own. Recommendations were made at the hearing to help improve
the program and a follow up letter with 5 specific action
items was sent to the EDD. Since the letter, EDD has made
changes to their current policies to improve the system,
however; they are not reflected in statute. This bill seeks to
ensure those policy changes EDD made are reflected in statute,
and requires EDD to improve the overall efficiency of the UI
program.
Hearing Date: June 11, 2014 AB 1556
Consultant: Alma Perez-Schwab Page 4
Senate Committee on Labor and Industrial Relations
3. Proponent Arguments :
According to proponents, during the most recent recession, UI
kept many distressed communities functioning while local job
markets collapsed and many small businesses struggled to
survive sharp reductions in consumer demand. However, they
argue, in recent years the program has struggled to meet the
needs of the unemployed. The vast majority of calls seeking
UI assistance fail to reach an operator, most denials and
modifications that reach second-level appeals are overturned
in favor of the worker, and IT failures have delayed or denied
benefits for hundreds of thousands of claimants. Proponents
argue that while this inability to adequately handle demand
remains primarily an issue of funding, system inefficiencies
and basic process problems have also played a role.
Proponents contend that this bill will address the most
immediate of these systematic problems by improving
translation of UI information, requiring a review of
eligibility determination practices, clarify existing
standards for workers enrolled in training programs, and
extend a grace period for workers seeking to continue their
claim. With these reforms in place, they argue, we can begin
making serious progress towards improving outcomes for
California's unemployed workers.
4. Opponent Arguments :
According to opponents, California currently remains in debt
to the federal unemployment insurance trust fund by almost $10
billion; therefore, the state is at risk of incurring the
Benefit Cost Rate (BCR) add-on. This tax increase is now an
issue for 16 states that have had 5 or more years during which
they had outstanding UI loan balances. Opponents argue that
the way BCR is calculated, it would result in an estimated 2
percent increase in employer's federal UI tax. Federal
regulations require that there not be a "net decrease in
solvency" in the UI trust fund in order for a state to qualify
for a waiver of the BCR add-on. They argue that the net
decrease could be created by administrative, regulatory or
legislative action. Therefore, they believe this measure is
premature in light of pending rules from the federal
Hearing Date: June 11, 2014 AB 1556
Consultant: Alma Perez-Schwab Page 5
Senate Committee on Labor and Industrial Relations
Department of Labor regarding state requirements for waivers
of looming unemployment insurance tax hikes.
5. Prior Legislation :
AB 2058 (Block) of 2010: Chaptered
This bill modified the requirements for participating in the
state's retraining benefits program in order to allow
unemployed people to automatically continue receiving
unemployment insurance (UI) benefits while enrolled in a
training program on a full-time basis.
SUPPORT
Asian Americans Advancing Justice - Los Angeles
California Communities United Institute
California Labor Federation, AFL-CIO
California School Employees Association, AFL-CIO
Service Employees International Union Local 1000
OPPOSITION
Associated Builders and Contractors of California
California Business Roundtable
California Chamber of Commerce
California Farm Bureau Federation
California Grocers Association
California Manufactures and Technology Association
California Restaurant Association
California Retailers Association
California Taxpayers Association
Family Business Association
National Federation of Independent Business
Hearing Date: June 11, 2014 AB 1556
Consultant: Alma Perez-Schwab Page 6
Senate Committee on Labor and Industrial Relations