BILL ANALYSIS �
AB 1638
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Date of Hearing: May 7, 2014
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
AB 1638 (Bocanegra) - As Amended: April 21, 2014
Policy Committee: InsuranceVote:9-3
Urgency: No State Mandated Local Program:
No Reimbursable: No
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, regardless of
whether they have a reasonable assurance of employment.
FISCAL EFFECT
1)There are approximately 250,000 non-certificated, classified
employees throughout the state. If 60% of those employees
received 8 weeks of UI during summer vacation each year, it
would cost approximately $360 million (School Employees Fund).
Costs to the School Employees Fund are funded by school
districts, county offices of education, community college
districts, and charter schools, whose employees receive UI
benefits through this fund instead of through the UI Trust
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 increased costs 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
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which school is not in session, unless they meet very specific
criteria. 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 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 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.
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 had a projected fund balance
of $363 million at the end of the 2013-13 fiscal year.
4)Previous Legislation . AB 615 (Bocanegra) of 2013 is nearly
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identical to this bill, and was held on the Suspense File of
this committee.
Analysis Prepared by : Lisa Murawski / APPR. / (916) 319-2081