Amended in Assembly April 1, 2014

California Legislature—2013–14 Regular Session

Assembly Bill No. 1792

Introduced by Assembly Member Gomez

February 18, 2014

An act to begin delete amend Section 1088.5 of the Unemployment Insurance Code, relating to unemployment insurance, and making an appropriation therefor end delete begin insert add Section 13084 to the Government Code, and to add Section 2110.9 to, and to add Division 11 (commencing with Section 19000) to, the Unemployment Insurance Code, relating to public benefits end insert .

LEGISLATIVE COUNSEL’S DIGEST

AB 1792, as amended, Gomez. begin delete Unemployment contributions: end delete begin insert Public benefits: end insert reports begin insert on employers end insert .

begin insert

Existing law establishes various health programs under which low-income persons are provided health care services. These programs include the Medi-Cal program, which is administered by the State Department of Health Care Services.

end insert begin insert

This bill would require the Employment Development Department to collaborate with the State Department of Health Care Services, the State Department of Social Services, and the State Department of Education to identify and compile a list of employers of a beneficiary in this state who is enrolled in the above-described public assistance programs. The bill would define an employer as an individual or type of organization that employs for wages or salary 25 or more persons to work in this state. The bill would require the Employment Development Department to provide this list to the Department of Finance and would require the Department of Finance to collaborate with the Employment Development Department to determine the total cost to the state of the benefits provided to each identified employer’s employees under each public assistance program and the total cost to the state of the aggregated benefits provided to each identified employer’s employees. The bill would require the Employment Development Department to prepare a report with this information and provide it to the Department of Finance.

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The bill would also require the Department of Finance to, after collaborating with the Employment Development Department, annually transmit to the Legislature and post on the department’s Internet Web site the report no later than April 15 of each year.

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The bill would provide that an employer who discharges or discriminates or retaliates against an employee who enrolls in a public assistance program, as defined, or refuses to hire a beneficiary of a public assistance program would be in violation of specified provisions subject to criminal penalty. By creating a new crime, this bill would impose a state-mandated local program.

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The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

end insert begin insert

This bill would provide that no reimbursement is required by this act for a specified reason.

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Existing law requires each employer to file with the Employment Development Department specified information on new employees. Existing law authorizes the department to assess a penalty of $24 for a failure to report the hiring of an employee, or $490 if the failure to report is the result of conspiracy between the employer and the employee not to supply the required report or to supply a false or incomplete report.

end delete begin delete

This bill would change these penalty amounts to $23 and $499, respectively. This bill would increase the amount of that penalty and thus, the moneys deposited into the Employment Development Department Contingent Fund, a continuously appropriated fund, thereby making an appropriation.

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Vote:  begin delete ²⁄₃ end delete begin insert majority end insert . Appropriation:  begin delete yes end delete begin insert no end insert . Fiscal committee: yes. State-mandated local program:  begin delete no end delete begin insert yes end insert .

The people of the State of California do enact as follows:

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begin insert SECTION 1. end insert   

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(a) The Legislature finds and declares all of the
following:

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(1) In 2013, California had the highest number of working poor
families in the country. More than one-third of the state’s working
families are low-income, making less than 200 percent of the
federal poverty line.

end insert begin insert

(2) When low wages and a lack of benefits leave workers unable
to make ends meet, they turn to public assistance programs for
health care, healthy food, and other basic necessities.

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(3) Employers that pay low wages and offer no benefits shift
the burden of keeping workers out of poverty onto taxpayers.

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(4) State public assistance programs are crucial to keeping
Californians out of deep poverty by providing income supports,
health care, and food.

end insert begin insert

(5) The increase in the numbers of the working poor stretches
the state safety net to the limit and burdens the state budget,
programs, and services.

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(6) The Legislature continues to address the issues of a living
wage and the availability of affordable health coverage while
developing sound budget and programmatic priorities.

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(7) To promote a deeper understanding of the causes and
sources of underemployment, poverty level wages, and the
economic impacts on Californians and the state budget, it is
appropriate for policymakers to possess a broader set of empirical
data with which to make informed decisions.

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(b) Therefore, it is the intent of the Legislature to do all of the
following:

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(1) Produce a report on employers that have employees enrolled
in public assistance programs and on the cost to the state of
providing those benefits.

end insert begin insert

(2) Use the report to analyze those employers that create the
greatest burden on the state by having the largest numbers of
workers enrolled in public assistance programs.

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(3) Develop policies to decrease the number of working poor
in California by increasing the quality of jobs and employment
opportunities for Californians.

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(4) Use the data contained within the report to promote sound
and reasonable policies to ensure that employers do not shift the
responsibility for providing health care and basic necessities for
their workers onto taxpayers through the use of the data contained
within the report to develop reasonable and sound policies.

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(5) Ensure that no worker is discriminated or retaliated against
for the reason of being enrolled in a public benefit program.

end insert

begin insert

begin insert SEC. 2. end insert   

end insert

begin insert Section 13084 is added to the end insert begin insert Government Code end insert begin insert , to
read: end insert

begin insert

begin insert 13084. end insert   

(a) The department shall, after collaborating with the
Employment Development Department, annually transmit to the
Legislature and post on the department’s Internet Web site no later
than April 15 of each year, the report described in Section 19001
of the Unemployment Insurance Code. The report shall be
submitted to the Legislature pursuant to Section 9795.

(b) The report shall remain available to the public on the
department’s Internet Web site for at least five years.

(c) Nothing in this section shall be construed to authorize an
employer to discourage or prevent an employee from enrolling or
continuing enrollment in a public benefit program while employed
nor to discriminate against an applicant for employment or
employee for applying to be or being enrolled in a public assistance
program.

(d) The department shall be permitted access to and be provided
data and information from other state agencies as required to
implement this section, to the extent not prohibited by state and
federal confidentiality statutes and regulations. The department
may enter into interagency agreements or adopt regulations as
are reasonably necessary to implement this section.

end insert

begin insert

begin insert SEC. 3. end insert   

end insert

begin insert Section 2110.9 is added to the end insert begin insert Unemployment
Insurance Code end insert begin insert , to read: end insert

begin insert

begin insert 2110.9. end insert   

(a) For purpose of this section, the following
definitions shall apply:

(1) “Beneficiary” shall have the same meaning as in Section
19000.

(2) “Employer” shall have the same meaning as in Section
19000.

(3) “Public assistance program” shall have the same meaning
as in Section 19000.

(b) An employer who discharges or in any manner discriminates
or retaliates against an employee who enrolls in a public assistance
program or refuses to hire a beneficiary for reason of being
enrolled in a public assistance program, is in violation of this
chapter.

end insert

begin insert

begin insert SEC. 4. end insert   

end insert

begin insert Division 11 (commencing with Section 19000) is added
to the end insert begin insert Unemployment Insurance Code end insert begin insert , to read: end insert

begin insert

 

Division  begin insert 11. end insert   Employers With Employees That
Receive Public Benefits

 

begin insert 19000. end insert   

For purposes of this division, the following definitions
shall apply:

(a) “Beneficiary” means an individual who is all of the
following:

(1) Enrolled in a public assistance program, unless the
individual is enrolled by reason of disability or being over 65 years
of age.

(2) Employed by an employer.

(b) “Department” means the State Department of Health Care
Services, the State Department of Social Services, and the State
Department of Education.

(c) (1)  Except as provided in paragraph (2) “employer” means
an individual or type of organization that employs for wages or
salary 25 or more persons to work in this state and includes all of
the members of a controlled group of corporations, as defined in
Section 1563(a) of the Internal Revenue Code, except that “more
than 50 percent” shall be substituted for “at least 80 percent”
each place it appears in Section 1563(a)(1) of the Internal Revenue
Code, and the determination shall be made without regard to
Sections 1563(a)(4) and 1563(e)(3)(C) of the Internal Revenue
Code.

(2) “Employer” does not include a state, city, county, city and
county, district, or any other governmental employer.

(d) “Public assistance program” means the Medi-Cal program
(Chapter 7 (commencing with Section 14000) of Part 3 of Division
9 of the Welfare and Institutions Code), CalFresh (Chapter 10
(commencing with Section 18900) of Part 6 of Division 9 of the
Welfare and Institutions Code), CalWORKS (Chapter 2
(commencing with Section 11200) of Part 3 of Division 9 of the
Welfare and Institutions Code), and the Women, Infants, and
Children program (Article 2 (commencing with Section 123275)
of Chapter 1 of Part 2 of Division 106 of the Health and Safety
Code).

begin insert 19001. end insert   

(a) The Employment Development Department shall,
to the extent not prohibited by state and federal confidentiality
and privacy statutes and regulations, collaborate with a department
to identify and compile a list of employers of a beneficiary in the
state, that includes all of the following:

(1) The employer’s name.

(2) The employer’s address, as filed with the Employment
Development Department.

(3) The total number of each employer’s employees who are
beneficiaries.

(b) The Employment Development Department shall provide
the list described in subdivision (a) to the Department of Finance.
The Department of Finance, in collaboration with the Employment
Development Department, shall determine both of the following:

(1) The total cost to the state of the benefits provided to each
identified employer’s employees under each public assistance
program.

(2) The total cost to the state of the aggregated benefits provided
to each identified employer’s employees.

(c) The Employment Development Department shall, to the
extent not prohibited by state and federal confidentiality and
privacy statutes and regulations, prepare and provide to the
Department of Finance a report that includes the information
described in subdivisions (b) and (c).

(d) The list and the report shall not include the names or any
identifying information of any individual beneficiary under a public
assistance program and shall be subject to all state and federal
confidentiality and privacy laws and regulations.

end insert

begin insert

begin insert SEC. 5. end insert   

end insert begin insert

No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of
the Government Code, or changes the definition of a crime within
the meaning of Section 6 of Article XIII B of the California
Constitution.

end insert

begin delete

SECTION 1.  

Section 1088.5 of the Unemployment Insurance
Code is amended to read:

1088.5.  

(a) In addition to information reported in accordance
with Section 1088, effective July 1, 1998, each employer shall file,
with the department, the information provided for in subdivision
(b) on new employees.

(b) Each employer shall report the hiring of any employee who
works in this state and to whom the employer anticipates paying
wages, and also shall report the hiring of any employee who
previously worked for the employer but had been separated from
that prior employment for at least 60 consecutive days.

(c) (1) This section shall not apply to any department, agency,
or instrumentality of the United States.

(2) State agency employers shall not be required to report
employees performing intelligence or counterintelligence functions,
if the head of the agency has determined that reporting pursuant
to this section would endanger the safety of the employee or
compromise an ongoing investigation or intelligence mission.

(d) (1) Employers shall submit a report as described in
paragraph (4) within 20 days of hiring any employee whom the
employer is required to report pursuant to this section.

(2) Notwithstanding subdivision (a), employers transmitting
reports magnetically or electronically shall submit the report by
two monthly transmissions not less than 12 days and not more
than 16 days apart.

(3) For purposes of this section, an employer that has employees
in two or more states and that transmits reports magnetically or
electronically may designate one state in which the employer has
employees to which the employer will transmit the report described
in paragraph (4). Any employer that transmits reports pursuant to
this paragraph shall notify the Secretary of Health and Human
Services in writing as to which state the employer designates for
the purpose of sending reports.

(4) The report shall contain the following:

(A) The name, address, and social security number of the
employees.

(B) The employer’s name, address, state employer identification
number (if one has been issued), and identifying number assigned
to the employer under Section 6109 of the Internal Revenue Code
of 1986.

(C) The first date the employee worked.

(5) Employers may report pursuant to this section by submitting
a copy of the employee’s W-4 form, a form provided by the
department, or any other hiring document transmitted by first-class
mail, magnetically, or electronically.

(e) For each failure to report the hiring of an employee, as
required and within the time required by this section, unless the
failure is due to good cause, the department may assess a penalty
of twenty-three dollars ($23), or four hundred ninety-nine dollars
($499) if the failure is the result of conspiracy between the
employer and employee not to supply the required report or to
supply a false or incomplete report.

(f) (1) On and after January 1, 2013, and before January 1,
2019, information collected pursuant to this section may be used
for the following purposes:

(A) Administration of this code, including, but not limited to,
providing employer or employee information to participating
members of the Joint Enforcement Strike Force on the
Underground Economy pursuant to Section 329 for the purposes
of auditing, investigating, and prosecuting violations of tax and
cash-pay reporting laws.

(B) Locating individuals for purposes of establishing paternity
and establishing, modifying, and enforcing child support
obligations.

(C) Administration of employment security and workers’
compensation programs.

(D) Providing employer or employee information to the
Franchise Tax Board and the State Board of Equalization for the
purpose of tax or fee enforcement.

(E) Verification of eligibility of applicants for, or recipients of,
the public assistance programs listed in Section 1320b-7(b) of Title
42 of the United States Code.

(F) Providing employer or employee information to the
Contractors’ State License Board and the State Compensation
Insurance Fund for the purpose of workers’ compensation payroll
reporting.

(G) Providing employer or employee information to the State
Department of Health Care Services, the California Health Benefit
Exchange, the Managed Risk Medical Insurance Board, and county
departments and agencies for the purpose of:

(i) Verifying or determining the eligibility of an applicant for,
or a recipient of, state health subsidy programs, limited to the
Medi-Cal program, provided pursuant to Chapter 7 (commencing
with Section 14000) of Part 3 of Division 9 of the Welfare and
Institutions Code, the Healthy Families Program, provided pursuant
to Part 6.2 (commencing with Section 12693) of Division 2 of the
Insurance Code, and the Access for Infants and Mothers Program,
provided pursuant to Part 6.3 (commencing with Section 12695)
of Division 2 of the Insurance Code, where the verification or
determination is directly connected with, and limited to, the
administration of the state health subsidy programs referenced in
this clause.

(ii) Verifying or determining the eligibility of an applicant for,
or a recipient of, federal subsidies offered through the California
Health Benefit Exchange, provided pursuant to Title 22
(commencing with Section 100500) of the Government Code,
including federal tax credits and cost-sharing assistance pursuant
to the federal Patient Protection and Affordable Care Act, (Public
Law 111-148), as amended by the federal Health Care and
Education Reconciliation Act of 2010 (Public Law 111-152), where
the verification or determination is directly connected with, and
limited to, the administration of the California Health Benefit
Exchange.

(iii) Verifying or determining the eligibility of employees and
employers for health coverage through the Small Business Health
Options Program, provided pursuant to Section 100502 of the
Government Code, where the verification or determination is
directly connected with, and limited to, the administration of the
Small Business Health Options Program.

(2) On and after January 1, 2019, information collected pursuant
to this section may be used for the following purposes:

(A) Administration of this code.

(B) Locating individuals for purposes of establishing paternity
and establishing, modifying, and enforcing child support
obligations.

(C) Administration of employment security and workers’
compensation programs.

(D) Providing employer or employee information to the
Franchise Tax Board and to the State Board of Equalization for
the purposes of tax or fee enforcement.

(E) Verification of eligibility of applicants for, or recipients of,
the public assistance programs listed in Section 1320b-7(b) of Title
42 of the United States Code.

(F) Providing employer or employee information to the State
Department of Health Care Services, the California Health Benefit
Exchange, the Managed Risk Medical Insurance Board, and county
departments and agencies for the purpose of:

(i) Verifying or determining the eligibility of an applicant for,
or a recipient of, state health subsidy programs, limited to the
Medi-Cal program, provided pursuant to Chapter 7 (commencing
with Section 14000) of Part 3 of Division 9 of the Welfare and
Institutions Code, the Healthy Families Program, provided pursuant
to Part 6.2 (commencing with Section 12693) of Division 2 of the
Insurance Code, and the Access for Infants and Mothers Program,
provided pursuant to Part 6.3 (commencing with Section 12695)
of Division 2 of the Insurance Code, where the verification or
determination is directly connected with, and limited to, the
administration of the state health subsidy programs referenced in
this clause.

(ii) Verifying or determining the eligibility of an applicant for,
or a recipient of, federal subsidies offered through the California
Health Benefit Exchange, provided pursuant to Title 22
(commencing with Section 100500) of the Government Code,
including federal tax credits and cost-sharing assistance pursuant
to the federal Patient Protection and Affordable Care Act, (Public
Law 111-148), as amended by the federal Health Care and
Education Reconciliation Act of 2010 (Public Law 111-152), where
the verification or determination is directly connected with, and
limited to, the administration of the California Health Benefit
Exchange.

(iii) Verifying or determining the eligibility of employees and
employers for health coverage through the Small Business Health
Options Program, provided pursuant to Section 100502 of the
Government Code, where the verification or determination is
directly connected with, and limited to, the administration of the
Small Business Health Options Program.

(g) For purposes of this section, “employer” includes a labor
union hiring hall.

(h) This section shall become operative on July 1, 1998.

end delete