Striking California workers could earn unemployment checks pending approval from Gov. Newsom

Striking workers in California are one gubernatorial signature away from being able to apply for and receive state-funded aid after a last-minute push by lawmakers.

The California Senate voted 27-12 Thursday to vote with assembly amendments to Senate Bill 799, authored by Democratic Sen. Anthony Portantino of Burbank. Only workers who have been on strike for at least 14 days are eligible for unemployment benefits.

“Let’s remember – when someone goes on strike, it’s not a romantic thing. It’s hard for that family,” said Portantino during debate on the floor. “People have raised legitimate concerns about the fund itself. The impact on that fund would be very small relative to this bill, but the impact on the individual on strike would be significant.

It is unclear whether Newsom will sign the bill. The governor dodged the question at a Politico forum earlier this week, but noted his concerns about the nearly $18 billion in debt the unemployment fund currently carries.

“I haven’t read all of these bills,” Newsom said. “What I’m very aware of is the debt we’ve built up for the UI fund,” he continued. “I think one should be careful about that before entering into a conversation about expanding its use.”

The renewed effort to provide financial relief to strikers comes as tens of thousands of California workers, mostly in Los Angeles, walked off the job and walked the picket line during what some called a “hot labor summer.”

The nearly 13,000 screenwriters represented by the Writers Guild of America have been on strike since May 2. Hundreds of thousands of actors represented by SAG-AFTRA joined in solidarity in mid-July. Also in southern California, thousands of hotel workers walked out in early July, and the municipal employees of Los Angeles went on strike for a day in early August.

The bill is facing harsh criticism from business in general and the California Chamber of Commerce in particular. The lobby group has characterized the bill as a “job killer” and expressed concern about increased taxes on employers. CalChamber has said it would seek a veto from Newsom if the Legislature passed the bill.

Portantino told The Bee shortly after the vote that he hasn’t had a chance to talk to the governor about the bill and doesn’t yet have specific ideas for how to improve the unemployment fund. But he was happy that SB 799 started the conversation about reform.

“The positive consequence of 799 is that the focus on the fund became a priority,” he said. “I think there will be a lot of conversations between now and January.”

Legislators question the future of UI fund, availability of money

Republican senators spoke out in opposition to the bill, saying it turned unemployment insurance’s original intent on its head.

“I’m surprised we even have a bill of this size here in these chambers,” Republican Sen. Brian Dahle said of Bieber. “This is a horrible bill. This is a bad idea.”

California’s unemployment insurance system is primarily funded by payroll taxes that employers pay to the federal government. The amount is calculated by taking a certain percentage of the first $7,000 an employee earns in a calendar year. Committee analyzes noted that California is one of the few states that has not increased the base amount of wages eligible for unemployment insurance taxes.

Dahle argued that asking employers to fund unemployment benefits for workers who strike against them is an unthinkable demand for business owners. All eight Republicans voted against the measure, along with four Democrats.

Senators recognized the need to reform the finances of the fund.. An analysis by the labor committee of the Senate showed that the existing almost $ 18 billion in debt would balloon in more than $ 20 billion by the end of 2024.

The only other states with similar laws are New York and New Jersey. In New York, a worker must be on strike for 14 days before being eligible for unemployment benefits — down from seven weeks or a change passed in 2020. New Jersey enacted its law in 2018 and recently amended it to reduce the waiting period from 30 days up to 14 days.

“I do wish there was better data to understand this and how it will affect our UI fund, and to look and see how the models in New York and New Jersey work before we take this step take,” Democratic Sen. Josh Becker of Menlo Park said during the debate.

Becker noted that he spent the first two years in the legislature in the Joint Legislative Audit Committee investigating the bungling of the unemployment development of the Department of Unemployment during the pandemic.

“One thing is clear – we are in desperate need of unemployment reform, and I hope we start that conversation in earnest in the fall.”

Portantino said he is committed to working on a reform effort next year, but that the condition of the fund should not prevent the Legislature from helping striking workers in the meantime.

“This conversation about SB 799 has actually put the fund at the forefront of the conversation,” he said. “We are also going to do that part.”

One criticism from Republicans and business is that paying unemployment benefits to workers who go on strike would encourage them to quit their jobs. Republican Assemblyman Bill Essayli, of Corona, has argued that taxpayer dollars should not be used to pay people who have jobs but simply choose not to work them.

Senate Labor Committee analysts pointed out that the maximum unemployment insurance benefit a worker could receive is $450 a week.

“Given that the median weekly income of a Californian is about three times that amount, a worker is unlikely to be incentivized to strike simply because they can receive UI benefits,” the analysis read.

Lawmakers in both the Assembly and Senate also raised questions about the state’s ability to accurately administer the additional benefits. The Department of Employment Development, which operates the unemployment insurance program, came under heavy criticism during the COVID-19 pandemic for its mishandling of the massive increase in claims, many of which were fraudulent. Those missteps earned the department a classification as a “high risk agency” by the state auditor last month.

“Let’s not take our concerns about EDD, about our funds, on people who need the help right now,” Assemblywoman Laura Friedman, D-Glendale, said on the Assembly floor earlier this week.

Only a handful of strikes this year — including actors’ and writers’ strikes — have lasted longer than 14 days, according to Cornell University’s Labor Action Tracker. In addition, a report by the National Employment Law Project, a labor advocacy group, indicated that the number of striking workers who would be newly eligible for benefits would likely include a fraction of the claimants applying for benefits due to job losses.

“The number of potentially eligible striking workers pales in comparison to the total pool of UI workers, including the 157,000 workers who are laid off on average each month,” the group’s report read.

A representative of the Writers Guild of America spoke in favor of the bill before the Senate Labor Committee on Wednesday morning, reminding members that studio executives in Hollywood have openly acknowledged their strategy to “leave the union out” before entering into talks. start again in the fall.

“The end game is to let things drag on until the union members start losing their apartments and losing their homes,” a studio executive told Deadline, the online Hollywood news site, in July.

“An employer should not be able to use deep desperation to force movement to the table,” Lorena Gonzalez Fletcher, leader of the California Labor Federation, previously told The Bee. The organization is a lead sponsor of the bill, and Gonzalez Fletcher led previous efforts to extend unemployment benefits to striking workers.

Mathew Miranda of the Bee Capitol Bureau contributed to this story.

This story was originally published September 14, 2023, 3:06 p.m.