Striking California workers 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 on Thursday to concur 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 would be eligible for the unemployment benefits.
“Let’s remember – when somebody goes on strike, it’s not a romantic thing. It’s hard on that family,” Portantino said during debate on the floor. “People have raised legitimate concerns about the fund itself. The impact on that fund would be very minor relative to this bill, but the impact to the individual on strike would be significant.”
It’s 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 that the unemployment fund currently carries.
“I haven’t read all these bills,” Newsom said. “What I am very aware of is the debt that we have accrued for the UI fund,” he continued. “I think one has to be cautious about that before you enter into a conversation about expanding its utilization.”
The renewed effort to give strikers financial relief comes as tens of thousands of California workers, mostly in Los Angeles, walked off the job and onto the picket line during what some have 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 them in solidarity in mid-July. Also in southern California, thousands of hotel workers walked out in early July, and Los Angeles municipal employees struck for a day in early August.
The bill faces harsh criticism from the business community in general and the California Chamber of Commerce in particular. The lobbying group has characterized the bill as a “job killer” and voiced concerns 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 the chance to speak with the governor about the bill and doesn’t have specific ideas yet for how to improve the unemployment fund. But he was glad that SB 799 started the conversation about reform.
“The positive consequence of 799 is it made the focus on the fund become a priority,” he said. “I think there will be a lot of conversation between now and January.”
Lawmakers question future of UI fund, availability of money
Republican senators spoke in fervent opposition to the bill, saying that it turned the original intention of unemployment insurance on its head.
“I’m surprised that we even have a bill of this magnitude here in these chambers,” said Republican Sen. Brian Dahle of Bieber. “This is a horrible bill. This is a bad idea.”
California’s unemployment insurance system is funded primarily by payroll taxes that employers pay to the federal government. The amount is calculated by taking a certain percentage of the first $7,000 that an employee earns in a calendar year. Committee analyses noted that California is one of the few states that hasn’t increased the baseline amount of wages eligible for unemployment insurance taxes.
Dahle argued that asking employers to fund unemployment benefits for workers who are striking against them is an unthinkable ask for business owners. All eight Republicans voted against the measure, along with four Democrats.
Senators acknowledged the need to reform the fund’s finances.. A Senate labor committee analysis showed that the existing nearly $18 billion in debt would balloon into 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, an employee has to be on strike for 14 days before becoming eligible for unemployment benefits — down from seven weeks as of a change passed in 2020. New Jersey enacted its law in 2018 and recently amended it to decrease the waiting period from 30 days to 14 days.
“I do wish there was better data to understand this and how it will impact our UI fund, and to look and see how the models in New York and New Jersey are working before we take this step,” said Democratic Sen. Josh Becker of Menlo Park during the debate.
Becker noted that he spent the first two years in the Legislature on the Joint Legislative Audit Committee investigating the Employment Development Department’s bungling of unemployment claims 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’s committed to working on a reform effort next year, but that the condition of the fund shouldn’t keep 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’re going to deal with that piece as well.”
One criticism from Republicans and the business community is that paying unemployment benefits to workers who strike would give them more of an incentive to walk off the job. Republican Assemblyman Bill Essayli, from Corona, has argued that taxpayer dollars shouldn’t be used to pay people who have jobs but are simply choosing to not work them.
The Senate labor committee analysts pointed out that the maximum unemployment insurance benefit that a worker could receive is $450 per week.
“Considering the median weekly income of a Californian is roughly triple that amount, a worker is not likely to be incentivized to go on strike simply because they can get 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 Employment Development Department, which operates the unemployment insurance program, came under harsh criticism during the COVID-19 pandemic for its mishandling of the large surge in claims, many of which ended up being fraudulent. Those missteps earned the department a classification as a “high risk agency” by the state auditor’s office last month.
“Let’s not take our concerns about EDD, about our funds, out on people who need the help right now,” said Assemblymember Laura Friedman, D-Glendale, on the Assembly floor earlier this week.
Only a handful of strikes this year — including the actors and writers strikes — have lasted longer than 14 days, according to Cornell University’s Labor Action Tracker. Additionally, a report from the National Employment Law Project, a labor advocacy group, pointed out that the number of striking workers who would be newly eligible for benefits would likely comprise a fraction of the claimants who apply for benefits due to job loss.
“The number of potentially eligible striking workers simply pales in comparison to the overall pool of UI claimants, including the 157,000 workers who are, on average, laid off 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 Wednesday morning, reminding members that studio executives in Hollywood have openly acknowledged their strategy of letting the union “bleed out” before resuming talks in the fall.
“The endgame is to allow things to drag on until union members start losing their apartments and losing their houses,” said one studio executive to Deadline, the online Hollywood news site, in July.
“An employer shouldn’t be able to use deep desperation to force movement at the table,” Lorena Gonzalez Fletcher, leader of the California Labor Federation, previously told The Bee. The organization is a main sponsor of the bill, and Gonzalez Fletcher led previous efforts to expand unemployment benefits to workers on strike.
The Bee Capitol Bureau’s Mathew Miranda contributed to this story.