Sacramento, CA – Senate Bill 799, authored by Senator Anthony J. Portantino (D – Burbank), seeks to provide unemployment insurance (UI) for striking workers. Under SB 799, striking workers would become eligible for benefits after a worker is on strike for two weeks. The idea is not new or novel, as New York and New Jersey have passed similar laws.
“There is tremendous concern within our workforce across California. Currently, we see writers, hotel workers, nurses, city and county workers all striking and it is deeply concerning,” stated Senator Portantino. “SB 799 will help workers put food on their table when they need it most, in the middle of a labor negotiation. It’s better for the worker and the economy to have job security and a seat at the table as we negotiate the future of the workforce, while business and economic models change.”
The right to strike to improve working conditions, wages, and address other issues in collective bargaining is codified in law for workers in the public and private sector. However, the decision to go on strike means that workers lose all income, deplete their savings, rent and mortgages go unpaid, and debt accumulates. Existing law and case history currently prohibits striking workers—and some locked out workers—from being eligible for UI benefits. This prohibition is a major obstacle to workers fighting to improve their wages and working conditions against employers who refuse to reach agreement.
Last year, the Governor signed AB 2530, which provided subsidized health coverage to striking workers whose employers terminated health benefits. That bill has already provided a vital lifeline to workers on strike but does not help with the loss of income. SB 799 will provide another lifeline by allowing striking or locked out workers to be eligible for much needed UI benefits for the duration of the dispute.
The UI system is funded through payroll taxes paid by employers’ contributions. Employers in California pay payroll taxes on the first $7,000 employee pay—the lowest “taxable wage base” allowed under federal law, and one of the lowest in the country. Currently, New York and New Jersey allow striking workers to collect UI and recently expanded eligibility.
Editors Note – the California Chamber of Commerce on Aug 11 already came out against the bill.
CalChamber Issues Statement on Proposal to Provide UI Payments to Striking Workers
SACRAMENTO, CA — The California Chamber of Commerce today issued the following statement in response to news that Senator Anthony Portantino (D-La Cañada Flintridge) plans to introduce a bill that would provide unemployment insurance (UI) payments to striking workers during labor disputes.
“California’s UI system is already $18 billion in debt,” said Robert Moutrie, CalChamber Policy Advocate. “Adding more costs to an insolvent system will extend the tax increases already underway from COVID-19. These tax increases will hit all California employers—regardless of size—serving as a deterrent to hiring and future investment in the California economy. It is irresponsible and unfair to increase taxes on every California employer, including those without any involvement in any strikes, to subsidize the striking workers in other industries. Being involuntarily unemployed is fundamentally different than voluntarily going on strike.”
Background on Unemployment Insurance Payments
UI payments are intended to assist employees who, through no fault of their own, are forced to leave their employment. Federal law sets out the basic requirements for individuals to qualify, including being “ready and willing to immediately accept work” and “totally or partially unemployed,” and “actively looking for work.” These former employees are paid from their particular former employer’s reserve account in the UI Fund. If the fund becomes insolvent, all employers face steadily increasing UI taxes. These taxes increase by $21 per employee per year, until they reach a maximum of $434 dollars per employee.
The California Chamber of Commerce (CalChamber) is the largest broad-based business advocate to government in California. Membership represents one-quarter of the private sector jobs in California and includes firms of all sizes and companies from every industry within the state. Leveraging our front-line knowledge of laws and regulations, we provide products and services to help businesses comply with both federal and state law. CalChamber, a not-for-profit organization with roots dating to 1890, promotes international trade and investment in order to stimulate California’s economy and create jobs. Please visit our website at www.calchamber.com
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