SB 1434

Bill Subjects

Unemployment Insurance Benefit And Contribution Changes

Abstract

(1) Existing law provides for unemployment compensation benefits for eligible individuals in the state who are unemployed through no fault of their own. Existing law excludes from the definition of "wages," for purposes of the unemployment insurance law, remuneration in excess of $7,000 paid to an individual by an employer during any calendar year, with respect to employment. This bill would change the amount of remuneration that is excluded from the definition of "wages," to $____ on and after January 1, 2025, but before January 1, 2027, and to $____ on and after January 1, 2027. The bill would require an annual cost of living increase to the $____ amount on and after January 1, 2028, and each January 1 thereafter. (2) Under existing law, unemployment compensation benefit award computations are based on wages paid in the base period. Existing law defines "base period" for these purposes (main base period) , and also establishes an alternative base period that is applicable to new claims that are filed on or after a specified date, but no later than April 2, 2012, and for which a valid claim or benefit year cannot be established under the main base period. This bill would make the alternative base period the main base period for all claims. (3) Existing law provides that an individual who is unemployed in any week and is eligible for unemployment compensation benefits shall be paid an unemployment compensation benefit with respect to that week in an amount equal to their weekly benefit amount, reduced by the smaller of $25 or the amount of wages in excess of 25% of the wages payable to the individual for services rendered during that week. This bill would instead require the payment of an unemployment compensation benefit with respect to that week in an amount equal to their weekly benefit amount, reduced by the amount of wages in excess of 50% of the wages payable to the individual for services rendered during that week. (4) Under existing law, for new unemployment insurance claims filed with an effective date beginning on or after January 1, 2003, the weekly benefit amount for individuals whose highest wages in the quarter of their base period exceeds $1,832.99 is 50% of those wages divided by 13. On or after January 1, 2005, that law prohibits the weekly benefit amount from exceeding $450. This bill would instead, for new claims filed with an effective date beginning on or after January 1, 2025, set the individual's weekly benefit amount at 121 of the wages paid to the individual for employment by employers during the quarter of their base period in which their wages were highest, or $170, whichever is greater. The bill would set an increased maximum weekly benefit amount of $700. The bill would require an annual cost of living adjustment to the minimum and maximum weekly benefit amounts, commencing on January 1, 2026, and each January 1 thereafter. (5) Existing law establishes the Unemployment Compensation Disability Fund (disability fund) , a special fund, and authorizes the Controller to use the moneys in the disability fund for loans to the General Fund, as prescribed. Existing law, however, requires interest to be paid on all moneys loaned to the General Fund from the disability fund. This bill would impose additional requirements on loans made from the disability fund when the loan is made to pay interest due to the federal government for payments made to the state pursuant to specified federal law, or for any other reason related to the insolvency of the Unemployment Fund. (6) Existing law provides that employer contributions to the Unemployment Fund shall accrue and become payable by every employer, except as specified, for each calendar year with respect to wages paid for employment. Existing law requires, in addition to other contributions, every employer, except as specified, to pay into the Employment Training Fund contributions at the rate of 0.1% of wages, as defined, and sets forth the manner of collection. This bill would create in the State Treasury a special fund known as the Excluded Workers Fund. The bill would require every employer, except as specified, to pay into the Excluded Workers Fund contributions at the rate of 0.5% of wages, as defined. The bill would require, upon appropriation by the Legislature, specified costs to be reimbursed from the fund and would otherwise limit the use of moneys in the fund for the support of excluded worker programs to provide income assistance to excluded workers who are ineligible for the state or federal unemployment insurance benefits administered by the Employment Development Department and who are unemployed. (7) Because the bill would increase the amount of unemployment compensation paid and make an additional amount payable from the Unemployment Fund, a continuously appropriated special fund, as well as would increase the amount of the unemployment insurance contribution required to be paid by employers and thereby increase the amounts of benefits deposited in the fund, the bill would make an appropriation. (8) This bill would include a change in state statute that would result in a taxpayer paying a higher tax within the meaning of Section 3 of Article XIIIA of the California Constitution, and thus would require for passage the approval of 23 of the membership of each house of the Legislature.