August 28, 2023 - The Rural County Representatives of California (RCRC) reports RCRC, as part of a local government coalition, opposes Senate Bill 799 (Portantino), which would provide employees who remain on strike for more than two weeks with Unemployment Insurance (UI) benefits, thus requiring employers (via UI) to fund ongoing labor disputes.  

Under existing law, UI payments are intended to assist employees who, through no fault of their own, are forced to leave their employment. Participating local agencies fund these payments via an Unemployment Insurance Reserve Account (UI Account) with the Employment Development Department (EDD). SB 799 makes a significant change to this approach by providing unemployment benefits to workers who are currently employed, not seeking other employment, and have chosen, as a labor-negotiating tactic, to go on strike. In the event of a strike that lasts over two weeks, SB 799 would allow all striking workers to claim UI benefits for up to 26 weeks. In this situation, a local government agency would experience simultaneous claims that would significantly increase UI costs. These costs would impact public employers, such as cities, counties, special districts, and joint powers authorities. As cost pressures continue to mount for local governments, it is critical that the State has a fiscally solvent UI system in order for local agencies to continue to provide services to the public and provide competitive benefits to active and retired employees. An employer that has never been party to a labor dispute will still face increased UI costs under this measure. 

In addition to the considerable cost to employers, SB 799 will further harm the already insolvent UI fund and threaten benefits to unemployed Californians in future recessions. As recently reported by the US Department of Labor, California’s UI Fund was exhausted during the COVID-19 pandemic, and still owes the Federal government $18.6 billion dollars. This is nearly double the amount of funds that California borrowed last time California’s UI funds were exhausted during the 2008 recession. 

The State Department of Finance has stated that this measure’s unsuccessful predecessor, Assembly Bill 1066 (Gonzalez, Lorena, 2019), would have resulted in, “… Increased cost pressures on the UI Fund, exacerbating the condition of the Fund and hindering the ability to build a reserve to respond to variations in the economy.” With a possible recession looming, and the State prioritizing budget resiliency, it would be counter-productive for the State to increase cost pressures on its UI fund while simultaneously preparing for a recession by bolstering its reserves.  

Also noteworthy, this measure will erode good faith negotiations at the bargaining table for local government employers. Local governments work hard to engage in good faith bargaining. If SB 799 were to become law, local governments anticipate longer periods of impasse, higher costs associated with protracted Public Employee Relations Broad (PERB) proceedings, and a decline in the quality of public services. This measure is particularly concerning alongside bills like Assembly Bill 504 (Reyes), which significantly expands the right to “sympathy strike”.  

Senate Bill 799 is a late gut and amend on August 22, 2023. The measure has been referred to the Assembly Insurance Committee and is awaiting a hearing. RCRC’s coalition letter can be found here.

ABOUT RURAL COUNTY REPRESENTATIVES OF CALIFORNIA (RCRC)
The Rural County Representatives of California (RCRC) is a thirty-seven member county strong service organization that champions policies on behalf of California’s rural counties. RCRC is dedicated to representing the collective unique interests of its membership, providing legislative and regulatory representation at the State and Federal levels, and providing responsible services for its members to enhance and protect the quality of life in rural California counties. To learn more about RCRC, visit rcrcnet.org and follow @RuralCounties on Twitter, Facebook and Instagram.
Source: RCRC