Bill Text: CA SB227 | 2023-2024 | Regular Session | Amended

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Bill Title: Unemployment: Excluded Workers Program.

Spectrum: Partisan Bill (Democrat 3-0)

Status: (Engrossed) 2023-08-16 - August 16 set for first hearing canceled at the request of author. [SB227 Detail]

Download: California-2023-SB227-Amended.html

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Amended  IN  Senate  April 20, 2023

CALIFORNIA LEGISLATURE— 2023–2024 REGULAR SESSION

Senate Bill

No. 227

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Introduced by Senator Durazo
(Principal coauthor: Assembly Member Santiago)
(Coauthor: Assembly Member Wendy Carrillo)

January 19, 2023

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An act to add and repeal Chapter 2 (commencing with Section 2020) of Part 8 of Division 2 of the Labor Code, and to add Section 17140.6 to the Revenue and Taxation Code, relating to unemployment.

LEGISLATIVE COUNSEL'S DIGEST

SB 227, as amended, Durazo. Unemployment: Excluded Workers Program.

(1) Existing law authorizes the payment of unemployment compensation benefits and requires that they be made in accordance with regulations of the Director of Employment Development. Existing law generally requires the Employment Development Department to promptly pay benefits if claimants are eligible or to promptly deny benefits if they are ineligible. Existing law prohibits payment of unemployment compensation benefits for services performed by a person who is not a citizen or national of the United States, unless that person is an individual who was lawfully admitted for permanent residence at the time the services were performed, was lawfully present for purposes of performing the services, or was permanently residing in the United States under color of law at the time the services were performed, as specified.

This bill would establish, until January 1, 2027, the Excluded Workers Program, to be administered by the Employment Development Department upon appropriation by the Legislature, for the purpose of providing income assistance to excluded workers who are ineligible for the existing state or federal benefits administered by the department and who are unemployed. The bill would make individuals eligible to receive $300 per week for each week of unemployment, if the Director of Employment Development makes certain findings, as defined and specified. The bill would require the department to promulgate regulations to implement the program, including regulations providing for an application process, as specified.

The bill would prohibit the department from requesting or compelling certain information from individuals in connection with administering the program and would prohibit the department from retaining specified documents for longer than necessary to administer benefits. The bill would also prohibit, except as specified, disclosures of personal information, as defined.

The bill would require the department, on or before April 1, 2025, and until all funds have been exhausted, or January 1, 2027, whichever comes first, to release quarterly reports on the progress of the program. The bill would also require the department, on or before March 1, 2026, to submit a report to the Legislature that includes specified information about the program, including, program participation, benefit amounts paid, weeks of benefits paid per participant, specified demographic information on program participants, outreach efforts, and administrative costs.

(2) The Personal Income Tax Law, in modified conformity with federal law, generally defines “gross income” as income from whatever source derived, except as specifically excluded, and provides various exclusions from gross income for purposes of computing tax liability. Existing law requires any bill authorizing a new tax expenditure to contain, among other things, specific goals, purposes, and objectives that the tax expenditure will achieve, detailed performance indicators, and data collection requirements.

This bill, for the taxable year beginning on or after January 1, 2025, and before January 1, 2027, would provide an exclusion from gross income for benefits received under the program. The bill would require the Franchise Tax Board Employment Development Department to submit, on or before June 15, 2026, a report to the Legislature on the total number of claims for the exclusion benefits paid and the average amount claimed for each exclusion, allowed, and would provide findings and declarations relating to the goals, purposes, and objectives of this exclusion.

(3) Existing constitutional provisions require that a statute that limits the right of access to the meetings of public bodies or the writings of public officials and agencies be adopted with findings demonstrating the interest protected by the limitation and the need for protecting that interest.

This bill would make legislative findings to that effect.

Digest Key

Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

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Bill Text

The people of the State of California do enact as follows:

SECTION 1.

 The Legislature finds and declares the following:

(a) In setting up a system of unemployment insurance benefits, the Legislature recognized that private charity and local relief cannot alone prevent the effects of unemployment. Created in 1935, the unemployment insurance system serves two interlaced purposes: providing income support to workers so they can meet the basic needs of their family if they lose their jobs, and helping to sustain consumer demand during economic downturns by providing a continuing stream of dollars for families to spend in their local economies. Most workers who have become unemployed or underemployed through no fault of their own are eligible to receive unemployment insurance benefits and they, their families, and the California economy reap the benefits of this lifesaving program. However, due to historically racial exclusions, many of California’s most vulnerable workers are entirely excluded from the program.

(b) The COVID-19 pandemic and the subsequent economic downturn caused millions of workers in California to lose their jobs and source of livelihood. Estimates from the Legislative Analyst’s Office show that 6 in 10 California workers worked jobs that could not be done remotely, increasing their chances of contracting COVID-19. Most of these workers were women, people of color, and immigrants who worked in some of the most hazardous and low-paid jobs, including fast food, grocery, garment, manufacturing, construction, and others.

(c) Despite paying millions of dollars in state and local taxes and making up one-sixteenth of the California workforce, undocumented immigrants are categorically excluded from unemployment insurance. As of January 1, 2022, Section 1264 of the Unemployment Insurance Code provides that unemployment insurance benefits, extended duration benefits, and federal-state extended benefits shall not be payable to a noncitizen unless the individual “was lawfully admitted for permanent residence at the time the services were performed, was lawfully present for purposes of performing the services, or was permanently residing in the United States under color of law at the time the services were performed[.]” During the COVID-19 pandemic, undocumented immigrant workers were also unable to access programs such as Pandemic Unemployment Assistance, Federal Pandemic Unemployment Compensation, and Pandemic Emergency Unemployment Compensation. These programs were a crucial lifeline for the one in six adults that received these benefits at the height of the crisis. Studies have shown that beyond curtailing poverty, these benefits substantially reduced hardship and improved the well-being of households, including recipients’ financial stability and mental health. Yet, some of California’s most vulnerable workers have been and remain completely excluded from these programs.

(d) Immigrant workers make up a significant percentage of workers in many of the industries that experienced the highest rates of joblessness and low wages predating the COVID-19 pandemic. The impact of this job loss threatens the livelihoods of millions of Californians, in addition to the unemployed workers themselves. An estimated one in three undocumented residents is a parent and more than one in eight schoolaged children in California have a parent who is an undocumented immigrant. Without the support of essential safety net programs like unemployment insurance, many immigrant families are forced to exhaust their life savings, accumulate debt, and compromise their health to simply afford basic necessities like rent and food.

(e) California’s economy also suffers by excluding undocumented workers from this program. By partially replacing unemployed workers’ earnings, unemployment insurance (UI) benefits help alleviate the inherent reduction in consumption and economic activity that results when there is a drastic increase in unemployment. Economists maintain that UI benefits produce at least $1.61 of economic stimulus for every $1 of benefits paid. Indeed, one economist found that during the Great Recession, every $1 of UI benefits produced about $2 dollars of economic impact. Similarly, UI benefits help employers and the labor market by supporting workers to find the best matched positions.

(f) While the COVID-19 pandemic has highlighted the extreme consequences of undocumented workers’ exclusion from unemployment insurance, this problem has existed for decades and it will only become more urgent. Wildfires, severe weather events, economic fluctuations, seasonal changes in workforce needs—all of these factors will continue to cause unemployment. And for most low-income individuals, unemployment without a safety net is a crisis no matter when it occurs.

(g) To rectify the unjust exclusion of immigrant workers from an essential social safety net program and build a safer and more resilient economy, this bill would require the Employment Development Department to establish an Excluded Workers Program to provide weekly monetary assistance to unemployed workers who are ineligible for state or federal unemployment insurance benefits due to their immigration status.

SEC. 2.

 Chapter 2 (commencing with Section 2020) is added to Part 8 of Division 2 of the Labor Code, to read:

CHAPTER  2. Excluded Workers Program

2020.

 (a) This chapter establishes the Excluded Workers Program, which shall be administered by the Employment Development Department, upon appropriation by the Legislature of sufficient funds to carry out the program.

(b) The purpose of the Excluded Workers Program is 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.

(c) It is the intent of the Legislature to authorize persons who are not lawfully present in the United States, as members of the class of workers excluded from unemployment insurance benefits, to participate in and receive disbursements from the Excluded Workers Program, and this chapter is therefore enacted pursuant to subsection (d) of Section 1621 of Title 8 of the United States Code.

2021.

 For purposes of this chapter, the following definitions apply:

(a) “Department” means the Employment Development Department of the Labor and Workforce Development Agency.

(b) “Director” means the Director of Employment Development.

(c) “Employee” has the same meaning as defined in paragraph (1) of subdivision (b) of Section 2775.

(d) “Individual” means a person who is applying for or receiving disbursements from the program.

(e) “Personal information” means any type of information that identifies or describes an individual, including, but not limited to, the individual’s name, social security number, taxpayer identification number, physical description, home address, home telephone number, education, financial matters, and medical or employment history. It includes statements made by, or attributed to, the individual.

(f) “Program” means the Excluded Workers Program.

(g) “Wages” has the same meaning as defined in Section 926 of the Unemployment Insurance Code.

(h) “Week of unemployment” means a week during which the individual performs no work and earns no wages.

2022.

 (a) An individual shall be eligible to receive program benefits with respect to any week that falls between January 1, 2025, and December 31, 2025, inclusive, if the director finds all of the following:

(1) The individual resides in California at the time of the application.

(2) (A) The individual performed at least 93 hours of work or earned at least one thousand three hundred dollars ($1,300) in gross wages over the course of 3 calendar months, which do not need to be consecutive, for work performed in California as an employee within either the 12 months preceding their application for benefits or the calendar year preceding their application for benefits.

(B) The individual’s eligibility under this paragraph shall be determined as provided in subdivision (e) of Section 2023.

(3) The individual experienced a week of unemployment during that week.

(4) The individual is ineligible to receive unemployment insurance benefits under subdivision (a) of Section 1264 of the Unemployment Insurance Code or under subsection (a) of Section 604.3 of Title 20 of the Code of Federal Regulations for reasons related to the individual’s authorization to work.

(b) Notwithstanding any other law, an individual shall be eligible to receive benefits from the program regardless of their immigration status provided they meet the eligibility requirements set forth in subdivision (a).

(c) Notwithstanding subdivision (a), an individual shall be ineligible to receive payments from the program for any week in which the individual received any of the following:

(1) Paid family leave pursuant to Chapter 7 (commencing with Section 3300) of Part 2 of Division 1 of the Unemployment Insurance Code.

(2) Disability benefits pursuant to Part 2 (commencing with Section 2601) of Division 1 of the Unemployment Insurance Code.

(3) Temporary or permanent disability benefits pursuant to Article 3 (commencing with Section 4650) of Chapter 2 of Part 2 of Division 4.

2023.

 (a) On or before January 1, 2025, the department shall promulgate regulations to administer the program. The regulations shall set forth all of the following processes, at a minimum:

(1) A process by which individuals may apply for the benefits under this chapter.

(2) A process for notifying individuals of the acceptance or denial of their application in a timely manner.

(3) A process for individuals to request a review of the denial.

(b) In administering the program established by this chapter, the department shall not take any of the following actions:

(1) Requesting, orally or in writing, an individual’s nationality, place of birth, or eligibility or ineligibility for a social security number.

(2) Compelling or requesting an individual to admit in writing whether they have proof of lawful presence in the United States.

(3) Contacting an individual’s current, former, or prospective employer for any purpose, including to verify employment status. This paragraph does not prohibit the department from using other means to verify past employment.

(4) Recording an individual’s immigration or citizenship status.

(c) The department and any entity acting as an agent for the department shall not retain the documents or copies of documents submitted by applicants for this program for any longer than necessary to administer benefits.

(d) The department shall begin accepting applications as soon as practicable following the issuance of final regulations to administer the program.

(e) (1) For purposes of demonstrating eligibility under paragraph (2) of subdivision (a) of Section 2022, an applicant shall self-attest to meeting that requirement and shall submit documentation with a value equal to at least four points to establish proof of work history, except as provided in paragraph (3). The following documentation has the following values:

(A) The following documentation each has a value of four points:

(i) Wage statements, as set forth in subdivision (a) of Section 226 or, if the employer has failed to provide the applicant with accurate wage statements meeting the requirements of subdivision (a) of Section 226, nonpayroll checks paid by the employer or employer’s agent to the applicant or other records showing payments from an employer to the applicant.

(ii) A federal tax return for the taxable year immediately preceding the date of application for benefits, with proof of filing with the Internal Revenue Service using a social security number or valid federal individual taxpayer identification number demonstrating at least five thousand two hundred dollars ($5,200) in gross wages. Five thousand two hundred dollars ($5,200) in gross wages demonstrates at least one thousand three hundred dollars ($1,300) in gross wages during the individual’s highest earning quarter in accordance with the requirement set forth in subparagraph (A) of paragraph (2) of subdivision (a) of Section 2022.

(iii) A state tax return for the taxable year immediately preceding the date of application for benefits, filed with the Franchise Tax Board using a social security number or valid federal individual taxpayer identification number demonstrating at least five thousand two hundred dollars ($5,200) in gross wages.

(iv) An Internal Revenue Service Form W-2 demonstrating at least five thousand two hundred dollars ($5,200) in gross wages for the taxable year immediately preceding the date of application for benefits.

(v) A Form 1099, a state tax return, or a federal tax form from the prior year demonstrating at least five thousand two hundred dollars ($5,200) in gross income, coupled with evidence sufficient to demonstrate that the individual earned that income as an employee.

(vi) Time records showing when the employee begins and ends work each work period sufficient to demonstrate at least 93 hours worked within a 3-month period from the 12-month period prior to the application.

(B) The following documentation each has a value of two points:

(i) Evidence, such as statements issued by a financial institution, showing regular direct deposits made by an employer to the applicant, or regular deposits of cash earnings or checks made by the applicant to the applicant’s bank account.

(ii) Receipts from a check-cashing establishment or transaction logs from a payment app showing regular direct deposits, deposits, or transfers from an employer.

(iii) Receipts or records showing a consecutive pattern of commuting to and from a work location, such as toll records, parking receipts, or public transportation records that demonstrate at least 93 hours of work performed within a three-month period.

(iv) A letter attesting to the applicant’s employment history issued by a charitable organization registered with the Department of Justice or other entity designated by the director and based on knowledge that the applicant meets the requirements of paragraph (2) of subdivision (a) of Section 2022, acquired in the course of conducting intake, interviews, or other standard processes related to the provision of job-related direct services to the applicant. The department shall not contact the charitable organization for any reason other than to authenticate the letter.

(C) The following documentation has a value of one point:

(i) An employer-issued identification badge or identification card.

(ii) Emails, text messages, social media messages, or other written communications relating to delivery order sheets, work invoices, work schedules, sign-in sheets, timesheets, directions or instructions from employers, or other written work-related communications between an applicant and an employer establishing the existence of a work relationship. Communications described in this clause shall only count for a total of one point, regardless of the quantity or volume of documentation submitted.

(2) The department may, by regulation, establish alternative documents that sufficiently demonstrate an applicant’s qualification for the program, provided that those documents demonstrate that the applicant meets the eligibility requirement set forth in paragraph (2) of subdivision (a) of Section 2022.

(3) If an applicant cannot provide sufficient documentation of their work hours, wages, or other employment records in order to meet the minimum documentation value of four points as required by this subdivision, the department may conduct a credibility interview to determine whether the applicant’s submission reasonably demonstrates that they meet the eligibility requirements of this program set forth in paragraph (2) of subdivision (a) of Section 2022. The department may establish procedures for credibility interviews.

2024.

 (a) Personal information and documents collected under this chapter are confidential and exempt from disclosure under the California Public Records Act (Division 10 (commencing with Section 7920.000) of Title 1 of the Government Code), and may be used or disclosed only for purposes of administering the program, except as necessary to comply with an order, warrant, or subpoena, as issued by a court.

(b) In carrying out the services and programs created by this chapter, the department shall establish procedures and safeguards against unauthorized access to, and use of, personal information collected by the department pursuant to this chapter by any person or entity, public or private, other than an employee of the department or a person or entity acting as an agent for the department for the purpose of administering the program.

(c) Personal information and documents collected under this chapter shall not be shared with other government agencies except as necessary to administer the program, notwithstanding the existence of data sharing agreements to which the department is a party.

2025.

 (a) Any individual found eligible for the program shall receive a payment in the amount of three hundred dollars ($300) for each week of unemployment occurring between January 1, 2025, and December 31, 2025, inclusive.

(b) The total number of weeks of unemployment for which a covered individual may receive assistance under this chapter shall not exceed 20 weeks.

2026.

 (a) (1) On or before April 1, 2025, the department shall release quarterly reports on the progress of the program, including, but not limited to:

(A) Total benefits paid.

(B) The number of individuals who applied for benefits.

(C) The number of individuals who received benefits.

(2) The quarterly reporting shall continue until all funds have been exhausted, or until January 1, 2027, whichever comes first.

(b) (1) On or before March 1, 2026, the department shall submit a report to the Legislature on the program, including, but not limited to:

(A) Program participation.

(B) Benefit amounts paid.

(C) Weeks of benefits paid per participant.

(D) Demographic information on program participants, including income, gender, race, ethnicity, language, geographic distribution by county and legislative district, and employment sector.

(E) Outreach efforts.

(F) Administrative costs.

(2) A report to the Legislature pursuant to this subdivision shall be submitted in compliance with Section 9795 of the Government Code.

2027.

 This chapter shall remain in effect only until January 1, 2027, and as of that date is repealed.

SEC. 3.

 Section 17140.6 is added to the Revenue and Taxation Code, to read:

17140.6.

 For the taxable year beginning on or after January 1, 2025, and before January 1, 2027, gross income does not include benefits or payments received under Chapter 2 (commencing with Section 2020) of Part 8 of Division 2 of the Labor Code.

SEC. 4.

 For purposes of complying with Section 41 of the Revenue and Taxation Code, the Legislature finds and declares as follows:

(a) The goals, purposes, and objectives of this exclusion are to ensure that, as much as is reasonably possible, the benefits received under the Excluded Workers Program (Chapter 2 (commencing with Section 2020) of Part 8 of Division 2 of the Labor Code) are spent in the communities in which the individuals receiving the benefits live.

(b) The Legislature shall use income reporting for the exclusion the benefits provided by the Franchise Tax Board Employment Development Department as the performance indicator to measure whether the exclusion meets the goals, purposes, and objectives stated in subdivision (a).

(c) The Franchise Tax Board Employment Development Department shall submit to the Legislature, no later than June 15, 2026, a report that complies with Section 9795 of the Government Code on the total number of claims for the exclusion benefits paid and the average amount claimed for each exclusion. allowed. Any individually identifiable information collected pursuant to this subdivision that is used in the report shall be compiled in an aggregate or anonymized manner to preserve confidentiality.

(d) The disclosure provisions of this section shall be treated as an exception to Section 19542 under Article 2 (commencing with Section 19542) of Chapter 7 of Part 10.2 of Division 2 of the Revenue and Taxation Code.

SEC. 5.

 The Legislature finds and declares that Section 2 of this act, which adds Section 2024 to the Labor Code, imposes a limitation on the public’s right of access to the meetings of public bodies or the writings of public officials and agencies within the meaning of Section 3 of Article I of the California Constitution. Pursuant to that constitutional provision, the Legislature makes the following findings to demonstrate the interest protected by this limitation and the need for protecting that interest:

The act strikes a balance between furthering the public interest in rectifying the unjust exclusion of immigrant workers from essential social safety net programs like unemployment insurance and protecting the privacy of individuals receiving or applying for the benefits outlined in this act.