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SB-1434 Unemployment insurance: benefit and contribution changes.(2023-2024)

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Date Published: 02/16/2024 09:00 PM
SB1434:v99#DOCUMENT


CALIFORNIA LEGISLATURE— 2023–2024 REGULAR SESSION

Senate Bill
No. 1434


Introduced by Senator Durazo

February 16, 2024


An act to amend Sections 930, 1275, 1279, and 3001 of, to add Section 976.7 to, to add Article 7 (commencing with Section 1612) to Chapter 6 of Part 1 of Division 1 of, and to repeal and add Section 1280 of, the Unemployment Insurance Code, relating to unemployment insurance, and making an appropriation therefor.


LEGISLATIVE COUNSEL'S DIGEST


SB 1434, as introduced, Durazo. Unemployment insurance: benefit and contribution changes.
(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 1/21 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 XIII A of the California Constitution, and thus would require for passage the approval of 2/3 of the membership of each house of the Legislature.
Vote: 2/3   Appropriation: YES   Fiscal Committee: YES   Local Program: NO  

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


SECTION 1.

 Section 930 of the Unemployment Insurance Code is amended to read:

930.
 “Wages” does do not include remuneration in excess of seven thousand dollars ($7,000) paid to an individual by an employer during any calendar year, with respect to employment. the “taxable wage base,” as set forth below:
(a) On and after January 1, 2025, but before January 1, 2027, the taxable wage base shall be the first ____ thousand dollars ($____) paid to an individual by an employer during any calendar year, with respect to employment.
(b) On and after January 1, 2027, the taxable wage base shall be the first ____ thousand dollars ($____) paid to an individual by an employer during the calendar year, with respect to employment.
(c) (1) On and after January 1, 2028, and each January 1 thereafter, the Director of Finance shall calculate an adjusted taxable wage base. The calculation shall increase the taxable wage base by the lesser of 3.5 percent and the rate of change in the averages of the most recent July 1 to June 30, inclusive, period over the preceding July 1 to June 30, inclusive, period for the United States Bureau of Labor Statistics nonseasonally adjusted United States Consumer Price Index for Urban Wage Earners and Clerical Workers (U.S. CPI-W). The result shall be rounded to the nearest one hundred dollars ($100). Each adjusted taxable wage base calculated under this subdivision shall take effect on the following January 1.
(2) If the rate of change in the averages of the most recent July 1 to June 30, inclusive, period over the preceding July 1 to June 30, inclusive, period for the United States Bureau of Labor Statistics nonseasonally adjusted U.S. CPI-W is negative, there shall be no increase or decrease in the taxable wage base pursuant to this subdivision on the following January 1.

SEC. 2.

 Section 976.7 is added to the Unemployment Insurance Code, to read:

976.7.
 (a) In addition to other contributions required by this division, every employer, except as described in subdivision (b), shall pay into the Excluded Workers Fund at the rate of 0.5 percent of wages specified in Section 930. The contributions shall be collected in the same manner and at the same time as any contributions required under Section 977 and 977.5.
(b) For purposes of subdivision (a), “employer” shall not include an employer as defined in Section 676, 684, or 685, or an employer that has elected an alternate method of financing its liability for unemployment compensation benefits pursuant to Article 5 (commencing with Section 801), or Article 6 (commencing with Section 821) of Chapter 3.

SEC. 3.

 Section 1275 of the Unemployment Insurance Code is amended to read:

1275.
 (a) Unemployment compensation benefit award computations shall be based on wages paid in the base period. “Base period” means: for benefit years beginning in October, November, or December, the four calendar quarters ended in the next preceding month of June; for benefit years beginning in January, February, or March, the four calendar quarters ended in the next preceding month of September; for benefit years beginning in April, May, or June, the four calendar quarters ended in the next preceding month of December; for benefit years beginning in July, August, or September, the four calendar quarters ended with the next preceding month of March. Wages used in the determination of benefits payable to an individual during any benefit year may not be used in determining that individual’s benefits in any subsequent benefit year.

(b)For any new claim filed on or after April 2, 2012, or earlier if the department implements the technical changes necessary to establish claims under the alternate base period, as specified in subdivision (c), if an individual cannot establish a claim under subdivision (a), then “base period” means: for

(1) For benefit years beginning in October, November, or December, the four calendar quarters ended in the next preceding month of September; for September.
(2) For benefit years beginning in January, February, or March, the four calendar quarters ended in the next preceding month of December; for December.
(3) For benefit years beginning in April, May, or June, the four calendar quarters ended in the next preceding month of March; for March.
(4) For benefit years beginning in July, August, or September, the four calendar quarters ended in the next preceding month of June. As
(b) As provided in Section 1280, the quarter with the highest wages shall be used to determine the individual’s weekly benefit amount. Wages used in the determination of benefits payable to an individual during any benefit year may not be used in determining that individual’s benefits in any subsequent benefit year.

(c)The department shall implement the technical changes necessary to establish claims under the alternate base period specified in subdivision (b) as soon as possible, but no later than April 2, 2012.

SEC. 4.

 Section 1279 of the Unemployment Insurance Code is amended to read:

1279.
 (a) Each individual eligible under this chapter who is unemployed in any week shall be paid with respect to that week an unemployment compensation benefit in an amount equal to his or her their weekly benefit amount less the smaller of the following: amount of wages in excess of 50 percent of the amount of wages payable to them for services rendered during that week.

(1)The amount of wages in excess of twenty-five dollars ($25) payable to him or her for services rendered during that week.

(2)The amount of wages in excess of 25 percent of the amount of wages payable to him or her for services rendered during that week.

(b) The benefit payment, if not a multiple of one dollar ($1), shall be computed to the next higher multiple of one dollar ($1).
(c) For the purpose of this section only “wages” includes any and all compensation for personal services whether performed as an employee or as an independent contractor or as a juror or as a witness, but does not include any payments, regardless of their designation, made by a city of this state to an elected official thereof as an incident to public office, nor any payment received by a member of the National Guard or reserve component of the armed forces for inactive duty training, annual training, or emergency state active duty.

SEC. 5.

 Section 1280 of the Unemployment Insurance Code is repealed.
1280.

(a)For any new claims filed with an effective date on or after January 1, 1992, and prior to September 11, 2001, an individual’s weekly benefit amount is the amount appearing in column B in the following table opposite that wage bracket in column A that contains the amount of wages paid to the individual for employment by employers during the quarter of his or her base period in which his or her wages were the highest.

A

B

Amount of wages in

Weekly benefit

highest quarter

amount

 $900.00– 948.99

40

 949.00– 974.99

41

 975.00–1,000.99

42

1,001.00–1,026.99

43

1,027.00–1,052.99

44

1,053.00–1,078.99

45

1,079.00–1,117.99

46

1,118.00–1,143.99

47

1,144.00–1,169.99

48

1,170.00–1,195.99

49

1,196.00–1,221.99

50

1,222.00–1,247.99

51

1,248.00–1,286.99

52

1,287.00–1,312.99

53

1,313.00–1,338.99

54

1,339.00–1,364.99

55

1,365.00–1,403.99

56

1,404.00–1,429.99

57

1,430.00–1,455.99

58

1,456.00–1,494.99

59

1,495.00–1,520.99

60

1,521.00–1,546.99

61

1,547.00–1,585.99

62

1,586.00–1,611.99

63

1,612.00–1,637.99

64

1,638.00–1,676.99

65

1,677.00–1,702.99

66

1,703.00–1,741.99

67

1,742.00–1,767.99

68

1,768.00–1,806.99

69

1,807.00–1,832.99

70

1,833.00–1,871.99

71

1,872.00–1,897.99

72

1,898.00–1,936.99

73

1,937.00–1,975.99

74

1,976.00–2,001.99

75

2,002.00–2,040.99

76

2,041.00–2,066.99

77

2,067.00–2,105.99

78

2,106.00–2,144.99

79

2,145.00–2,170.99

80

2,171.00–2,209.99

81

2,210.00–2,248.99

82

2,249.00–2,287.99

83

2,288.00–2,326.99

84

2,327.00–2,352.99

85

2,353.00–2,391.99

86

2,392.00–2,430.99

87

2,431.00–2,469.99

88

2,470.00–2,508.99

89

2,509.00–2,547.99

90

2,548.00–2,586.99

91

2,587.00–2,625.99

92

2,626.00–2,664.99

93

2,665.00–2,703.99

94

2,704.00–2,742.99

95

2,743.00–2,781.99

96

2,782.00–2,820.99

97

2,821.00–2,859.99

98

2,860.00–2,898.99

99

2,899.00–2,937.99

100

2,938.00–2,989.99

101

2,990.00–3,028.99

102

3,029.00–3,067.99

103

3,068.00–3,106.99

104

3,107.00–3,158.99

105

3,159.00–3,197.99

106

3,198.00–3,236.99

107

3,237.00–3,288.99

108

3,289.00–3,327.99

109

3,328.00–3,379.99

110

3,380.00–3,418.99

111

3,419.00–3,470.99

112

3,471.00–3,509.99

113

3,510.00–3,561.99

114

3,562.00–3,600.99

115

3,601.00–3,652.99

116

3,653.00–3,704.99

117

3,705.00–3,743.99

118

3,744.00–3,795.99

119

3,796.00–3,847.99

120

3,848.00–3,899.99

121

3,900.00–3,938.99

122

3,939.00–3,990.99

123

3,991.00–4,042.99

124

4,043.00–4,079.99

125

4,080.00–4,116.99

126

4,117.00–4,153.99

127

4,154.00–4,190.99

128

4,191.00–4,227.99

129

4,228.00–4,264.99

130

4,265.00–4,301.99

131

4,302.00–4,338.99

132

4,339.00–4,375.99

133

4,376.00–4,412.99

134

4,413.00–4,449.99

135

4,450.00–4,486.99

136

4,487.00–4,523.99

137

4,524.00–4,560.99

138

4,561.00–4,597.99

139

4,598.00–4,634.99

140

4,635.00–4,671.99

141

4,672.00–4,708.99

142

4,709.00–4,745.99

143

4,746.00–4,782.99

144

4,783.00–4,819.99

145

4,820.00–4,856.99

146

4,857.00–4,893.99

147

4,894.00–4,930.99

148

4,931.00–4,966.99

149

If the amount of wages paid an individual for employment by employers exceeds four thousand nine hundred sixty-six dollars and ninety-nine cents ($4,966.99) in the quarter of his or her base period in which these wages were highest, the individual’s weekly benefit amount shall be 39 percent of these wages divided by 13, but in no case shall this amount exceed two hundred thirty dollars ($230). If the benefit payable under this subdivision is not a multiple of one dollar ($1), it shall be computed to the next higher multiple of one dollar ($1).

(b)Notwithstanding subdivision (a), for existing claims on or after September 11, 2001, provided that the unemployment benefits have not been exhausted as of September 11, 2001, and for all new claims filed with an effective date beginning on or after September 11, 2001, and prior to January 1, 2003, an individual’s weekly benefit amount is the amount for weeks of unemployment beginning on or after September 11, 2001, appearing in column B in the following table opposite that wage bracket in column A that contains the amount of wages paid to the individual for employment by employers during the quarter of his or her base period in which his or her wages were the highest.

A

B

Amount of wages in

Weekly benefit

highest quarter

amount

 $900.00– 948.99

40

 949.00– 974.99

41

 975.00–1,000.99

42

1,001.00–1,026.99

43

1,027.00–1,052.99

44

1,053.00–1,078.99

45

1,079.00–1,117.99

46

1,118.00–1,143.99

47

1,144.00–1,169.99

48

1,170.00–1,195.99

49

1,196.00–1,221.99

50

1,222.00–1,247.99

51

1,248.00–1,286.99

52

1,287.00–1,312.99

53

1,313.00–1,338.99

54

1,339.00–1,364.99

55

1,365.00–1,403.99

56

1,404.00–1,429.99

57

1,430.00–1,455.99

58

1,456.00–1,494.99

59

1,495.00–1,520.99

60

1,521.00–1,546.99

61

1,547.00–1,585.99

62

1,586.00–1,611.99

63

1,612.00–1,637.99

64

1,638.00–1,676.99

65

1,677.00–1,702.99

66

1,703.00–1,741.99

67

1,742.00–1,767.99

68

1,768.00–1,806.99

69

1,807.00–1,832.99

70

1,833.00–1,871.99

71

1,872.00–1,897.99

72

1,898.00–1,936.99

73

1,937.00–1,975.99

74

1,976.00–2,001.99

75

2,002.00–2,040.99

76

2,041.00–2,066.99

77

2,067.00–2,105.99

78

2,106.00–2,144.99

79

2,145.00–2,170.99

80

2,171.00–2,209.99

81

2,210.00–2,248.99

82

2,249.00–2,287.99

83

2,288.00–2,326.99

84

2,327.00–2,352.99

85

2,353.00–2,391.99

86

2,392.00–2,430.99

87

2,431.00–2,469.99

88

2,470.00–2,508.99

89

2,509.00–2,547.99

90

2,548.00–2,586.99

91

2,587.00–2,625.99

92

2,626.00–2,664.99

93

2,665.00–2,703.99

94

2,704.00–2,742.99

95

2,743.00–2,781.99

96

If the amount of wages paid an individual for employment by employers exceeds two thousand seven hundred eighty-one dollars and ninety-nine cents ($2,781.99) in the quarter of his or her base period in which these wages were highest, the individual’s weekly benefit amount shall be 45 percent of these wages divided by 13, but in no case may this amount exceed three hundred thirty dollars ($330).

(c)For new claims filed with an effective date beginning on or after January 1, 2003, an individual’s weekly benefit amount is the amount appearing in column B in the following table opposite the wage bracket in column A that contains the wages paid to the individual for employment by employers during the quarter of his or her base period in which his or her wages were the highest.

A

B

Amount of wages in

Weekly benefit

highest quarter

amount

 $900.00– 948.99

40

 949.00– 974.99

41

 975.00–1,000.99

42

1,001.00–1,026.99

43

1,027.00–1,052.99

44

1,053.00–1,078.99

45

1,079.00–1,117.99

46

1,118.00–1,143.99

47

1,144.00–1,169.99

48

1,170.00–1,195.99

49

1,196.00–1,221.99

50

1,222.00–1,247.99

51

1,248.00–1,286.99

52

1,287.00–1,312.99

53

1,313.00–1,338.99

54

1,339.00–1,364.99

55

1,365.00–1,403.99

56

1,404.00–1,429.99

57

1,430.00–1,455.99

58

1,456.00–1,494.99

59

1,495.00–1,520.99

60

1,521.00–1,546.99

61

1,547.00–1,585.99

62

1,586.00–1,611.99

63

1,612.00–1,637.99

64

1,638.00–1,676.99

65

1,677.00–1,702.99

66

1,703.00–1,741.99

67

1,742.00–1,767.99

68

1,768.00–1,806.99

69

1,807.00–1,832.99

70

If the amount of wages paid an individual for employment by employers exceeds one thousand eight hundred thirty-two dollars and ninety-nine cents ($1,832.99) in the quarter of his or her base period in which these wages were highest, the individual’s weekly benefit amount shall be 50 percent of these wages divided by 13, but in no case shall this amount exceed the applicable of the following:

(1)For new claims filed with an effective date beginning on or after January 1, 2003, and before January 1, 2004, three hundred seventy dollars ($370).

(2)For new claims filed with an effective date beginning on or after January 1, 2004, and before January 1, 2005, four hundred ten dollars ($410).

(3)For new claims filed with an effective date beginning on or after January 1, 2005, four hundred fifty dollars ($450).

If the benefit payable under this subdivision is not a multiple of one dollar ($1), it shall be computed to the next higher multiple of one dollar ($1).

SEC. 6.

 Section 1280 is added to the Unemployment Insurance Code, to read:

1280.
 (a) For new claims filed with an effective date beginning on or after January 1, 2025, an individual’s weekly benefit amount is one-twenty-first (1/21) the wages paid to the individual for employment by employers during the quarter of their base period in which their wages were highest, or is one hundred seventy dollars ($170), whichever is greater. However, in no case shall the weekly benefit amount exceed the maximum weekly benefit amount of seven hundred dollars ($700).
(b) If the benefit payable under subdivision (a) is not a multiple of one dollar ($1), it shall be computed to the next higher multiple of one dollar ($1).
(c) (1) Commencing on January 1, 2026, and each January 1 thereafter, the Director of Finance shall calculate an adjusted minimum and maximum weekly benefit amount. The calculation shall increase the minimum and maximum weekly benefit amount by the lesser of 3.5 percent and the rate of change in the averages of the most recent July 1 to June 30, inclusive, period over the preceding July 1 to June 30, inclusive, period for the United States Bureau of Labor Statistics nonseasonally adjusted United States Consumer Price Index for Urban Wage Earners and Clerical Workers (U.S. CPI-W). The result shall be rounded to the nearest dollar ($1). Each minimum and maximum weekly benefit amount calculated under this subdivision shall take effect on the following January 1.
(2) If the rate of change in the averages of the most recent July 1 to June 30, inclusive, period over the preceding July 1 to June 30, inclusive, period for the United States Bureau of Labor Statistics nonseasonally adjusted U.S. CPI-W is negative, there shall be no increase or decrease in the minimum or maximum weekly benefit amount pursuant to this subdivision on the following January 1.

SEC. 7.

 Article 7 (commencing with Section 1612) is added to Chapter 6 of Part 1 of Division 1 of the Unemployment Insurance Code, to read:
Article  7. Excluded Workers Fund

1612.
 There shall be created in the State Treasury a special fund known as the Excluded Workers Fund. There shall be deposited in or transferred to this fund all contributions collected from employers pursuant to Section 976.7.

1613.
 Upon appropriation by the Legislature, moneys in the Excluded Workers Fund shall be expended only for purposes of supporting 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, and for the costs of administering this article and Section 976.7.

SEC. 8.

 Section 3001 of the Unemployment Insurance Code is amended to read:

3001.
 (a) The Unemployment Compensation Disability Fund is continued in existence as a special fund in the State Treasury, separate and apart from all other public money or funds of this state. The moneys and assets of this fund shall be held in trust by the State Treasurer and administered under the direction of the director exclusively, for the purpose of this part.
(b) Notwithstanding any other law, the Controller may use the moneys in the Unemployment Compensation Disability Fund for loans to the General Fund as provided in Sections 16310 and 16381 of the Government Code. However, interest shall be paid on all moneys loaned to the General Fund from the Unemployment Compensation Disability Fund. Interest payable shall be computed at a rate determined by the Pooled Money Investment Board to be the current earning rate of the fund from which loaned. This subdivision does not authorize any transfer that will interfere with the carrying out of the object for which the Unemployment Compensation Disability Fund was created.
(c) (1) If loans to the General Fund are made pursuant to subdivision (b) to pay interest due to the federal government for payments made to the state pursuant to Section 1321 of Title 42 of the United States Code, or for any other reason related to the insolvency of the Unemployment Fund, those loans shall only be made as follows:
(A) The loan from the Unemployment Compensation Disability Fund shall only be made from surplus Unemployment Compensation Disability Fund moneys. Loans shall not interfere with the implementation of the purpose of the Unemployment Compensation Disability Fund. The loan shall not restrict future statutory or administrative improvements to the State Disability Insurance program that would have otherwise been possible in the absence of the loan.
(B) If the Unemployment Compensation Disability Fund is predicted to drop below 1.3 times the amount disbursed from the fund in the prior year, the Department of Finance shall immediately revert to the Unemployment Compensation Disability Fund enough money to restore fund adequacy.
(C) The annual contribution rate for the Unemployment Compensation Disability Fund shall not increase as the result of any loan made to the General Fund. In calculating the annual disability insurance tax rate each year, the Employment Development Department shall treat outstanding Unemployment Compensation Disability Fund loans as available cash in the Unemployment Compensation Disability Fund.
(D) All loans shall be paid back within three years of the disbursement of the loan.
(2) The Employment Development Department and the Department of Finance shall provide the Legislature with a report, in accordance with Section 9795 of the Government Code, with options to amend Sections 903 and 977 to increase revenue into the Unemployment Fund.