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SB-21 Workforce development: poverty-reducing labor standards: funds, programs, reporting, and analyses.(2025-2026)



Current Version: 12/02/24 - Introduced

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SB21:v99#DOCUMENT


CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION

Senate Bill
No. 21

Introduced by Senator Durazo

December 02, 2024

An act to amend Section 14005 of, and to add Chapter 5.2 (commencing with Section 14535) to Division 7 of, the Unemployment Insurance Code, relating to workforce development.


LEGISLATIVE COUNSEL'S DIGEST


SB 21, as introduced, Durazo. Workforce development: poverty-reducing labor standards: funds, programs, reporting, and analyses.
Existing law, the California Workforce Innovation and Opportunity Act, establishes the California Workforce Development Board as the body responsible for assisting the Governor in the development, oversight, and continuous improvement of California’s workforce investment system and the alignment of the education and workforce investment systems to the needs of the 21st century economy and workforce. Existing law requires the board to assist the Governor in promoting the development of a well-educated and highly skilled 21st century workforce, and the development of a high road economy that offers an educated and skilled workforce with fair compensation and treatment in the workplace. Existing law also requires the board to assist in developing standards, procedures, and criteria for defining high road employers, high road jobs, high road workforce development, and high road training partners, as specified. Existing law defines “high road” for these purposes to mean a set of economic and workforce development strategies to achieve economic growth, economic equity, shared prosperity, and a clean environment.
This bill would define “job quality,” “quality jobs,” and “economic equity” for purposes of the act.
Existing federal law, the CHIPS and Science Act of 2022, the Inflation Reduction Act of 2022, and the Infrastructure Investment and Jobs Act (federal jobs acts), provides various grants to state and local entities for specified purposes.
This bill would create the Equity, Climate Resilience, and Quality Jobs Fund in the State Treasury and would require, to the extent permissible under federal law, 1% of all qualified moneys, as defined, received from the federal government pursuant to any federal jobs act to be transferred into the fund. The bill would make moneys in the fund available upon appropriation to the board for specified purposes.
This bill would require, upon appropriation of moneys from the fund, all state agencies administering any moneys received pursuant to any federal jobs act to develop and adopt poverty-reducing labor standards, as specified, for all investments made by those agencies using those moneys. The bill would impose reporting requirements on state and local agencies, as specified, and would authorize the board to develop rules and regulations on the content and manner of reporting by state agencies. The bill would also require the board to contract with a research institution to receive the reports and perform analyses on equity, climate resilience, and quality jobs outcomes resulting from the investments made by the reporting entities using moneys received from the fund. By imposing new duties on local agencies that receive federal moneys, the bill would impose a state-mandated local program.
The bill would include findings that changes proposed by this bill address a matter of statewide concern rather than a municipal affair and, therefore, apply to all cities, including charter cities.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to the statutory provisions noted above.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: YES  

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


SECTION 1.

 The Legislature finds and declares as follows:
(a) (1) On September 6, 2024, President Biden signed Executive Order No. 14126 on Investing in America and Investing in American Workers. The Biden-Harris Administration’s “Good Job’s EO” states that the federal government has long promoted high labor standards to ensure fair competition, stability, and efficiency on federally assisted projects. The use of high labor standards on federally assisted projects, including the use of prevailing wages, project labor agreements, and equal employment opportunity policies, dates back almost a century. These tools ensure timely and economical completion of projects, provide a reliable source of highly skilled workers, support equitable workforce development, and improve worker health and safety on the job, while also improving outcomes for the communities in which projects are located. However, these tools can and should be employed to a greater extent than they have been in the past.
(2) For instance, providing incentives for federally assisted projects with high labor standards, including those using collective bargaining agreements, project labor agreements, and certain community benefits agreements, drives efficient project completion while also supporting high-quality jobs, worker safety, and broader investment in communities. Ensuring that workers on federally assisted projects are paid competitive and equitable wages will enhance worker productivity, generate higher quality work, and reduce turnover, providing value for taxpayers. Promoting inclusivity, with equal opportunity for all qualified workers, will help ensure that federally assisted projects have the workforce needed to implement the Investing in America agenda.
(b) The Good Jobs EO states that it is the policy of the Biden-Harris Administration to promote the creation of equitable workforce development pathways for workers to obtain good jobs that pay family-sustaining wages, provide critical benefits, prevent workplace discrimination, ensure worker safety, and allow workers a free and fair chance to join a union.
(c) The Good Jobs EO requires implementation priorities in selecting projects for receiving federal financial assistance from the Investing in America agenda and directs implementing agencies to consider actions that, as appropriate and consistent with applicable law, do the following:
(1) Prioritize projects for selection that provide a clear plan for efficient project delivery by promoting positive labor-management relations. Examples of instruments and policies that implementing agencies could consider encouraging applicants to adopt, as appropriate, may include project labor agreements, community benefits agreements, collective bargaining agreements, agreements intended to ensure the uninterrupted delivery of services, agreements designed to facilitate first collective bargaining agreements, voluntary union recognition, and neutrality by the employer with respect to union organizing.
(2) Prioritize projects that enhance worker productivity by promoting family-sustaining wages. Examples of policies that implementing agencies could consider encouraging applicants to adopt, as appropriate, may include payment of wages tied to a particular metric, including wages not less than prevailing wages, the upper quartile of industry pay, or union pattern wage scales, including for workers in the care workforce, that is, individuals working the field of childcare and long-term care; policies to promote equal pay and eliminate discriminatory pay practices, including transparency measures; and other policies aligned with the Good Jobs Principles established by the Department of Commerce and the Department of Labor on June 21, 2022.
(3) Prioritize projects that supply critical benefits that promote economic security for workers, including paid sick, family, and medical leave; health care; retirement benefits; and child, dependent, and elder care.
(4) Prioritize projects that promote and expand access to, and put in place policies that combat discrimination that limits employment in, high-quality jobs for workers from underserved communities. Examples of policies that implementing agencies could consider encouraging applicants to adopt, as appropriate, may include workforce plans that contain strategies for recruiting, hiring, and retaining workers from underserved and local communities; policies that help prevent workplace discrimination and harassment, including through reporting structures and ongoing training; and participation in programs designed to support compliance with existing equal employment opportunity obligations under Executive Order No. 11246 of September 24, 1965 (Equal Employment Opportunity), as amended, Section 503 of the Rehabilitation Act of 1973 (Public Law 93-112), the Vietnam Era Veterans’ Readjustment Assistance Act of 1972 (Public Law 92-540), as amended, and their implementing regulations.
(5) Prioritize projects that strengthen workforce development by expanding worker access to high-quality training and portable credential that lead to good jobs. Examples of policies that implementing agencies could consider encouraging applicants to adopt, as appropriate, may include the use of joint labor-management partnerships that invest in union-affiliated training programs, registered apprenticeships, and pre-apprenticeship programs that matriculate to registered apprenticeships; partnerships with organizations that deliver training, including community colleges, career and technical education programs, disability service organizations, the public workforce systems, and the American Climate Corps; and the provision of supportive services necessary to complete training, including as childcare and transportation assistance.
(6) Prioritize projects that promote and protect worker health and safety through policies that encourage supplemental safety training, worker and union participation in the design and implementation of workplace safety and health management systems, and disclosure of occupational safety and health violations.
(d) The Good Jobs EO outlines an implementation approach for states to follow, including all of the following:
(1) Including application evaluation criteria or selection factors that prioritize applicants that adopt or provide a specific plan to adopt those priorities.
(2) Publishing best practice guides and other guidance to applicants to promote and implement those priorities, including guides on what types of federal financial assistance can be used for workforce development, including supportive services.
(3) Engaging with applicants, where appropriate, during preaward processes to ensure that applicants understand the benefits of those priorities for key programs and projects.
(4) Collecting relevant data to demonstrate funding recipients’ progress, including by doing the following:
(A) Requesting in funding notices or through other appropriate mechanisms that applicants address a series of “yes” or “no” questions regarding the implementation of those priorities to ensure transparency of labor practices and commitments.
(B) Using existing compliance practices, including the collection of certified payrolls when applicable, to collect detailed data on job quality, equity, and worker embowerment.
(C) Requesting reporting on key metrics and encouraging voluntary public reporting of additional relevant metrics developed by the implementing agency.
(5) Promoting compliance with federal law and commitments made by applicants, including, as appropriate, referring alleged violations of law to other executive departments and agencies for a determination of whether circumstances warrant the issuance of financial penalties or collection of relief for workers harmed, withholding further federal financial assistance pending correction of a deficiency, recovery of some or all federal funds, or debarment.
(6) Supporting program staff and developing implementing agency expertise, including by consulting the Department of Labor and implementing agency labor advisors, to train program staff on how to implement those priorities and ensure that staff have the expertise needed to support the creation of good jobs through each phase of project delivery on federally assisted projects.

SEC. 2.

 Section 14005 of the Unemployment Insurance Code is amended to read:

14005.
 For purposes of this division:
(a) “Board” means the California Workforce Development Board.
(b) “Agency” means the Labor and Workforce Development Agency.
(c) “Career pathways,” “career ladders,” or “career lattices” are an identified series of positions, work experiences, or educational benchmarks or credentials with multiple access points that offer occupational and financial advancement within a specified career field or related fields over time. “Career pathways,” “career ladders,” and “career lattices” offer combined programs of rigorous and high-quality education, training, and other services that do all of the following:
(1) Align with the skill needs of industries in the economy of the state or regional economy involved.
(2) Prepare an individual to be successful in any of a full range of secondary or postsecondary education options, including apprenticeships registered under the National Apprenticeship Act of 1937 (29 U.S.C. Sec. 50 et seq.), except as in Section 3226 of Title 29 of the United States Code.
(3) Include counseling to support an individual in achieving the individual’s education and career goals.
(4) Include, as appropriate, education offered concurrently with and in the same context as workforce preparation activities and training for a specific occupation or occupational cluster.
(5) Organize education, training, and other services to meet the particular needs of an individual in a manner that accelerates the educational and career advancement of the individual to the extent practicable.
(6) Enable an individual to attain a secondary school diploma or its recognized equivalent, and at least one recognized postsecondary credential.
(7) Help an individual enter or advance within a specific occupation or occupational cluster.
(d) “Cluster-based sector strategies” mean methods of focusing workforce and economic development on those sectors that have demonstrated a capacity for economic growth and job creation in a particular geographic area.
(e) “Data driven” means a process of making decisions about investments and policies based on systematic analysis of data, which may include data pertaining to labor markets.
(f) “Economic security” means, with respect to a worker, earning a wage sufficient to support a family adequately, and, over time, to save for emergency expenses and adequate retirement income, based on factors such as household size, the cost of living in the worker’s community, and other factors that may vary by region.
(g) “Evidence-based” means making use of policy research as a basis for determining best policy practices. Evidence-based policymakers adopt policies that research has shown to produce positive outcomes, in a variety of settings, for a variety of populations over time. Successful, evidence-based programs deliver quantifiable and sustainable results. Evidence-based practices differ from approaches that are based on tradition, belief, convention, or anecdotal evidence.
(h) “High-priority occupations” mean occupations that have a significant presence in a targeted industry sector or industry cluster, are in demand, or projected to be in demand, by employers, and pay or lead to payment of a wage that provides economic security.
(i) (1) “In-demand industry sector or occupation” means either of the following:
(A) An industry sector that has a substantial current or potential impact, including through jobs that lead to economic self-sufficiency and opportunities for advancement, on the state, regional, or local economy, as appropriate, and that contributes to the growth or stability of other supporting businesses, or the growth of other industry sectors.
(B) An occupation that currently has or is projected to have a number of positions, including positions that lead to economic self-sufficiency and opportunities for advancement, in an industry sector so as to have a significant impact on the state, regional, or local economy, as appropriate.
(2) The determination of whether an industry sector or occupation is “in-demand” under this subdivision shall be made by the board or local board, or through the regional planning process in which local boards participate under the Workforce Innovation and Opportunity Act, as appropriate, using state and regional business and labor market projections, including the use of labor market information.
(j) “Individual with employment barriers” means an individual with any characteristic that substantially limits an individual’s ability to obtain employment, including indicators of poor work history, lack of work experience, or access to employment in nontraditional occupations, long-term unemployment, lack of educational or occupational skills attainment, dislocation from high-wage and high-benefit employment, low levels of literacy or English proficiency, disability status, or welfare dependency, including members of all of the following groups:
(1) Displaced homemakers.
(2) Low-income individuals.
(3) Indians, Alaska Natives, and Native Hawaiians, as those terms are defined in Section 3221 of Title 29 of the United States Code.
(4) Individuals with disabilities, including youths who are individuals with disabilities.
(5) Older individuals.
(6) Ex-offenders.
(7) Homeless individuals, as defined in Section 14043e-2(6) of Title 42 of the United States Code, or homeless children and youths, as defined in Section 11434a(2) of Title 42 of the United States Code.
(8) Youth who are in, or have aged out of, the foster care system.
(9) Individuals who are English language learners, individuals who have low levels of literacy, and individuals facing substantial cultural barriers.
(10) Eligible migrant and seasonal farmworkers, as defined in Section 3322(i) of Title 29 of the United States Code.
(11) Individuals within two years of exhausting lifetime eligibility under Part A of Title IV of the Social Security Act (42 U.S.C. Sec. 601 et seq.).
(12) Single parents, including single, pregnant women.
(13) Long-term unemployed individuals.
(14) Transgender and gender nonconforming individuals.
(15) Any other groups as the Governor determines to have barriers to employment.
(k) “Industry cluster” means a geographic concentration or emerging concentration of interdependent industries with direct service, supplier, and research relationships, or independent industries that share common resources in a given regional economy or labor market. An industry cluster is a group of employers closely linked by common product or services, workforce needs, similar technologies, and supply chains in a given regional economy or labor market.
(l) “Industry or sector partnership” means a workforce collaborative, convened or acting in partnership with the board or a local board, that does the following:
(1) Organizes key stakeholders in an industry cluster into a working group that focuses on the shared goals and human resources needs of the industry cluster and that includes, at the appropriate stages of development of the partnership:
(A) Representatives of multiple businesses or other employers in the industry cluster, including small and medium-sized employers when practicable.
(B) One or more representatives of a recognized state labor organization or central labor council, or another labor representative, as appropriate.
(C) One or more representatives of an institution of higher education with, or another provider of, education or training programs that support the industry cluster.
(2) The workforce collaborative may include representatives of any of the following:
(A) State or local government.
(B) State or local economic development agencies.
(C) State boards or local boards, as appropriate.
(D) A state workforce agency or entity providing employment services.
(E) Other state or local agencies.
(F) Business or trade associations.
(G) Economic development organizations.
(H) Nonprofit organizations, community-based organizations, or intermediaries.
(I) Philanthropic associations.
(J) Industry associations.
(K) Other organizations, as determined to be necessary by the members comprising the industry sector or partnership.
(m) “Industry sector” means those firms that produce similar products or provide similar services using somewhat similar business processes, and are closely linked by workforce needs, within a regional labor market.
(n) “Local labor federation” means a central labor council that is an organization of local unions affiliated with the California Labor Federation or a local building and construction trades council affiliated with the State Building and Construction Trades Council of California.
(o) “Sector strategies” means methods of prioritizing investments in competitive and emerging industry sectors and industry clusters on the basis of labor market and other economic data indicating strategic growth potential, especially with regard to jobs and income, and exhibit the following characteristics:
(1) Focus workforce investment in education and workforce training programs that are likely to lead to jobs providing economic security or to an entry-level job with a well-articulated career pathway into a job providing economic security.
(2) Effectively boost labor productivity or reduce business barriers to growth and expansion stemming from workforce supply problems, including skills gaps and occupational shortages by directing resources and making investments to plug skills gaps and provide education and training programs for high-priority occupations.
(3) May be implemented using articulated career pathways or lattices and a system of stackable credentials.
(4) May target underserved communities, disconnected youths, incumbent workers, and recently separated military veterans.
(5) Frequently are implemented using industry or sector partnerships.
(6) Typically are implemented at the regional level where sector firms, those employers described in subdivisions (j) and (l), often share a common labor market and supply chains. However, sector strategies may also be implemented at the state or local level depending on sector needs and labor market conditions.
(p) “Workforce Innovation and Opportunity Act of 2014” means the federal act enacted as Public Law 113-128.
(q) (1) “Earn and learn” includes, but is not limited to, a program that does either of the following:
(A) Combines applied learning in a workplace setting with compensation allowing workers or students to gain work experience and secure a wage as they develop skills and competencies directly relevant to the occupation or career for which they are preparing.
(B) Brings together classroom instruction with on-the-job training to combine both formal instruction and actual paid work experience.
(2) “Earn and learn” programs include, but are not limited to, all of the following:
(A) Apprenticeships.
(B) Preapprenticeships.
(C) Incumbent worker training.
(D) Transitional jobs, as described in paragraph (5) of subsection (d) of Section 3174 of Title 29 of the United States Code, as that section read on January 1, 2021, and subsidized employment with an employer of record, which may include, but not be limited to, an employment social enterprise or a worker cooperative, particularly for individuals with barriers to employment.
(E) Paid internships and externships.
(F) Project-based compensated learning.
(r) “High road” means a set of economic and workforce development strategies to achieve economic growth, economic equity, shared prosperity prosperity, and a clean environment. The strategies include, but are not limited to, interventions that:
(1) Improve job quality and job access, including for women and people from underserved and underrepresented populations.
(2) Meet the skill and profitability needs of employers.
(3) Meet the economic, social, and environmental needs of the community.
(s) “High road training partnership” means an initiative or project that models strategies for developing industry-based, worker-focused training partnerships, including labor-management partnerships. High Road Training partnerships operate via regional, industry- or sector-based training partnerships comprised of employers, workers, and their representatives including organized labor, community-based organizations, education, training, and social services providers, and labor market intermediaries. High Road Training partnerships demonstrate job quality standards and employment practices that include, but are not limited to, the following:
(1) Provision of comparatively good wages and benefits, relative to the industry, occupation, and labor market in which participating workers are employed.
(2) Payment of workers at or above local or regional living wage standards as well as payment at or above regional prevailing wage standards where such standards exist for the occupations in question.
(3) A history of investment in employee training, growth, and development.
(4) Provision of opportunities for career advancement and wage growth.
(5) Safe and healthy working conditions.
(6) Consistent compliance with workplace laws and regulations, including proactive efforts to remedy past problems.
(7) Adoption of mechanisms to include worker voice and agency in the workplace.
(t) “High road construction careers” are high road training partnerships that invest in regional training partnerships comprised of local building trades councils, workforce, community, and education interests that connect to state-approved apprenticeship programs, that utilize the standard Multi-Craft Core preapprenticeship training curriculum and provide a range of supportive services and career placement assistance to women and people from underserved and underrepresented populations.
(u) “Career advancement” means demonstrated progression along a career ladder as evidenced by both wage growth and occupational advancement.
(v) “Employment social enterprise” means a nonprofit or for-profit organization that meets all of the following requirements:
(1) Is organized as a social purpose corporation or a benefit corporation, or as an organization incorporated within a larger organization.
(2) Demonstrates evidence of a mission to provide and to access employment and social supports with on-the-job and life skills training to a direct labor force comprised of individuals with a “barrier to employment,” as that phrase is defined in Section 3102 of Title 29 of the United States Code, as that section read on January 1, 2021.
(3) Is evidence-based and utilizes data-driven policies in implementing procedures and measuring outcomes.
(4) Produces or assembles goods or provides services, or a combination of both.
(w) “Worker cooperative” has the same meaning as defined in Section 12253.5 of the Corporations Code.
(x) “Job quality” or “quality jobs” means jobs that provide family-sustaining wages, employer-provided benefits, including, but not limited to, health insurance, retirement, and paid time off, career advancement opportunities, and collective worker input, and are stable, predictable, safe, and free of discrimination.
(y) “Economic equity” means all workers have access to quality jobs, structural opportunities for upward mobility, wealth-generating opportunities, and safe and healthy workplaces, regardless of race, ethnicity, gender, sexual orientation, religious beliefs, ability, or past criminal record, and productivity gains are widely distributed to workers.

SEC. 3.

 Chapter 5.2 (commencing with Section 14535) is added to Division 7 of the Unemployment Insurance Code, to read:
CHAPTER  5.2. Federal Jobs Act Funds

14535.
 For purposes of this chapter, the following definitions apply:
(a) “Federal jobs act” means any of the following:
(1) The CHIPS and Science Act of 2022 (Public Law 117-167).
(2) The Inflation Reduction Act of 2022 (Public Law 117-169).
(3) The Infrastructure Investment and Jobs Act (Public Law 117-58).
(b) “Fund” means the Equity, Climate Resilience, and Quality Jobs Fund, as created by this chapter.
(c) “High road construction careers” has the same meaning as in Section 14005.
(d) “High road training partnerships” has the same meaning as in Section 14005.
(e) “Local agency” means a county, city, city and county, school district, special district, authority, agency, any other municipal public corporation or district, or other political subdivision of the state.
(f) “Qualified moneys” means both of the following:
(1) Moneys received prior to the effective date of this chapter that are in the General Fund and have not been allocated for a specific purpose as of the effective date of this chapter.
(2) Moneys received into the General Fund on or after the effective date of this chapter.
(g) “State agency” has the same meaning as in subdivision (a) of Section 11000 of the Government Code.

14535.1.
 (a) There is hereby created the Equity, Climate Resilience, and Quality Jobs Fund in the State Treasury.
(b) Notwithstanding any law, but to the extent permissible under federal law, 1 percent of all qualified moneys received into the General Fund from the federal government pursuant to any federal jobs act shall be transferred into the fund.
(c) To the extent authorized by the federal jobs acts, moneys in the fund shall be available, upon appropriation, to the California Workforce Development Board for the following purposes:
(1) Developing poverty-reducing programs, including, but not limited to, high road training partnerships and high road construction careers, and other workforce programs that drive the development and adoption of poverty-reducing labor standards that satisfy the requirements for high road, quality jobs, and economic equity, as defined in Section 14005, and reach communities with the highest barriers to employment and economic equity.
(2) Supporting the development of poverty-reducing labor standards that satisfy the requirements for high road, quality jobs, and economic equity, as defined in Section 14005, through investments made using moneys received pursuant to federal jobs acts, reporting required by this chapter, and analyses made by a research institution.
(3) Funding state-approved apprenticeship programs in the building and construction trades, if the person or entity requesting the funding demonstrates that there is a need for the program through the satisfaction of at least one of the conditions described in paragraphs (1) to (3), inclusive, of subdivision (b) of Section 3075 of the Labor Code.
(d) The board shall contract with a research institution to receive the reports required by Section 14535.2 and to perform analyses on equity, climate resilience, and quality jobs outcomes resulting from the investments made by the reporting entities using moneys received from the Equity, Climate Resilience, and Quality Jobs Fund.

14535.2.
 (a) (1) All state agencies administering any moneys received pursuant to any federal jobs act shall, upon appropriation of moneys for this purpose from the Equity, Climate Resilience, and Quality Jobs Fund, develop and adopt poverty-reducing labor standards that satisfy the requirements for high road, quality jobs, and economic equity, as defined in Section 14005, for all investments made by those agencies using those moneys.
(2) All state agencies subject to paragraph (1) shall report labor standards outcomes to the board.
(3) All local agencies administering moneys received pursuant to any federal jobs act on behalf of a state agency subject to paragraph (1) shall report to the state agency any information necessary for the state agency to comply with the reporting requirement in paragraph (2).
(b) The board may develop rules and regulations on the content and manner of reporting for the report required by paragraph (2) of subdivision (a).

SEC. 4.

 The Legislature finds and declares that ensuring transparency and adequate oversight of state and federal funding is a matter of statewide concern and is not a municipal affair as that term is used in Section 5 of Article XI of the California Constitution. Therefore, Section 3 of this act adding Chapter 5.2 (commencing with Section 14535) to Division 7 of the Unemployment Insurance Code applies to all cities, including charter cities.

SEC. 5.

 If the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code.