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  • AB 1731 Provides Rare Win-Win Option for California’s Businesses and Workers During Economic Downturn

    By  Robert Moutrie  - October 12, 2020

    As the 2020 legislative season comes to a close, we can certainly say it has been a chaotic time for employers. One bright spot for employers was AB 1731 (Boerner Horvath; D-Encinitas), which the California Chamber of Commerce was glad to support and glad to see it signed by Governor Gavin Newsom with an urgency clause, meaning it went into effect immediately on September 28.

    Generally speaking, AB 1731 streamlined the application process for California’s under-used Work Share Program. For those unfamiliar with the program: the work share program allows employers to save on payroll costs during economic downturns—but still avoid—by submitting a plan to the Employment Development Department (EDD) that must meet certain requirements.

    Broadly, these plans allow employers to, in exchange for avoiding layoffs, reduce hours and allow workers to retain health coverage (if applicable), and access to unemployment insurance (UI) benefits to supplement their decreased wages. In other words—this allows employers the option of providing partial unemployment insurance payments and various other benefits, while simultaneously reducing hours and cutting costs during an economic downturn. Again, this is a totally optional program—but it allows many employers to find a middle path: both saving on payroll in tough times, and also retaining employees and allowing them to access critical benefits.

    Though California’s Work Share Program dates back to the 1970’s, it has long been underused. AB 1731 should help address that problem. AB 1731 accelerates the approval process (which previously could take months) through a range of measures, including providing for automatic one-year approval of all applications from September of 2020 until September of 2023.  Read More