A California Chamber of Commerce-opposed job killer bill that would charge employers to provide unemployment insurance (UI) compensation to striking employees during labor disputes awaits action in the state Senate next month.
AB 1066 (Gonzalez; D-San Diego) overturns more than 70 years of precedent and creates solvency issues for California’s UI system by providing unemployment benefits to striking workers even though they are not looking for work and have a job waiting for them once the labor dispute is resolved.
The bill would allow employees on strike to receive UI benefits if the strike lasts more than four weeks, and contains no end date or qualifications for the receipt of such benefits, meaning that benefits would continue for up to 26 weeks for the entire union, regardless of the facts of the labor dispute.
The CalChamber identified AB 1066 as a job killer because it will expose employers to a significant cost increase during a time in which they are already struggling with the financial impact of labor negotiations and a strike, thereby jeopardizing the employers’ ability to maintain existing jobs and wages as well as the increased wages and benefits demanded by the union.
AB 1066 potentially adds the entire membership of striking unions to UI benefits for an employer, creating unpredictable and considerable ongoing costs in the event of a strike. Whereas a business with 100 workers might previously have paid for 3–4 employees’ UI benefits at any given point, AB 1066 creates the potential for hundreds of simultaneous claims on that very same employer, multiplying UI costs tenfold. This cost applies equally to public entities, such as school districts, which also pay for UI benefits, although their repayment method differs from private businesses. For this reason, the Assembly Appropriations Committee staff estimates AB 1066’s costs could go as high as $6 million per year for California businesses and public entities. Read More