SACRAMENTO — AB 1731, a bill authored by Assemblymember Tasha Boerner Horvath (D-Encinitas) to incentivize businesses’ participation in the state’s Work Share Program and to expand the number of workers covered under partial unemployment assistance was signed by Governor Gavin Newsom.
Under California’s unemployment insurance Work Share Program, businesses are able to reduce employees’ hours and wages as an alternative to layoffs as eligible workers receive prorated unemployment benefits to replace lost wages. Businesses retain valuable, trained workers on staff and workers keep their jobs and their benefits.
“Our state is facing two parallel and related catastrophes,” said Assemblymember Boerner Horvath. “We will eventually defeat the health crisis if we follow public health orders and continue working towards an eventual vaccine or therapeutic. However, unless we act quickly to protect the health of our businesses and the resiliency of our workers, we run the risk of deepening and lengthening the economic crisis. AB 1731 puts us on track to meet these goals — it’s a win for business, a win for workers, and a win for California.”
Despite the benefits of participating in the program, work-sharing has been widely underutilized because the application process can be slow, forcing businesses to layoffs as they wait for their application to be approved. Less than 1% of initial UI claims in California since the beginning of the pandemic have come from Work Sharing, whereas Michigan is at 7.4%.
To address this, AB 1731 creates a temporary, simplified work-sharing application process requiring EDD to deem all program applications approved upon receipt and send employers their claim packets electronically within 5 days after the application is approved. It also instructs the EDD to collaborate with the Governor’s Office of Business and Economic Development and the I-Bank on strategic methods to make sure employers are aware of the benefits of the program.
“Surviving the continuing economic fallout due to the coronavirus could be greatly improved by employers' participation in the State’s Work Share Program to help them retain a portion of their workforce and bring back laid off employees as the economy improves,” said Till von Wachter, UCLA Economics Professor and Director of the California Policy Lab at UCLA. “With potentially millions of dollars in underutilized federal funding available to accomplish this expansion, now is the time to put Work Sharing on the map to help struggling businesses and working families stay afloat throughout the recession and recovery.”
The bill contains an urgency clause, which means it goes into effect right away instead of at the beginning of next year. This allows California to take advantage of CARES Act funding available for states to use towards implementation and administration of short-time compensation programs before the end of the year.
Now that it has been signed, AB 1731 takes effect immediately.