Governor vetoes bill because trust fund 'vulnerable to insolvency'
No, striking workers will not get the benefit of unemployment insurance (UI) after the first two weeks of unemployment due to a trade dispute.
This is after California Governor Gavin Newsom vetoed Senate Bill 799 on Saturday. Giving the benefit could be detrimental to employers, he said in his veto message.
“Now is not the time to increase costs or incur this sizable debt,” he said.
California employers fund UI benefits through contributions to the state's UI Trust Fund on behalf of each employee. However, The UI financing structure has not been updated since 1984, which “has made the UI Trust Fund vulnerable to insolvency,” said Newsom.
“Any expansion of eligibility for UI benefits could increase California's outstanding federal UI debt projected to be nearly $20 billion by the end of the year and could jeopardize California's Benefit Cost Ratio add-on waiver application, significantly increasing taxes on employers. Furthermore, the state is responsible for the interest payments on the federal UI loan and to date has paid $362.7 million in interest with another $302 million due this.”
In mid-September, California’s Senate passed Bill 799, which would grant striking workers access to UI benefits of up to $450 per week.
The bill – Introduced by State Sen. Anthony Portantino (D-La Cañada Flintridge) – had unions and the U.S. Chamber of Commerce on opposing sides.
A couple of stakeholders expressed disappointment over Newsom’s action on the bill.
“This veto tips the scales further in favor of corporations and CEOs and punishes workers who exercise their fundamental right to strike,” said Lorena Gonzalez Fletcher, executive secretary-treasurer of the California Labor Federation. “At a time when public support of unions and strikes are at an all-time high, this veto is out-of-step with American values.”
Portantino shared the same sentiment.
“I am disappointed in the Governor’s veto of SB 799. The labor unrest and concern we all witnessed this summer earned the Legislature’s action to pass unemployment benefits for striking workers. The need continues and so will efforts to make this the law in California. The hardworking women and men in California need to put food on their table and pay their rent. SB 799 would have injected a small piece of security to working families that is needed and deserved.”
He, however, hopes to reintroduce the legislation and hopes to work with the administration on “a financial plan to fix the fund for the long term.”
“The need continues and so will efforts to make this the law in California,” he said, according to a report from The Los Angeles Times. “The hard-working women and men in California need to put food on their table and pay their rent.”
After a summer of strikes across California, Bill 799 would have seen employees engaged in trade disputes supported financially, according to unions.
