After an identical bill was vetoed by California Gov. Gavin Newsom last year, lawmakers are again considering allowing workers involved in trade disputes to collect unemployment benefits.
At issue is Senate Bill 1116, authored by Sen. Anthony Portantino, which would authorize workers striking or locked out from jobs to receive unemployment insurance benefits, including cash payments, after a two-week waiting period.
Its future is uncertain, though, as the Senate’s Appropriations Committee on May 6 placed the measure on the suspense file, where some bills “go to die in silence,” according to legislative analysts. A decision is expected in the coming weeks to determine if it will move forward.
The author said that since New York and New Jersey offer similar benefits, California should as well.
“We’re back again this year with this appropriate measure to help our working families,” Mr. Portantino said during the Senate’s Labor, Public Employment, and Retirement Committee hearing on April 24. “Other states have done it, and guess what, the sky didn’t fall in, mayhem didn’t happen.”
He suggested that strikes are never taken lightly but are used by workers to earn fair compensation and that benefits should be provided to allow families to get by financially during difficult times.
“To offer unemployment benefits for those on strike for two weeks seems like a humane, dignified, appropriate thing to do to allow people to put food on their table, pay their rent, and have a modicum of subsistence,” Mr. Portantino said. “No one goes on strike because they want to, no one goes on strike as a first resort, it’s typically a last resort.”
Supporters said businesses use workers’ lack of compensation and inability to pay bills as a tool to force negotiations during trade disputes.
“Workers deplete their savings as bills pile up, rent and mortgages go unpaid, and debt accumulates,” the California Labor Federation said in legislative analyses. “Corporations rely on the expectation that striking workers will have few resources, and their strategy is often to starve workers until they give up their demands for better wages, fair compensation, and job security.”
Proponents argued the bill would not significantly increase the dollar amount of benefits paid—which totaled about $5 billion in 2022 and are expected to increase to about $6.7 billion in 2024, according to the state’s Employment Development Department.
Established in 1935, the unemployment insurance program is a federal-state provision of weekly benefits—for up to 26 weeks—for employees that lost their jobs through no fault of their own and who are actively seeking new employment.
Since March 2020, the state’s employment department estimates that 31.5 million claims were filed, with more than $194 billion in benefits paid out.
The U.S. Bureau of Labor Statistics calculated 15 strikes in California last year involving at least 1,000 workers.
Critics argued that some workers could be incentivized to strike or hold out for higher wages if they could receive unemployment benefits, thus potentially encouraging trade disputes.
“SB 1116 would change incentives around striking,” the California Chamber of Commerce and a cohort of businesses said in legislative analyses. “Though striking workers presently may access union strike funds and other resources, [this bill] would add a new pool of income ... and thereby change the financial calculus around a strike.”
The groups said the bill was a “job killer” that would unfairly force all employers to subsidize benefits for striking workers
“[This] creates a fundamental unfairness by forcing employers with absolutely no involvement in any strikes to pay for labor disputes that they have no involvement in,” the groups said.
Also of concern is the state’s unemployment insurance fund’s insolvent status—with about $20 billion owed to the federal government after fraud and increased claims during the pandemic overwhelmed the state’s capacity to pay benefits and left the fund with a steep deficit.
Employers are paying the price for the deficit, with taxes increasing annually by $21 per employee—with payments expected to continue until approximately 2034—to help cover the debt.
Supporters of the bill argue that existing debt will not be impacted by the measure.
“We agree that this issue requires attention, but the structural insolvency of the UI Fund is no excuse to deny striking workers and their communities the benefits they have earned,” proponents said in legislative analyses.
In vetoing the identical Senate Bill 799, also authored by Mr. Portantino, last year, the governor cited budget constraints and concern about the state’s federal debts.
“Any expansion of eligibility for [unemployment insurance] benefits could increase California’s outstanding federal [unemployment insurance] debt projected to be nearly $20 billion by the end of the year and could ... significantly [increase] taxes on employers,” Mr. Newsom wrote in his veto letter. “Now is not the time to increase costs or incur this sizable debt.”
More than 150 groups are opposing the bill while 16 are listed by the Legislature as supporters.
