Bill to Streamline UI Claims and Hold Corporations Accountable to Pay Their Fair Share Reaches Governor’s Desk

Monday, August 31, 2020

SACRAMENTO – (Tuesday, Aug. 31, 2020) – Today, a bill authored by California State Assemblywoman Lorena Gonzalez (D-San Diego) to speed up the process for workers to claim unemployment insurance (UI) benefits, while making sure corporations pay their fair share of the UI contributions, passed the State Legislature. Assembly Bill 1066 now heads to the governor for possible signature or veto.

“When businesses operate in bad faith to improve their bottom line, it weakens our state’s unemployment insurance system,” Assemblywoman Gonzalez said. “After years of large corporations like Uber and Lyft breaking the law and avoiding UI contributions on behalf of their workforce, our state UI fund is operating at a loss. We cannot allow multi-billion dollar corporations to continue skirting the law at the expense of their workers, and forcing law-abiding businesses and taxpayers to pick up these costs.”

Streamlining UI Claims

With millions of UI claims flooding EDD and gig companies continuing to misclassify hundreds of thousands of Californians who are now without work, many workers have been on hold indefinitely waiting for their benefits after they filed UI claims as early as March and April of this year. Under AB 1066, if the required records are not turned over to EDD within 10 days then, it is presumed the worker is entitled to the maximum benefit amount, allowing their claim to move forward.

Recovering Owed UI Contributions 

Widespread misclassification threatens the solvency of the state’s UI fund when employers evade their obligation to make contributions on behalf of their workforce, while their workers are eligible for benefits. A recent UC Berkeley Labor Center report found if just two gig companies in the state, Uber and Lyft, had correctly classified their drivers as employees between 2014 and 2019, they would have paid at least $413 million into California’s Unemployment Insurance Fund. 

California was the first state to be approved for a $10-billion loan from the federal government to cover the rising cost of those benefits. Once the economy recovers, law-abiding businesses across the state will face higher tax contributions and be forced to subsidize companies that do not report their workers’ wages or pay into the UI fund. 

AB 1066 would authorize the Attorney General to recover unpaid UI contributions, including interest and penalties, from large corporations that have at least five workers who have collected UI benefits.

For questions on AB 1066 or to schedule an interview with Assemblywoman Gonzalez, contact Sami Gallegos: samantha.gallegos@asm.ca.gov