California Assembly Bill AB805

California 2019-2020 Regular Session

• Introduced: 2/20/19
• Refer: 3/7/19
• Report Pass: 3/27/19
• Refer: 3/27/19
• Report Pass: 4/2/19
• Refer: 4/3/19
• Report Pass: 4/10/19
• Engrossed: 4/25/19
• Refer: 4/25/19
• Refer: 5/8/19
• Report Pass: 6/25/20
• Refer: 6/25/20
• Refer: 7/1/20

Caption

Unemployment insurance: contribution rates.

Impact

The impact of AB 805 extends to the Unemployment Fund, with provisions to temporarily suspend the emergency solvency surcharge for the 2021 calendar year if the fund's balance falls below a specified threshold. This change is pivotal as it allows employers to avoid additional financial strain and preserves jobs during the economic recovery period. The legislation also includes requirements for state agencies to transparently report any submissions to legislative committees, thereby improving accountability in the handling of unemployment funds.

Summary

Assembly Bill 805 aims to address unemployment insurance contribution rates for the year 2021, by ensuring that contribution rates for employers and self-employed individuals do not exceed the rates that were in place during 2020. This bill recognizes the economic strain imposed by the COVID-19 pandemic, which forced many businesses to downsize significantly, leading to increased unemployment. By capping contribution rates at the previous year's levels, the bill seeks to mitigate the financial burden on employers during this challenging time, thereby promoting employment retention.

Sentiment

The sentiment surrounding AB 805 appears to be largely positive among supporters, primarily composed of legislators who aim to protect jobs and businesses from additional costs during a time of crisis. However, there may be some contention from fiscal conservatives who may view the suspension of the emergency solvency surcharge as a threat to the financial health of the Unemployment Fund in the long run. The urgency with which the bill was introduced indicates a strong consensus on the need for immediate action to support the workforce and economy.

Contention

Despite its favorable reception, AB 805 raises important discussions about the sustainability of unemployment insurance funding and the long-term implications of capping contribution rates. Critics may argue that such measures could lead to a reduction in the fund's robustness, particularly if economic conditions do not improve as anticipated. Additionally, the requirement for public reporting by state agencies, while aimed at enhancing transparency, might introduce bureaucracy that some stakeholders find cumbersome.