While signing a host of new state laws that businesses warned will harm the state's economy, Gov. Gavin Newsom vetoed a bill that would have provided unemployment benefits to striking workers, which business leaders and others warned would have only encouraged and worsened strikes, and inflicting unnecessary damage on the state's economy by giving striking workers even less of a reason to leave the picket lines.
The law, known as SB 799, would have allowed people to resume getting pay after two weeks off the job.
Following the veto, it isn’t clear if the bill may be brought back again.
SB 799, authored by state Sen. Anthony Portantino, D-Burbank, and co-sponsored by the California Labor Federation, was vetoed late last month.
“A lot of statements by proponents were that employees should be on a level playing field, they implied that this was money owed to them, that they paid into it,” Chris Micheli, an industry lobbyist and adjunct professor at University of the Pacific McGeorge School of Law, told the Northern California Record.
But Unemployment Insurance (UI) is an employer-paid program; it’s not like State Disability Insurance (SDI) where taxes automatically get taken out of a paycheck.
Micheli said legislators expressed concerns that employers – unable to provide products or services due to striking workers – would have an incentive to be at the bargaining table, but what would be the motivation for the striking worker if they are getting paid anyway.
“It would essentially tip the balance in favor of the worker, while the employer would have more to lose,” Micheli said. “If they had passed this bill, what would have been the economic incentive for the striking worker – it’s not a whole wage replacement, but it’s better than any strike fund money that’s been set aside.”
The Senate Floor Analysis notes that SB 799 may have added upwards of $200 million to the Unemployment Insurance deficit.
The Assembly Appropriations Committee described other fiscal effects: “The magnitude of the impact is difficult to predict, but ultimately depends on the number of strikes that occur, the duration of the strikes, and the number of impacted employees. According to data from the Bureau of Labor Statistics, which tracks strikes involving at least 1,000 workers, there were at least 56 strikes in California from 2012 to 2022.”
More than 130 business organizations registered opposition to the bill.
There was significant lobbying by the California Labor Federation and national labor leaders, Micheli said.
In a previous iteration, the measure allowed strikers to qualify for pay after four weeks, but this year’s bill cut it to two weeks.
“The last time this was tried in 2019, in AB 1066, ironically, the author was Lorena Gonzalez, then Assemblywoman, who is obviously now the head of the California Labor Federation and the sponsor of SB 799,” Micheli said.
In 2019, pre-Covid, the Unemployment Insurance fund had a $3 billion surplus, but it is now roughly $20 billion in debt.
Still, Portantino and other legislative supporters may reintroduce the bill next year.