The 2020-21 Budget: Overview of Labor and Employment Programs

The 2020-21 Budget: Overview of Labor and Employment Programs Translate Our Website This Google ™ translation feature provided on the Legislative Analyst's Office (LAO) website is for informational purposes only. The LAO is unable to guarantee the accuracy of this translation and is therefore not liable for any inaccurate information resulting from the translation application tool. Choose your language: × Skip to main content Home --> Policy Areas Capital Outlay, Infrastructure Criminal Justice Economy and Taxes Education Environment and Natural Resources Health and Human Services Local Government State Budget Condition Transportation Other Government Areas Publications The Budget Propositions and Initiatives Staff Careers About Us Search LAO Contact Chas Alamo See More Publications Like This Back to the Top --> Tweet January 22, 2020 The 2020-21 Budget Overview of 2020 21 Labor and Employment Programs The 2020 21 Governor’s Budget includes 18 budget proposals related to labor and employment programs. This post provides a high-level overview of these proposals. Our office plans to evaluate several of these proposals more closely in the coming weeks. Background California’s major labor and employment programs provide work-related services and benefits to its residents, enforce its employment laws, oversee its workers’ compensation system, and regulate its workplace safety and health. Many of the work-related services and benefits are funded or required by the federal government, including unemployment insurance benefits and federal workforce training programs. The labor and employment programs are administered at the state level by the Employment Development Department (EDD), the Department of Industrial Relations (DIR), the California Workforce Development Board (CWDB), and the Agricultural Labor Relations Board (ALRB). The state’s Labor and Workforce Development Agency oversees these entities and works to set policy and coordinate programs. Labor and Employment Program Budget. As shown in Figure 1, the Governor’s budget proposes a total of $1 billion in state funding for labor and employment programs, including $148 million from the General Fund and $887 million from various state special funds. Figure 1 Labor and Employment Departmental Budget Summary 2020 21 Governor’s Budget, General Fund and Special Funds (In Millions) Program 2019 20 Estimated 2020 21 Proposed Change Amount Percent Labor and Workforce Development Agency $3 $4 $2 77% Employment Development Department 97 121 25 26 California Workforce Development Board 52 12 40 76 Department of Industrial Relations 12 — 12 — Agricultural Labor Relations Board 10 10 — — Totals, General Fund $173 $148 $25 15% Labor and Workforce Development Agency $3 $12 $9 290% Employment Development Department 280 298 17 6 California Workforce Development Board 102 50 52 51 Department of Industrial Relations 629 664 35 6 Agricultural Labor Relations Board 11 12 1 5 Totals, All State Funds $1,025 $1,035 $10 1% Labor and Employment Budget Proposals As shown in Figure 2, the budget proposes a total of $127 million in new funding and 407 new staff positions within various labor and employment programs. Most of the proposed funding and positions are within EDD and DIR, the two largest labor and employment departments. In addition, most of the proposals are either ongoing program augmentations or three-year proposals. Overall funding for these proposals comes from a variety of sources, as shown in Figure 3, including $40 million from the General Fund, $26 million in disability program payroll taxes paid by employees, $25 million in increased workers’ compensation insurance assessments paid by employers, and $20 million in proceeds from Private Attorneys General Act lawsuit settlements. Figure 2 2020 21 Governor’s Budget Labor and Employment Proposals Proposal Positions Cost (In Millions) Fund Source Duration Labor and Workforce Development Agency Create “Department of Better Jobs and Higher Wages” 10 $2.4 General Fund One time Labor Agency Strategic Outreach 24 20.0 Private Attorneys General Act settlements a Three years 34 $22.4 Department of Industrial Relations Worker Status—AB 5 Implementation 104 $17.5 Workers’ Comp assessments b Three years Wage Claim Adjudication Staff 15 2.3 Workers’ Comp assessments Three years Victims of Wage Theft — — No funding—Awaiting Trailer Bill Unknown Financial and Administrative Compliance 33 8.7 Various Three years Health and Safety Legal Workload 7 1.2 Workers’ Comp assessments Ongoing Increased Office Security — 2.3 Workers’ Comp assessments Ongoing Amusement Ride Inspections 3 0.6 Workers’ Comp assessments Ongoing Implementation of Recent Legislation 16 3.3 Various Ongoing Update Workers’ Compensation Case Management 2 0.9 Workers’ Comp assessments Ongoing Safety and Health Appeals Board Staff 2 0.5 Workers’ Comp assessments Ongoing 181 $37.2 Employment Development Department Benefit Systems Modernization (Information Technology) 148 $46.0 General Fund and Disability Fund c Ongoing project Worker Status—AB 5 Implementation 24 3.4 General Fund Three years Accounting and Business Services 14 3.0 Disability Fund Ongoing Paid Family Leave Small Business Grants — 1.0 General Fund Ongoing Implementation of Proposition 64: Cannabis 7 3.6 Cannabis Tax Fund Ongoing 193 $57.0 California Workforce Development Board Entrepreneurship Pathways Grant Program — $10.0 General Fund One time Total, Labor and Employment Proposals 407 $127.0 a The Private Attorneys General Act allows employees to recovery penalties for labor code violations. The state collects a portion of these settlements. b Annual assessments paid by businesses based on a percentage of their workers’ compensation insurance premium cost. c Unemployment Compensation Disability Fund, the fund used to finance the state’s temporary disability and paid family leave benefits. Figure 3 Funding Sources—Labor and Employment Proposals 2020 21 Proposals (Dollars in Millions) Fund Amount Share General Fund $40 32% Unemployment Compensation Disability Fund 26 21 Workers’ Compensation premium assessments 25 20 Private Attorneys General Act settlement funds 20 16 Various mixed funding 12 9 Cannabis Tax Fund 4 3 Totals $127 100% Subscribe | California State Legislature | Online Voter Registration | Privacy Policy | Accessibility Legislative Analyst's Office | The California Legislature's Nonpartisan Fiscal and Policy Advisor 925 L Street, Suite 1000 Sacramento, CA 95814 | (916) 445-4656