CALIFORNIA – Governor Gavin Newsom vetoed a bill, on Saturday, that would have provided Unemployment Insurance (UI) benefits to striking workers. 

“Any expansion of eligibility for UI benefits could increase California’s outstanding federal UI debt projected to be nearly $20 billion by the end of the year and could jeopardize California’s Benefit Cost Ratio add-on waiver application, significantly increasing taxes on employers,” said Newsom.

He goes on to say that the state is responsible for the interest payments on the federal UI loan and to date has paid $362.7 million in interest with another $302 million due this month.

“Now is not the time to increase costs or incur this sizable debt,” said Newsom.

Hot Labor Summer

According to Cornell University’s Labor Action Tracker, there have been 64 labor strikes in California so far this year. 

Senator Anthony Portantino introduced Senate Bill 799 – Striking Worker Bill because existing law and case history currently prohibits striking workers—and some locked out workers—from being eligible for UI benefits. 

RELATED: 34 small business grants to apply for in 2023

The California Chamber of Commerce opposed the bill stating that it would effectively require employers to subsidize striking workers – even if those workers or labor strikes had nothing to do with the employer.

“Unemployment insurance (UI) payments are intended to assist employees who, through no fault of their own, are forced to leave their employment. Federal law sets out the basic requirements for individuals to qualify, including being “ready and willing to immediately accept work” and “totally or partially unemployed,” and “actively looking for work,” said the August 2023 coalition letter.

The coalition said by forcing employers to pay UI payments to striking workers, SB 799 would also raise taxes on employers across California, overturn more than 70 years of precedent, and put California’s UI program at risk of violating federal law.