Urgency legislation creates new expedited workshare program processes

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On September 28, 2020, Governor Newsom signed AB 1731 as urgency legislation that took effect immediately. This bill, among other things, adds Section 1279.7 to the Unemployment Insurance Code to create an expedited process for employers to be approved for work-sharing programs. The bill states that, according to many economists, work sharing programs are much better options than laying off workers, as these programs keep workers in their jobs, let employers cut their hours, and provide for benefits that allow workers to backfill their lost wages.

Currently, California employers may apply to participate in work-sharing programs as a temporary alternative to layoffs if the business’ production or services have been reduced. This program helps employers minimize or eliminate the need for layoffs in nearly all types of businesses and industries and allows employers to keep trained employees, quickly recover when business financial conditions improve, and avoid the cost of recruiting, hiring, and training new employees. With such programs, both full-time and part-time employees whose hours and wages have been reduced can receive unemployment compensation benefits, keep their current jobs, avoid financial hardships, and maintain health and retirement benefits.

AB 1731 provides specific processes for eligibility, approval and maintenance of work-sharing programs, and it requires an internet portal to be created to receive electronic applications by employers wishing to participate in, or renew participation in, the work-sharing program. Approved work-sharing plan applications submitted by eligible employers between September 15, 2020, and September 1, 2023, to participate in, or renew participation in, the work-sharing program, are deemed approved for one year, unless a shorter plan is requested and approved by the employer. These provisions will remain in effect until January 1, 2024, and as of that date are repealed, unless extended by a later enacted statute.