Golden State Today

The California Chamber of Commerce has officially designated SB 1116 as a job killer due to its potential impact on employers and the state's Unemployment Insurance (UI) Fund. The bill, introduced by Senator Portantino, has raised concerns regarding the financial burden it may impose on businesses across California.

According to the California Chamber of Commerce, SB 1116 proposes a requirement for employers to subsidize striking workers through additional taxes paid to the UI Fund. This measure, if implemented, would not only increase taxes on employers but also jeopardize the stability of California's UI program, potentially violating federal law.

The Chamber highlighted that SB 1116 mirrors last year's SB 799, which faced similar criticism and was ultimately vetoed by Governor Gavin Newsom. The concern over the accumulation of debt in California's UI Fund is particularly significant this year, given the state's current budget challenges.

Furthermore, the Chamber expressed apprehension that SB 1116 could exacerbate the existing $20 billion debt in the California UI Fund, which has accumulated due to the impacts of the COVID-19 pandemic and subsequent economic downturn. This debt has already led to increased UI taxes for employers, with projections indicating continued tax hikes until around 2032.

In addition to the financial implications for employers, SB 1116 is expected to add to the state's General Fund obligations related to the UI Fund. The Chamber pointed out that the interest payments on the outstanding debt are projected to increase, with estimates reaching $331 million in the 2024–2025 budget cycle.

The California Chamber of Commerce's opposition to SB 1116 underscores the potential risks associated with the bill, emphasizing the importance of addressing the financial challenges facing the UI Fund to safeguard the interests of employers and the unemployed in the state.