Senate Budget and Fiscal Review Subcommittee No. 5 on Corrections, Public Safety, Judiciary, Labor and Transportation
No chapters available yet
Legend
Transcript markers
- text Sentence being played
- text Search result
- text Intervention cited by the link you opened
Click a sentence to play the video from that moment. Select text to quote it with the speaker, timestamp and link.
More options
Speaker 4
Thank you. Good morning, madam chair, members of the committee. My name is Nancy Farias. I'm the director of the employment development department. Thank you for the opportunity to share our progress on EDD's modernization efforts.
EDD plays a vital role in the lives of California's workers. Nearly every worker interacts with us at some point, whether they've lost a job, are caring for a new child, or are dealing with a serious illness. In these moments of uncertainty, we are here to help. I'm grateful to the administration and the legislature for their support, and, of course, to our nearly 9,000 employees who deliver these services every day. We are often asked about our readiness for a recession, and I want to assure you that we are prepared.
Thanks to senator Laird, the recession plan ensures we are ready to respond quickly to any economic downturn. This preparedness is at the core of e d d next our top to bottom modernization effort as the chair mentioned. We've made real progress it's never been easier to apply for benefits customer satisfaction for disability and paid family leave has increased significantly since 2023 ninety one percent of unemployment customers say filing a claim is on online is easy with ninety six saying the same thing for certifying for benefits. We continue to expand self-service tools so customers can get updates on their claims online through our live chat in the top eight languages. Our new call center platform for disability and paid family leave has improved information access and allowed staff to focus on complex cases.
Over a million customers used these tools last year. We've also streamlined our online applications, modernized our website, strengthened identity verification and fraud prevention, and taking taking major steps towards updating our decades old core benefit system through the integrated claims management system that I believe we'll be talking about today. Language access remains a priority with two forty six vital forms translated into 14 languages and new tools to translate fraud hotline messages in minutes. And we are improving services for employers as well, including stronger security, simplified payroll tax systems, and a modernized job search portal. These improvements reflect just a small part of the work happening at EDD.
We remain committed to continuous improvement, transparency, and delivering better services to Californians. Thank you for your support. I'm joined, as as the chair mentioned, by Ajit, our CIO, and Caleb, our CFO, and we are happy to answer any questions. Thank you.
Speaker 5
Good morning. Chaz Alamo with the Ledge Analyst Office. As the director mentioned, EDD Next is a wide ranging ambitious project to not only update technology components at EDD, but also process changes. A few points that we want to make here in today's hearing is that as it enters its fifth year, the project has completed many of its components. The one outstanding item is also the most challenging and most costly.
This is the integrated claims management system, sort of the backbone for EDD Next, that will bring the three programs together. We pointed out last year and we continue to believe that now is the time for the legislature to elevate its oversight of the EDD next project because we're now in this critical phase. One recent change that's worth bringing to the subcommittee's attention is that the department with the presentation of this year's budget change proposal has proposed to move forward with the integration for paid family leave and disability insurance first, and then to afterward integrate the system for unemployment insurance. Sounds like a small change and it may be, but for the first five years of the project, the three programs were to be integrated at the same time. And so this subtle shift is just an indication that now is the hard part, and we encourage the legislature to exert additional oversight from here toward the end of the project as we work through the final stages.
Thank you.
Speaker 6
Good morning. Thank you, madam chair. I have a sort of broader question and then a couple of very specific ones. The project date has moved from 2029 to 2031. So what's the current total estimated cost at completion?
And and what are the assurances? How can you assure us that the department will reach the 2031 date? Is that realistic given the history of of delays?
Speaker 7
Thank you, madam question. I apologize. ICMS project is a five year project, and the reason for the delay that you mentioned is the procurement. Procurement timelines are driven by not only by state, but the participating vendors as well. So the project was the contract was awarded earlier this year, and the delay was attributed to the time it took during the procurement, which went longer.
EDD is fairly confident in delivering this project on schedule. What we have done is we have strategically divided this project into two phases. Phase one is focusing on DI and paid family leave, which will be done in two years, which is a smaller portion. PI and PFL are easier programs to modernize as well. So we feel fairly good and confident in delivering that in the two years.
And the second phase of the project is focusing on unemployment insurance, which will be done in three years, and the total duration for the project is five years.
Speaker 7
Absolutely. What what Unity has done is learned from the lessons that through the pandemic by implementing over 200 projects. We have all the changes that director Fadius mentioned. For example, implementing chatbots, modernizing our call centers from complete to a completely different platform, implementing the changes that are directly impacting our customers, for example, making claim applications easier to complete and offering additional tools to paid family leave customers. Paid family leave customers before 2025 were even unable to log in and see the claim account balances.
Right now, they can. All these changes were done on time. They were complex changes. Especially for paid family leave program, it was a completely manual program. All claim processing was done manually.
Right now, 18% of the claims are done automatically. Given the history of delivering changes successfully, we feel confident that, yes, we can take on integrated claim management system as well and deliver it, you know, on time. I'll give you another big example. Document management system project, which is the second most complex in in our portfolio, is on time, and we have already completed roughly around 60% of the project on schedule and on budget.
Speaker 4
No. I I would just add because I can't help myself. I would just add that we're we have done all these projects, these large projects like this incrementally. So it's not this big bang where you flip a switch and it either works or it doesn't. The projects that we've talked about in the February, for example, that we've done during the pandemic for UI, they all have they all are they all benefit our customers, each individual one and it's not none of them is like, well, if that doesn't work, then this is not gonna work.
Know, we update we did chatbot, then we did, you know, automation of x y and z, know, things like that. So I think that that's that makes us feel as confident as we can feel.
Speaker 6
Great. Thank you. I I just wanna add that I was here before you became the director during the pandemic, and you've had to take on all the challenges of the pandemic, all the issues that came up with that. Everybody's just it was just out of control. So I just wanna applaud you for taking those solid steps as we move forward.
And every time I ask a question, it's right on. Thank you. Thank you. I have two very specific questions on s b ten ninety, which allows people to apply in advance Mhmm. For their paid family leave and and disability benefits.
Can you provide an update as to when it will be implemented as part of EGD next?
Speaker 3
Hi. Quinn Bunnell, legislative director at EDD. That project has been a priority for us as part of our initial go live that Ajit mentioned in 2028. So we that's when we expect it to happen.
Speaker 6
And then regarding October, can you provide an update on that, the language that will be used on those applications, and explain how the race ethnicity data will be will remain confidential and will not be used to determine program eligibility? I know that's a really specific question.
Speaker 7
Madam chair, we are on schedule for that project as well for that effort as well. They collect data demographic data from our claimants. We are making changes to our application. We are on schedule to make it happen as part of our existing systems as well, and the data will be made available on our website. Our old data will be made available so that confidentially for the claimants is maintained and not disclosed.
Speaker 8
Thank you. So I like a good senator have been here long enough, but I was in the assembly when this started during the pandemic. And and we were alarmed, basically, at what was our inability as a state to to deal with some of the the issues and the over impacts of of what happened during the pandemic. So when you were brought on, the I think the specific direction was, fix this. And, one of the bigger issues was the the fraud issue.
And so I'm I'm kinda curious what kind of you know, through this new programming and stuff if if I and I would imagine just by the natural occurrence of we're not dealing with a pandemic, so we don't have as much volume that the fraud would go down. Are there other pieces of this that have been helpful in reducing fraud and and what's our status as far as the more fraudulent or or questionable type of claims? And and if we're we're massively reducing that from the $30,000,000,000 or so that it was to to, you know, something that is more reasonable, which is not like, pretty much zero is reasonable, but I don't know. That's a hard number to get to. I
Speaker 4
I will just I'll just mention then Ajit can fill in some of the more technical blanks. But we I am really proud to say that we do not have criminal fraud anymore at in in the UI program. I want obviously, that was the PUA program, you know, based on federal regulations, which we complied with. But since September of of twenty twenty, we implemented ID. Me.
We have Socure. We have Thomson Reuters. We do an employer check. It's a little bit different as as you're aware. As you mentioned, the PUA program was a lot different than the UI program is now.
Speaker 55
And going forward, we are gonna continue to use these outside consultants and we or or I guess technology, outside technology as it is. And our fraud is we have as I mentioned, we have no criminal fraud. There is still, you know, based on what we can see, people who say that they are working when or they're they're not working when they are. And that that takes a a, you know, some time for us to go through, but it's nothing like it was before. And in that case, we issue an overpayment when there is an overpayment due, and we are fairly successful in collecting that because you cannot collect or any benefits from EDD if you are if you have an outstanding overpayment.
Speaker 8
So that's great because and that's great news because, you know, that was one part of it was stemmed the tie it's been stopped the bleeding. And and then the second part was the longer process that we're going through now. And and I think we're in unison where everybody agrees that I think we're making good progress and and that, you know, even though we have some bumps along the way that may be extended out a little bit further, we're doing the things that we need. You guys are doing the things you need to do to make that a functional department again and and make it so that it serves the needs of the people that need it. One of the things that was brought up, talked about the different vendors that we use.
And, you know, it had been around a long time. And and a lot of times, contracts start out at at this, and then because everybody wants to be the low bid. And and then later on, they they wind up like this. Have we had a lot of cost overruns or that are
Speaker 7
that Yeah. I can take that question, senator. I would appreciate that. I'll be honest. The change request and cost overruns are part of IT projects, and there are two primary reasons for that.
First is by the time we release the procurement, by the time we finish the PAL process, it takes, like, two to three years to get done with just the PAL. And during that period, technology changes and new legislature bills comes into play, and none of those requirements are captured in the RFP that's released, like, three years ago. Same thing happens with every single project. What what would that what happens is it end up being a change request for the vendor to work on. Well, we work very closely with the California Department of Technology for oversight perspective, the Department of Finance to minimize the change request that are coming out of as part of the ongoing active projects.
Okay. So far, EDD Next has been lucky. We don't have any big cost overruns. Yes. There has been change requests, but change requests that are within our budget authority to handle.
So no major cost overruns at this point in time.
Speaker 8
Okay. Thank you. Like I said, I think we're all willing to continue the quest and continue the investment that we need to make to make it happen. And I appreciate all the the work that you guys are doing and to create a department that we can all be proud of. So thank you.
Speaker 1
Thank you, senator Ciarda. A couple questions that I have here. Do the various projects under the EDD NEXT modernization integrate stress testing or other tools to ensure new system new systems can withstand claim levels like the state saw during the pandemic?
Speaker 7
Absolutely, madam chair. Yes. Every every product, every change that we make to our production systems goes through a very rigorous testing process that does include load testing and stress testing to make sure we can achieve the volumes at pandemic level. So in future, if there's ever influx of claimants coming to our website, we can we can sufficiently handle the the load from those claimants. So yes.
Speaker 1
Okay. And then building upon the last question of senator Ciardo, do you publish the change order items that are requested and then the additional funds and things that are required?
Speaker 7
Absolutely. All the change requests are well documented. They are approved by the by the various committees. We call it project committees. And then we have oversight from California Department of Technology, though that are presented to legislature's LA office as well, and Department of Finance if there is any additional funding needs associated with those change requests.
Speaker 1
My question was, do you publicize? Does the public have access to the change order requests that are made and the additional costs that are requested?
Speaker 7
So if the change requests are tied to a BCP, yes. Those will be included in the BCP and then that's the public document. If it is not tied to a BCP and if the money that is being spent on the change request is within the department delegation authority, then it is documented. But it's it's a document that can be made available to public through a PRA request or any such request that comes from public, but not from a EDD perspective. We don't publish those change requests that are within our delegation.
Speaker 1
So if you say that your change requests are done based upon the change in technology, how would other vendors know who had applied as mister Ciardo was explaining? How would they know that in fact it is just because of change of technology or just not because a vendor said, you know, I I need more money to complete this particular part?
Speaker 7
Thank you, madam Joe. Great question. So when the RFP is released, that's the equal playing level field for all the vendors. They bid on same requirements, same technology so that everybody has a equal chance. So let's a vendor let's assume a vendor a wins that project.
Now after that, if there is a change, then that change is properly vetted and evaluated by EDD management teams to see if it is a technology change we are asking, or is the legislature driving that change. For example, few of the bills that senator Drazo mentioned also, those are change requests for the vendor who are coming in. So then we look at, can the vendor absorb those changes without any additional cost to the project? In the scenarios where the project cost, schedule, or timeline goes beyond 10% of the initial allocation, that becomes SPR, and that's where all the control agencies, including Department of Finance and LAO gets involved.
Speaker 7
It depends on the total cost of the project, madam chair. So for example, if it is a document management system project, then the total dollar value for the project is 100,000,000. So then anything over 10,000,000 is a chain is a is a SPR. Also, there is a department delegation authority, is controlled by California Department of Technology. So for EDD, anything over 5,000,000, anything that cost that went over and above 5,000,000 becomes SPR for us that we have to completely follow the process to report it, properly document it, and get it approved before we give approval to the vendor to implement that change for us.
Speaker 7
So there there are seven work streams in this project. And for I'll talk about the the three most complex project first. So our integrated claim management system, started on
Speaker 1
question is specific to the change orders. How much additional Sure. Cost has been added?
Speaker 9
Yeah. Go ahead, Caleb. Thank you, madam chair. Caleb Burrow, admin deputy for EDD. I guess I would just point out, I don't think we have that exact figure right now.
We could definitely get that for you. But as far as any change orders have been done like Ajit's talked about, sometimes there are change requests that are done that have $0 value for any IT project. The overall cost for EDD Next, which is around 1,200,000,000 in total, that cost has remained unchanged through any subsequent change requests that we've done contractually. So the overall project cost has been unchanged.
Speaker 1
Well, but we could save some money too. There's nothing wrong with you don't have to spend 1,200,000,000, you know.
Speaker 1
disagree. We're kind of we're in situations here very dire, and so I realized that you may build into the contract. I did a little work in this area myself. You know, I I realized that what we call in the industry, you know, maybe pad the you know, let's say you think the project's gonna cost, you know, 1,000,000,000 and you add, you know, 200 you add 200,000,000 to that to make sure that it covers any potential change requests that you have. But I just wanna stress in these particular times, really in all times frankly, we shouldn't look at things just that you have 1,200,000,000.
We should look at minimizing as best as we can. And if you are and and if you notice several of us are asking the same same related questions, I think there needs to be more transparency given the amount of money that we're talking about. More transparency to the public of change orders that are being requested and approved, then thereby implemented and what are the costs associated with that. Because these were big time contracts. A lot of people were looking to participate.
And if it ends up that, you know, something that really should have been included that maybe another vendor would have or was including in their proposal, and then now someone else is getting more money for it, you can understand, I'm sure, the the concern that people would have.
Speaker 1
So can you provide maybe more public information about what has happened in the process regarding change orders and the additional amounts and what those have covered?
Speaker 1
Okay. Thank you. Building upon that, I wanted to ask what is the rationale behind moving the UI portion of the ICMS project to mandatory optional as a part of the vendor contract?
Speaker 13
Thank you, Madam Chair, for the question. Yeah. As was pointed out in in the opening and I think by LAO, by Chaz, ICMS, it still focuses on the replacement integration of all of the programs. It was a re phasing because of the emphasis being placed right now on DI and PFL and the amount of modernization that the department did during the pandemic in kinda right sizing UI. During the RFP process, EDD heard from multiple vendors that doing that, as Chaz had mentioned, all in one, all programs together would not be an ideal way to implement the project and they actually vendor a community expressed doing DIPFL first as opposed to UI because UI being more complex.
Speaker 9
So that would be another reason why we rephase the project. But I think we wanna ensure the committee that, you know, we still remain committed to implementing not only DIPFL as part of ICMS, but also UI on the back end. And that's still overall part of the the project plan documents. UI is included in there as part of that.
Speaker 21
Okay. The reason why I want to give you that opportunity is because you said you didn't you did it, but you didn't say why you did it. And so for the public who doesn't have the benefit of our analysis and all that, I thought it was important that you clarify the reason for that. My other question has to do with, and this one is a little more specific, during the 2024 and 2025 budget year, the department shifted phase two of the shared customer portal into the ICMS and IDM portion of the project. How does this project integration from those phases of a phase two objective such as enhancing the customer facing portal with real time identity project, enhance user administration, and enhance customer data analytics?
Speaker 7
No. Thank you, madam chair. Good question. So SCP shared customer portal is the portal that is a single door. It's a single entry for all our customers to come in.
Speaker 30
They log in through this portal. This portal was implemented in 2023, and we won the award for for this project in 2024 as well. The phase two of this project, which you you are alluding to, was to have a claim navigation where we would guide the claimant to which benefit they are eligible for by developing a a sub project as part of this. At the same time, we were doing market research for the integrated claim management system as well, it became crystal clear that the same objective of SEP phase two can be met in the ICMS project. And by shifting those requirements into ICMS, we saved state more than $20,000,000.
Speaker 7
So for that reason, the SCP was left as it is, and all those requirements were moved into into the ICMS project. Now your second question about how we are making sure that we provide the data and make sure the identity proofing is still done. None of that has changed. Our our commitment to make sure claimants are served best by providing the services that they're looking for will still be achieved as part of the integrated claim management system. The data that they're looking for will still be collected and saved as part of our shift towards integrated claim management system as well.
Speaker 1
Thank you. My last question has to do with it's my understanding, and you referred to it, that EDD is utilizing various contractors in their technology. For example, the state relies upon the third party vendors like Equifax, the work number, and TrueView to verify employment and income for benefits eligibility. How much is the state currently spending on these types of third party contracts? And what are the limitations of that data compared to what EDD collects directly through employer quarterly wage reporting?
Speaker 4
I we EDD So, does not use any of those. Think you know probably DSS or DHCS probably uses those, but we don't use those to collect wage data. The one limitation, and I I I believe you're probably talking about HR one and some of the work requirements. The one limitation that we have is we do collect from the employers quarterly, and it is my understanding, although regulations are not out yet from the federal government, that it is going to be required to to accept or to to collect that information monthly. So right now, there's a work group between EDD and health and human service agencies that are also implementing HR one to try to figure to close that gap, basically.
Speaker 1
Okay. Thank you very much. Thank you. With that, no further questions. Yes.
Senator Durazza.
Speaker 6
Just a question about s p five ninety. And you'd have to provide it now, but information about that refer that addresses the equity concerns that which partially or mostly led to SB five ninety being passed, which would help us understand do we need more outreach programs? Do we need more education? Because that was specifically addressing the lower use of the program by low income and immigrant communities. So if you could provide that information on.
Thank you. Thank you, madam chair. Alright. Thank you.
Speaker 1
Thank you. That concludes issue number one. We're now gonna move to issue number two, which is related to the request for additional operational resources with the As I stated, public comment is done at the end of the hearing for all issues. Thank you. Issue two is related to the request for additional operational resources with the following panelists.
We have the executive director of c w CWDB. We also have the deputy director of operations and policy implementation and branch of the same department. And then we have the Department of Finance and also the LAO's office. Please begin with your presentation.
Speaker 11
Actually, I'm the chief deputy, Joelle Ball. And director Perrero sends his sincere apologies that he could not be here today with you. Okay. But I am here. And I will just give a brief overview of the CWDB for before I turn it over to Emily Sunejara, who is our operations director, to cover the two issues.
The California Workforce Development Board is the body responsible for assisting the governor in the development, oversight, and continuous improvement of the California workforce system, especially now to meet the needs of the twenty first century economy and workforce. Established by the workforce investment act of 1998, the workforce development board supports statewide partnership building between employers, local workforce development boards, education, community organizations, labor unions, and workers to increase job quality, opportunities, and career advancement pathways for all Californians. Our goal is to work in collaboration with various regions in California and their local boards. There are other depart our other departments in the state, our agency, and the governor to shape workforce policies, programs, and investments that will strengthen California's economy. Thank you.
I'm happy to answer any questions and I will turn the items over to Emily.
Speaker 12
Thank you. I'm Emily Sunahara, the deputy director of operations and policy implementation for the workforce development board. Regarding our budget request our governor's budget request for additional resources to support the operations of the board. This proposal outlines a plan reduction after over the next five years to bring us back in step with our baseline funding. In fiscal year twenty twenty two twenty three, in response to a large influx of state funding, the CWDB expanded staffing to support the new grant workload.
This reduction is a natural response to that state funded workload coming to a close and our state funded grants becoming a smaller portion of our workload. I'm now open to any questions regarding this issue.
Speaker 5
Chaz Alamo with the LEO. The request for additional appropriations is sort of consistent with precedent on setting levels for acknowledging the the pandemic era uptick in grant authority going through CWDP.
Speaker 6
Couple of specific ones. One specific one has to do with the high road construction careers program at Caltrans. Is a $30,000,000 grant being administered by the by the board. But s p one fifty originally allocated 50,000,000 in federal funding for this purpose. So we have we now shifted to using state dollars instead of what was supposed to have been federal dollars?
That is correct. And could you explain why?
Speaker 13
Chair, if I may. Allison Hewitt, Department of Finance. I don't, unfortunately, don't think we have our Caltrans colleagues with us. We did have a discussion with the subcommittee with Caltrans where they presented the various reasons why the state funding is being used in lieu of federal funding. At a high level, I think there were concerns about eligibility of being able to use that federal funding, and I believe they provided some follow-up responses to staff that discussed the core question that was raised by the subcommittee, which is, well, where did the 50,000,000 go if this is 30,000,000?
And I unfortunately don't have those responses in front of me, but that is my understanding of the issue. I'm happy to try to answer any specific questions or take any feedback.
Speaker 6
Thank you. So the the the Workforce Development Board administers hundreds of millions of dollars in grant funds for programs that serve workers, and we wanna especially work with high road employers. You're now proposing a very dramatic elimination of the staff who work on these grants. So how do you see can you explain the impact that it's gonna have on the opportunities that these programs provide across California, especially for people who have faced significant barriers to employment. As as a contrasting example, GoBiz has a staff of a 194 to support grant and incentive programs for the business community.
So why would we downsize the department that has a responsibility for developing and improving our workforce system to a staff of 42? Very, very dramatic difference in there. So how do you explain going in that direction versus a direction where we should be doing more, not less?
Speaker 12
Absolutely. And thank you for that question. So all of our state grants to date have been one time funding. We staffed up in twenty twenty two twenty three as I mentioned as a response to a large influx of one time funding. Our statue indicates that we are a policy making or policy excuse me.
We advise the governor and assist the governor on workforce policy. So our primary purpose has not been impacted by these moves. Granting has been a one time ask of us, and we have been fulfilling the one time efforts related to the funding.
Speaker 6
Okay. That doesn't but there's a completely different direction that we're going in here. As far as the programs for the people of the state of California, the issue of workforce development comes up all the time. Mhmm. And there's even a scarcity of staffing.
We talk about that all the time. There's numerous examples of that. I I don't understand why we would be going in the opposite direction, but we can say in in the business community, which is great Mhmm. Have the have grants, have have the the staffing. But a 194 compared to a staff of 42 in workforce development just doesn't make sense.
Yeah.
Speaker 12
As you mentioned, the high road program is that is a one time funded grant program.
Speaker 6
Right. Whatever whatever it is, I'm talking about the direction. I'm talking about the direction of of, the workforce development board. The direction that we're going in without the resources means that these programs are not going to, in whatever fashion you you move them forward, it means that they're not gonna go forward, and we're gonna have less of that for the people who need it most, especially in this particular time. So I just wanna understand the the philosophy behind it or the thinking behind it, the rationale behind it, putting aside then, then we could talk about, okay.
This program needs money or this grant income, whatever the particulars are as far as funding. But the direction is so obvious here. I don't understand. Maybe someone else wants to respond to that, but Alice a dramatic change.
Speaker 13
I I I'll wait. Obviously, my my colleagues are much more knowledgeable about their programs. I'm Allison Hewitt, Department of Finance. I'll just add. And and I don't at the risk of of of reiterating what my colleague said, the these positions that are coming down were added for a specific purpose.
They are assigned to grant programs that are funded. So the high road training partnership program is is one that my colleagues speak to. Those staff are dedicated to providing technical assistance to grantees in those programs. As of now, there is no ongoing funding at the levels that were appropriated previously for CWDB. And so the proposal in front of you is to right size CWDB staffing because there's no longer a need for that staff to work on the specific programs.
Speaker 7
And it's done over a five year period, which so just to note there. I guess what I I I understand the the policy concerns is why would we why would the administration reduce staffing for workforce development? And I don't see that's not what the proposal in front of you is intended to do. We added these positions for a purpose. That purpose has is coming down because we had 850,000,000 added into their budget and that we have not seen those the structure lasted for years, and now there is no longer that funding available.
Speaker 13
And so I just that's for these I don't don't think there's any intent for the administration to minimize workforce development. There are so many initiatives the state is undertaking. For this particular entity. Funding staffing were added for these programs. These programs are finishing out their grant cycles, and and we wanna facilitate that.
There's additional resources to maintain staffing in the near term, which is is part of why there's funding, including general fund and a proposal in front of you. I don't know if that's helpful. Obviously, if we wanna increase the workforce development board staffing for other important policy initiatives, like, and to continue that work outside of the specific grant programs that were funded in the budget, that is a discussion between the administration and the legislature. So but just trying to decouple a little bit. I don't think we're walking away from workforce development efforts on a policy basis.
It's that these positions were added on a surge basis because so much funding was infused into CWDB's budget, and that that funding is now cycling off. So I'm happy to turn it over in case my colleagues have any other thoughts. But Yeah.
Speaker 12
Thank you for that. And that is an accurate assessment. And to Allison's point, the policies will always remain whether they are funded or not. At this point in time, we are seeing our grant programs are coming to a close. The funding that we were allocated is being spent by the grantees is coming to a close.
And so it is our point in time plan for what is in front of us.
Speaker 6
Okay. I don't wanna beat a dead horse, but the when you say the policies will always be there without funding, the policies are worthless. I mean, you can say that all you want, but if we're if we're not proposing funding for that, if we're not saying part of our budget proposal should include this, then you're basically saying this is gonna be the new policy. We're so that's the bottom line is without funding, it's not a reality. So let's not don't we make that part of go biz?
You know? Why don't we drop go biz down to 42? We don't because it's important. So that to me is the bottom line. Thank you, madam chair.
Speaker 8
Yeah. Just a quick follow-up question. Do you have the appropriate personnel to handle the load that you're required to do now for to to make the workforce development department work correctly?
Speaker 8
Okay. And and what the good senator was talking about was basically the part of the job that's no longer there. Mhmm. And so those employees, if we kept them on, be doing essentially overlap of what other employees are already doing, which would be an an additional expense that we would have to fund. We'd have to provide the additional funding that we're not we're not doing now because it's part of that grant part that grant funding.
Correct?
Speaker 12
We're responding to closing out of grant programs and those staff no longer being allocated to those.
Speaker 8
I just wanna make sure I was crystal clear. We do have the appropriate personnel now though.
Speaker 1
Thank you. The board is assuming an attrition rate of 10.5 positions per year resulting from this adjusted grant administration workload. What went into determining that attrition rate?
Speaker 12
Absolutely. This is based on historical attrition rates for the board as well as combined with an active hiring freeze.
Speaker 1
Okay. Which leads me then to my next question. One of the big discussions here on both sides, both in the assembly and the senate is this new new technology with AI and how are we going to prepare this next workforce to be able to participate? What do you see as the role of of your particular agency in your department in helping workers to prepare for that?
Speaker 26
Thank you, Emily. We are doing, engagement with with business, with our board members, through various meetings that we have on the calendar, to understand what the issues are and to help inform policy recommendations. We just don't have the grant funding to support any pilots or innovation or implementation through our department.
Speaker 1
So I'd like to encourage you to inform the committee if you could provide back to us what are the things that you're hearing in regards to AI. What do you see that your department is gonna need to do to assist the work force? It is going to be significant. CEOs are saying that we could potentially lose 50% of our workforce and yet people are gonna be doing different types of jobs. And so how are we going to assist with that if there are new ideas for other grant programs that we should be considering, partnerships with some of these companies to do apprenticeships.
I don't wanna do your job for you, but I'm assuming and if I'm assuming wrong, I'm asking if you would take a look at what are those things that you're being now asked to do in light of the influx of AI and how we might need to assist from a funding perspective or grant perspective or whatever it might be to deal with this coming down the road.
Speaker 1
you. Okay. Seeing no further questions or comments from anyone. Oh, that k. Okay.
Excuse me. I'm on Alka Seltzer and a bunch of stuff, so excuse me if I do a few sweeps of like that one, do a few slips there. That concludes issue number two. We're now gonna go to issue number three, which is streamlining reporting requirements, trailer bill language, continuing with the same panelists that we have here, which is kinda leading in to some of the subjects. Please move forward with your presentation.
Speaker 48
Alright. Thank you. The governor's budget proposes trailer bill language that would align the reporting requirement timelines relating to various grant programs, including requiring the Workforce Development Board to produce and submit a report to the legislature evaluating those grant programs by October 1 of every odd year. The bill would also establish new reporting requirements for the breaking barriers to employment initiative and the present to employment program if additional grant funds are appropriated for the purpose of those programs. And, the reason for this proposal is that currently, the California Workforce Development Board between all of its grant programs has about 10 to 12 annual and interim reports that we are managing delivery of.
Speaker 6
Just one question. The proposal adds reporting for breaking barriers to employment and prison to employment only if additional funds are appropriated. Given that the legislature's already investing in reentry workforce programs, why would reporting requirements be conditional on future appropriations rather than to exist existing funding?
Speaker 12
It is conditional on additional funding because both of those programs are closing out.
Speaker 1
Okay. Thank you. Senator Ciardo? Okay. I only had one question.
What is the total cost savings to the board for implementing and consolidating these reports?
Speaker 11
So for for 10 to 12 evaluations at between 500,000 and 700,000 each that significantly reduces and that doesn't include our internal staffing evaluation costs in partnership with external evaluators. So this streamlining will provide a consistent expectant timeline of when evaluation results will be provided and then also reduce costs.
Speaker 1
Thank you. Okay. Thank you. You didn't answer it. Alright.
Seeing no further questions, that concludes issue number three. We're now going to issue number four. Issue number four is the subsequent injury benefits trust fund, s I b t f, the trailer bill language and the workload of the b c p. We're joined by director Jennifer Osborne for opening comments for the department of industrial relations as well as the following panelists. We have Jazzy Grewald, the deputy secretary of legislation.
We have Joshua Iverson, the chief financial officer, and Ken Lau, chief counsel of DIR. And then we do have our representatives, Grace Henry, the finance budget analyst with Department of Finance. Allison has stayed with us and so has Chaz. We'll begin with you.
Speaker 15
Thank you, madam chair and members. My name is Jennifer Osborne. I am the director of the Department of Industrial Relations, also known as DIR. I was asked to just do a quick overview of the department, and then I'm actually gonna yield my seat to another program expert for the following issue just so that we have all the right people up here. As you know, DIR's core mission is protect and improve working conditions for California's nearly 20,000,000 workers while supporting the state's law abiding employers.
The department plays a central role in ensuring workers are paid the wages they are legally owed, maintaining works safe workplaces and supporting an act a level economic playing field. DIR is California's primary labor and workforce say workplace safety agency established in 1927. We administer and enforce laws related to wages, hours, and working conditions, workplace safety and health, apprenticeship, and workforce development, and workers compensation benefits not to be forgotten. DIR has nearly 4,000 authorized positions and an annual budget approach approaching $1,500,000,000. Collectively, we protect work protect workers, support employers in compliance, and help strengthen California's economy by addressing unfair competition and activity in the underground economy.
To deliver on this mission, DIR is made up of four key divisions through the labor commissioner's office also known as DLSE. Laws are enforced to ensure that workers are paid their earned wages, protected from acts of retaliation, and able to exercise their rights under the law. Through CalOSHA, workers are protected on the job through a combination of educational and enforcement efforts. CalOSHA ensures wake workplace safety standards are met, conducts inspections, responds to complaints, and provides consultation services. The division of workers compensation oversees the administration of workers compensation claims for injured workers with appeals adjudicated by the workers comp appeals board.
The goal of the division is to ensure timely benefits and support effective return to work outcomes for employees. And the division of apprenticeship standards also known as DAS supports apprenticeship programs across California and high demand industries creating pathways to good paying careers and helping build a diverse skilled workforce that strengthens the state's economy. DIR also carries out several cross cutting functions across the department that are often less visible but still critical to enforcement policy development and compliance. And, of course, we have a seasoned professional staff of administrative professionals who support all of the programs in very many different ways through technology and budgeting and accounting and all of the legal work and all of the kind of things that go with that. DIR remains committed to protecting workers, supporting compliant employers, and strengthening the economy, and we look forward to working with the legislature on shared priorities.
Thank you. I'm happy to answer questions, but as I said, I'm also gonna yield my seat to one of the people who are gonna be on the, panel for the next or for the item that you announced, is the subsequent injuries benefits trust fund, which is one of the administration's highest priorities in in getting reforms to this year. I will be in the audience.
Speaker 14
Good morning, madam chair and committee members. I'm presenting on issue four, the subsequent injury benefits trust fund trailer bill language.
Speaker 14
you. Over the last several years, there has been an unsustainable growth in the SABTF program's application, backlog, and liabilities that has led the program to become unmanageable. This unsustainable growth is causing long delays for workers and severe staffing challenges for the department. Between fiscal year twenty ten to 2014, around 800 new 850 new SABTF applications were filed per year. Last fiscal year, DIR received over 5,000 applications, a six fold increase.
So far this fiscal year, we have already received more than 5,500 applications. In fiscal year twenty twenty three, there were over 15,000 pending cases in the backlog. We expect the backlog to exceed 30,000 open claims by July, doubling the backlog in the past five years alone. Without amendments to the s I b t f statutes to slow the growth of cases and reduce s I b t f liabilities, DIR estimates total liabilities will increase to approximately $30,000,000,000 by fiscal year twenty nine thirty. This is a $7,000,000,000, increase from last year's estimate alone.
The impact on the employer assessment is expected to grow from 14,000,000 in fiscal year twenty fifteen to 1 and a half billion in fiscal year twenty nine thirty. Public self insured employer share has grown from 19,000,000 to 250,000,000 in that same time frame, and the state share is expected to grow from 3,000,000 to 44,000,000. The administration understands the importance of this important program to our most severely injured workers and has put forward a proposal to comprehensively reform the program to ensure its long term viability and availability. All the proposed reforms are included in the agenda on pages 16 to 18, and I can walk through these reforms in more detail if helpful to the committee. I wanted to focus on one critical provision that has generated questions, applying the reforms to the application and open cases in the backlog.
This provision is necessary to reduce liabilities and ensure long term viability of the program. And I just wanna make sure that, we're clear that applying the reforms to the application in open cases would not eliminate any benefits for an applicant who is currently receiving an award from SABTF. It will not require any applicant to start over or reapply. The reforms would not impose any mandatory timelines on applicants, and applicants would not need to take any additional steps unless they or their attorney choose to submit additional evidence. Applicants will remain in the process where they were before the reforms took effect.
Unlike some state and federal programs that operate a queue, SABTF does not. For SABTF, an applicant moves forward in the process once they have submitted all necessary information regardless of when they submitted their application. An applicant's case is considered open for several reasons. First, the applicant is missing required or requested information for their case. Second, one or both parties are conducting discovery where additional information may be sought by a case examiner to determine eligibility.
And third, the applicant or their attorney and SABTF have not agreed on a settlement or a workers' compensation judge has not determined an award amount. When an applicant files a claim, an award amount is not guaranteed. And only when a workers' compensation judge approves a settlement or issues an award for benefits is the applicant's case considered final. By not applying the reforms to the backlog, SIBTF liabilities across all employers by 2031 are projected to increase by $15,000,000,000. By applying the reforms to the backlog, we would be able to reduce liabilities across all public employers by $3,000,000,000.
More specifically, the state of California would reduce liabilities by $500,000,000. LA County and city would reduce liabilities by one by $900,000,000, and public education by $600,000,000. With these changes, the administration estimates that the growth of the program will return to manageable levels, ensure claims are timely processed for our most severely injured workers, and avoid increasing cost to public and private sector employers by billions of dollars over the long term. With these comprehensive reforms, California will be able to ensure the ongoing viability and long term availability of this important benefit. With me today to answer any technical questions are as Ken Lau, chief counsel at the department of industrial relations, Nicole Richardson, acting administrative director and chief counsel at the division of workers compensation, and judge Paige Levy, chief judge division of workers compensation.
Thank you for allowing me to make comments.
Speaker 17
Good morning thank you I'm Josh Iverson chief financial officer for the department of industrial relations just a few brief comments on the budget change proposal. The proposal is predicated on the comprehensive reforms included in the governor's budget With full implementation of statutory reforms and approval of this staffing request, DIR projects significant operational improvements. The additional staffing will allow examiner case loads to be reduced from the current 1,100 cases per examiner to the industry standard of about 500 cases per examiner. We'll reduce attorney court appearances from the current 180 per year to about a 150 per year, and accelerated case resolution reducing waiting time from the current five to ten years to about three to five years. With the proposed comprehensive reforms and these resources, the program will return to 20 fifteen-sixteen benchmarks within five years, resolving the backlog of existing cases within ten years.
This request assumes the reforms apply to all open applications in the backlog. If the adopted reforms exclude open unresolved cases, DIR would need a significant number of additional resources beyond what is being requested currently. I appreciate the subcommittee's consideration of this request, and I'm happy to answer any questions you may have. Thank you.
Speaker 1
Thank you. Mister Lauer, are you presenting or answering any technical questions?
Speaker 12
Thank you. Chaz Alamo with the LAO. Last summer, our office released a report assessing the state's SIBTIF program and the major fiscal risk and liability that are associated with the program. Our report pointed out that the SIBTIF program has evolved over time to include sort of more lax eligibility standards for these benefits from what was originally intended to be a program that would support severely disabled workers who then were injured at work, has become now a program for which most of the applicants are a worker who sustains an injury at work, who has other underlying health conditions, chronic conditions, known typically conditions of aging, if you will, so high blood pressure, diabetes, asthma, common conditions listed on CIPTIF applications. And our assessment was simply that today's version of the program differs greatly than its original intent.
Speaker 5
We proposed several changes that would sort of reframe eligibility standards to again target those workers who have an underlying severe disability and who are injured at work, sort of that original intent. Fast forward a few months, the administration has proposed this trailer bill language. Our assessment of the trailer bill language is that it largely aligns with the recommendations that we made last year and would be a meaningful step for the state to return SIBTIF to its existing original intent. A couple additional comments. The program was relatively small ten or fifteen years ago, a few 100 applicants a year, and that is indicative of how rare these instances were.
With the change in eligibility, the program applicants are now up tenfold each year. And that means that the change that the administration has proposed to apply the sort of historical eligibility standards to the existing caseloads. So these are the cases that are in that, not queue, but I don't wanna call it a backlog, but the the cases that are pending. In essence, that is the entire universe of subsequent injury claims. There are 4,000 claims that have been finalized for which workers are receiving benefits, and there are 30,000 claims still under assessment by the department.
So the trailer bill change isn't so much retroactive in our view as it is sort of recommitting the state to the CIPTIF eligibility standards that were originally intended. To take a moment to discuss the the the BCP, the workload BCP related to the trailer bill. In our view, it's the administration's best assessment of the workload that it will need over the coming years to handle the implementation of new trailer bill language and the resulting workload changes. These assessments are educated guesses. They're the best the administration can do.
Our office, along with the administration over the next couple years, would follow the implementation and assess whether workload needs were greater or lower than were included in this BCP, and we'd be happy to work with the subcommittee to right size the staffing requirement associated with that. And finally, the fiscal pressure for state and local governments from CIPTIF claims is hidden. And what I mean by that is there's no state budget line item that shows a CIPTIF liability. I think the best analog is the state's annual UI interest payment that we make to the federal government for the outstanding federal UI loan. That is a line item.
It's heard in this subcommittee and we talk about it. One of the reasons I point that out is that these costs aren't as salient to the state or to local governments because they get folded in with other employment costs and aren't a light item in the budget. I think that comparison to the UI loan is is an apt one. The CIPTIF liabilities for public and private employers in the state without changes as proposed in the trailer bill language are right now larger than the state's outstanding principal loan amount for the unemployment insurance loan that we owe the federal government. That stands at about $21,000,000,000 and CPTIF liabilities currently estimated to be about $30,000,000,000.
Happy to take any additional questions. Thank you so much.
Speaker 1
Thank you for that background. Department of Finance, anything you'd like to add?
Speaker 19
Grace Henry, Department of Finance available if there are any questions.
Speaker 6
Thank thank you, madam chair. I appreciate all the work that's being done around it, and I'm I'm glad we're tackling it rather than just ignoring it the way that we do with the UI. And I I wanna go to your comment about returning to the original intent. So I get having to do that. The bill requires pre so several specific questions.
Just the bill requires preexisting conditions to be documented before the subsequent injury. So how will DIR handle cases where worker had a a real preexisting condition that wasn't formally documented? Is there a hardship or appeal process for that?
Speaker 14
Jazzy Graywell with Labor Agency. Happy to take that question. There are two different ways in which a worker who does not have prior medical evidence will be able to establish their preexisting disability existed at the time of the subsequent injury. So, first, since a sub subsequent work injury must be work related, currently, a worker worker is assigned a QME, a qualified medical evaluator, and as a part of that QME's role in evaluating the subsequent injury, to look at other injuries, conditions, or disabilities a worker might already have through their comprehensive medical evaluation. So for example, a worker who was in a bad accident where they broke their arm over ten years ago but was unable to access health care due to cost, their arm never healed properly.
So in that QME's evaluation, they would be able to assess that arm injury and establish that it did not occur prior to the subsequent injury. So that's one way. The second way is that the trailer bill does allow for submission of contemporaneous evidence. So in section forty seven fifty four point one of the trailer bill, it allows for medical records, testimony, or other evidence in existence at the time of the subsequent industrial injury. So what is currently happening is that applicants are trying to establish after the fact, after that subsequent injury that they had a preexisting condition.
So what the TBL does is it are require it allows for that contemporary evidence that was in existence before the subsequent injury. There does need to be proper guardrails to prevent abuse or fraud in determining years or decades old, later that an injured worker suffered from a preexisting disability, and we believe the trailer bill strikes this balance by allowing for additional types of evidence to be submitted and while also using it using its current QME process to establish those preexisting disabilities.
Speaker 6
Thank you. The original would you say? The original was designed to protect low paid workers without disability pensions from employers unwilling to hire them with visible disabilities. How does the IR ensure the reforms don't inadvertently harm the workers the program was designed to protect? You might have already covered a little bit of that.
Speaker 14
Yeah. And I'm happy to expand on that too. So, SABTF or CBTF, as some love to call it, was established in the nineteen forties, and this is before we had other discriminate discrimination disability protection laws on the books. And so since the establishment of SABTF, we now have FIHA ADA to prevent disability discrimination. We also have SSDI to offer payments to workers who may be disabled, and so there are other existing protections that exist in the workplace to ensure that we are continuing to hire workers with disabilities.
And so I just wanted to just share that. And the and the other part too is that workers who have disabilities will continue to go through the process. What we have seen and what LAO has noted is the increase in chronic conditions and the trying to establish that it was a preexisting condition after the the subsequent injury. And so for injured workers and workers who have preexisting disabilities and conditions, those cases will continue to move through the process. The reforms are largely intended to tackle the issues we have around the chronic conditions.
Speaker 6
So the trailer bill will route CPTIF medical evaluations through the QMA process, but the system has a documented shortage of evaluators and produces significant delays in the regular workers' comp cases. So how will you ensure that the QME can afford can absorb these cases without further delaying resolution for other workers who've been waiting months or even years?
Speaker 29
I'll I'll take that question. Ken Lau, chief counsel of DIR. So what the trailer bill language does is that it requires the the SIBTF applicant to use the QME report that was done in the industrial case. So, it's a subsequent industrial injury. So, in most cases, when a worker suffers a work injury, they will have been evaluated by a qualified medical evaluator, as Jazzy pointed out earlier and with a comprehensive report of the applicants medical history and then you can what the trailer bill language now allows for is for the applicant to use that report, which documents all of the injuries in the subsequent injury claim, which will actually streamline the
Speaker 6
The trailer bill applies retroactively to 30,000 open non final cases, including cases where workers have been litigated in good faith under existing law for for years. Has the DIR modeled how many pending claimants would lose eligibility under the new labor disabling standard? And what transition or hardship provisions exist for those workers?
Speaker 14
I'm happy to take that question. I'm currently, they're everything would have to be man we'd have to manually go through each case and assess each case if for eligibility. So it is very difficult for us to do that in that manual process. It's very time intensive and resource intensive, so we have not been able to do that. We are in the middle of a modernization project, and so it is all manual at this moment.
And so we don't know how many cases will meet the new labor disabling definition, but I if the reforms are applied to those open cases and applications, that will occur through that process by case examiners and and by the judges. How the process currently works is there and I'm gonna speak in very broad strokes because it's a very complex program with many steps. Is the first step is the application process. An applicant applies for SIBTF benefits. The applicant and or their attorney will receive a letter from DWC, the division of workers' comp, requesting a number of different pieces of information.
Once that information is compiled and sent to DWC, they'll move into the next phase, which is what we call discovery. And in the discovery phase, that is when case examiners review the evidence that is submitted, and then they'll request, if needed, additional evidence to determine eligibility. Once that case file is closed and all the information that is requested is needed, is in that file, then they'll move to the next phase, which is where either they'll get a hearing date with a workers' compensation judge to have their case heard, or the attorney and the applicant can pursue a settlement with DWC and DIR. So those are sort of the three phases. And so it is very difficult for us to determine who in each of those phases would meet the labor disabling definition, but we would be able to, in that process of, implementation, have each case examiner and judge, examine that evidence.
And attorneys and their app and the applicants, if they wish to to do so, can submit additional evidence, to meet those eligibility thresholds.
Speaker 6
So since we don't have all that information, tracking it would be really important, you know, just to see what what what's the reality out there. And then finally, just one more question. The governor vetoed a b thirteen twenty nine and called for comprehensive reform through the budget process. That trailer bill is now before this subcommittee this trailer bill language. But a a a b fifteen seventy six is simultaneously moving through the policy committee process.
So how does the administration view the relationship between the two vehicles?
Speaker 14
We the bill continues to move through the legislative process. The department and the agency and the division have been directed via the veto message to come up with a comprehensive proposal, and we really do need comprehensive reform to address this exponentially growing workload and liabilities and growth in the program. And so from our perspective, it is really difficult to do the to address this problem in a piecemeal approach. So that is why you see such comprehensive reform in the trailer bill because that is the approach that is needed at this point of where we are seeing exponential growth of the program. And so we continue to monitor the legislation.
I have noticed that it was recently amended, and so we'll work to continue to assess the impact that that will have. But we believe that the comprehensive reforms and the trailer bill is the way to address the liabilities and the workload that the department is seeing. And to truly be able to address this significant backlog, we have workers who are seriously injured who are now stuck in this backlog and taking five to ten years for case resolution. Those workers need to see much faster case time case processing times to be able to have their cases heard. And without comprehensive reform, we will be in a very difficult situation to be able to do that.
Great.
Speaker 1
you. Senator D'Arrazzo, the LAO, I think he wanted to chime in. Do I pronounce your name Alamo or Alamo? Alamo.
Speaker 5
don't wanna step on okay. Excuse me. Senator D'Arrazzo, you asked a question related to changes in eligibility standards. And I I think I I only wanted to add a bit of nuance. The legislature has not set the eligibility standards for the CIPDIF program.
The laws were written rather vaguely in the nineteen forties. And what has happened is that a series of decisions, some made by the legislature, unintentionally affected eligibility for CIPTIF. The the Workers' Compensation Appeals Board issued a decision in 2020 that related to a legal question, but had major ramifications for the CIPTIF program. And so what I mean to impress upon the subcommittee is that eligibility has expanded by sort of actions and inertia outside of the legislature's direct action. So to characterize it as a elimination of an eligibility for a worker is, I think, giving the sense that the legislature's recently allowed for all of these uses, when in fact it it was sort of the evolution of the program rather than specific explicit legislative action like contemplated with this TBL.
Speaker 6
appreciate your comment because that gives greater context to what we're talking about here. I guess I'm referring not so technically as much as if the end result is that a worker loses because the standard for all these reasons changed, then that's what I'm concerned about. And I know you all too, but that's what all these questions are are aimed at. Thank you. Thank you.
Speaker 8
Thank you. And, fortunately, I don't have any good questions for you because it's it's pretty well much been covered. But I do have a couple of comments because this is one of the more critical issues that we need to get a grasp on. Otherwise, it will it it it affects so many things. And to your comment earlier about you don't see it in the line item from a city perspective, from a government agency perspective, That's because there is no decision to make when your workers' comp insurance goes up from 1,000,000 to $2,000,000.
But all employees see is that, hey, the city made a million and a half more dollars in revenue. Why aren't we getting some of that? Well, it's because that line item is not it's not a decision thing. We don't say, oh, no. We're not gonna pay the extra 500 or a million.
They have to pay it. And so all of that excess revenue, and you can see that in the state budget as well. At 15, I forgot how much more billion dollars in state revenue that we we brought in this year. We're spending $3.50 instead of 2 or instead I'm sorry. $2.50 in the general fund instead of about $2.28 last year.
Well, everybody wants to know, well, where's all that money going? All of it goes into those type of things, and a lot of it is related to programs like this. I've I've been able to see this on on both the workers' comp issue later on that we're gonna we're that we're gonna talk about, But, you know, this program as well because, you know, they kinda overlap. It's one of the most abused systems ever because there is no incentive along the way for anybody to not not do it. From the medical care parts to the the legal parts to the employee parts.
Speaker 62
But where but we're if we don't get a handle on this, our employees don't get raises because we're paying out money. The people that are egregious that are hurt the most wind up in the system waiting while it's inundated with people that are taking advantage of a system that has basically what he was talking about that Elio was talking about was the scope of what the definitions of what these things are has has widened and widened and widened. And there's nothing we can do about it because we have protection mechanisms in place for a lot of people, and and you can't go after that. It's blatant out there, and we can't go and and reel it in. There are very few cases that actually they investigate a fraud and and are able to hold somebody accountable for that.
Speaker 8
There's so much of that out there, and we have to figure out how to to reel this in. These these steps that they're taking are
Speaker 8
need to be done. That's one that to me, it's like a no no no questions. We we have to do these. And I applaud the LAO for coming up with those great ideas about how to fix a program. We have to caution ourselves so that the the people that are truly injured terribly and need the help are getting the help and they're getting it rapidly, which means we kinda have to have a way of of triaging the most injured so that they get the the care they need.
We can't have people laying in in in bed for four months waiting for their next doctor appointment. And and so, you know, I I am in agreement that we need this, and and I applaud everybody for for recognizing the dire need for it.
Speaker 1
Thank you. I have no further questions as my colleagues have perfectly brought the key points forward although I do have one point of personal privilege. Miss Greewal, is your title deputy secretary of legislation?
Speaker 1
Okay. I'd like to recommend that you have a promotion from the director who's here present that your knowledge of the program far exceeds legislation. It sounds like you run the program. So congratulations and thank you for your very in-depth knowledge of sharing with the committee.
Speaker 1
Put that in writing and make sure it's in your documents. With that concludes and see even senator D'Arrasso concurs. So you got two there, two out of three. That concludes issue number four. We're now gonna move to issue number five, which is the elimination of vacant positions at DIR.
We're joined by the following individuals. The same with the Department of Finance and LAO, and also mister Iverson, I believe, is staying our CFO of DIR. Let's see if you can match Jazzy. I think she's got you Yes. Pushed on there.
Speaker 17
Yeah. Definitely something to aspire to. And hopefully I do because I'll be with you for the remainder of DIR's issues. Hello again. Josh Iverson, Chief Financial Officer at DIR.
Thank you for the opportunity to provide an overview of DIR's approach to the vacant position eliminations under budget control section 4.12. In response to this budget directive, DIR conducted a comprehensive and deliberate review of its vacancy landscape, operational needs, and program priorities. At the time, the department had roughly 4,000 authorized positions with about 1,000 vacancies. Our goal was to identify a level of reduction that would achieve meaningful savings while minimizing impacts to core mission critical functions, implementing this budget control section in a balanced and responsible approach. DIR divisions, which there are many, were given the flexibility to identify vacancies that could be absorbed with the least operational disruption.
This decentralized approach ensured that decisions were informed by program level expertise and aligned with each division's unique workload and priorities. The department focused on eliminating long term vacancies and positions that were more administrative or clerical in nature while taking steps to protect frontline enforcement and service delivery to the greatest extent possible. Even after the reductions, DIR retains several 100 vacant positions, providing continued flexibility to address the highest priority needs as they evolve. We recognize the concerns raised regarding workload and backlogs in certain areas and remain committed to monitoring these pressures and adapting within available resources. Thank you and I look forward to answering your questions.
Speaker 5
Chaz Allen with the LAO. Our office has no, specific comments about these particular, proposed eliminations. Would defer to all the work that staff have done on your behalf.
Speaker 13
Thank you. Department of finance? I'm Allison Hewitt, department of finance. My particular role here is I'm happy to answer any questions from the administration in terms of the statewide, kind of implications here and just note that the, in conjunction with the control section 4.12 of the 2024 budget act, the administration worked to identify vacant positions across state government while minimizing to the greatest extent possible any public impact associated with those reductions. That exercise enabled the state to address a budget gap that was projected, both in 2425.
It also helped to build budget resiliency. So with that, I'm having, my colleague can answer any questions that are specific to DIR, and I'm available to answer any questions the committee has
Speaker 6
Thank you, madam chair. All these positions are paid for with special funds. So if the point of these, vacancy sweeps is to reduce the structural deficit, Why are we using non general fund positions? Why are these non general fund positions being targeted?
Speaker 13
Thank you for the question. I'll I'll I'll start and I can will probably pass it off to my colleague for the DIR specifics. Yes, obviously, fund was the priority because that was the structural gap that had been identified. But within the control section language, Department of Finance was able to look at various funding sources, so not just the general fund but also special funds. The special fund analysis, there there is a the administration's position is that building budget resiliency within the special funds, many of which are supported by fees or assessments.
In the case of the Department of Industrial Relations, we're talking primarily about assessments on employers, annual assessments. There is a good case to look at those special funds and build resiliency within those funds in addition to solving the immediate general fund budget problem that was in front of us. And my my colleague can provide kind of the specific fund source information to the extent that it's helpful, but that's the construct of the drill is that the way that the administration approached was both general fund, but also having special fund a special fund component of that.
Speaker 6
Well, these positions cover things like recovering stolen wages, worker safety, and they're meant to respond to California's workforce, work working people to the needs of so these, as you said, these special fund positions are paid for with fines and fees that come from enforcement activity. They're not just fines and fees. They're they're because of violations and they're and they're part of, right, addressing violations. So it's enforcement activities, not like attacks where we're just trying to penalize an employer. So why would we eliminate these positions which perform the very activities that are needed?
Speaker 42
And we we know that there is more and more of workforce violations occurring out there. And so we're taking away positions to enforce where the fines are and and and the fees are are being used for enforcement activity at a time when there's most needed, when there's more abuse, and taking that away from them when it's not hurting our general fund. So I I don't wanna make this connection, but we just talked about a little while ago the elimination of other positions or not elimination of other positions, but not increasing or not maintaining the positions. This is not the combination of the two is not what's needed at this particular time. So what what how can you explain first these positions, these vacancy sweeps, and then am I making this connection?
Speaker 17
Yes. Thank you, senator. The as Allison mentioned, it was a statewide approach. There's historically 40,000 vacancies statewide. The administration wanted to try to eliminate 10,000 of those again, statewide across all state departments, across all funds, across all bargaining units.
Within the Department of Industrial Relations, we took kind of a similar approach. We wanted to kinda spread this out over all of the department's divisions. Director Osborne, when she testified, mentioned a few of them, labor standards enforcement in CalOSHA and apprenticeship standards and workers' compensation. We also have many commissions, councils, boards. It's a pretty complicated department.
And so we wanted to allocate the elimination of positions across the entire department so that we weren't really focusing heavily on any one in particular With respect to the wage claim adjudication unit within the division of labor standards enforcement, they they did participate in this exercise as did practically all of the department because had we not had each division within the department participate, it would have magnified the impact in other high priority divisions in our department. We recognize workload pressures and backlogs. However, the positions identified for elimination were vacant, and their removal reflects a balancing of priorities across the entire department. As a result, yes, there there are some flexibility considerations, but we do not anticipate a direct immediate impact on the existing backlog attributable to these reductions. We will continue to monitor workload and staffing levels and evaluate options to address backlog challenges within available resources.
Speaker 6
Yeah. The the problem with vacancies does it doesn't mean that they're not needed. A vacancy could be because we are we haven't figured out how to recruit people like in Cal OSHA. We haven't figured out how to recruit people and retain them. That's our problem.
It's not because it's there's not a need out there. And that's that's a really different that leads you to a different conclusion than, okay, they're empty, they're vacant, so we don't need to fill them because there's obviously, there's there's no need for it. That's not the case. And this with regards to labor standards, we know that. That's not the case.
There's more need more need than ever. I mean, right now with all of the immigration raids that are taking place, a very common thing for employers to do is to use that to intimidate and retaliate against immigrant workers in order to lower the standards or not pay the wages or other other, you know, bad things that that employers some employers do. So this is not the time to pull back, and I really urge you all to reconsider that because that doesn't make sense if you look at the reality of what's going on in the workplace. And that's not what, you know, California having these laws on the books doesn't mean anything if we're not enforcing them. So, madam chair, I really urge us to dive into what this means to Californians.
Thank you.
Speaker 1
Thank you, senator D'Arzo. I wanna build upon our comments and if there are any MBA people in the room or LAO. I was always told in our projects that budgeting and cutbacks of positions aren't should not be done smoothing out, you know, just taking numbers and say, okay, I wanna take we gotta do 10,000 jobs and we're gonna take 1,000 from each department. That's not what most people will recommend in business school. What they tell you is is that actually you're supposed to look at each and every department to determine what is the need of that department.
And that may mean some departments may not have any cuts and some may have double based upon, really, frankly, where the need is. So I concur with senator D'Arzo. I'm a little concerned with the view of, well, we know we need to cut and so we're, you know, trying to spread it out. And, you know, if if we've already identified that this is an area where there are significant backlogs and issues, this may not be the department at this time to eliminate those positions. These may be positions we want to keep and consider other areas within your vast department of 4,000 employees and and all of that to consider maybe looking someplace else.
So if you could come back to the committee with really assuring us that based upon the previous discussion we just had in the issue that these positions are not positions that are gonna be impacting dealing with the backlog and dealing with new systems and all these other things that you guys are doing. Because this is a priority of the legislature as senator D'Arrazzo has stated. Okay. Alright. So you're gonna get that back to us?
Speaker 1
Okay. Thank you, sir. Alright. With that, seeing no further questions, that's gonna conclude issue number five. We're gonna move oh, I'm sorry.
I had one question. Does this department utilize the temporary help blanket program?
Speaker 17
Yes. DIR definitely does utilize the the temporary help. Sometimes people refer to it as blanket because they have blanket authority to hire people in into temporary help funded positions. For example, you may recall, it's been a few years, but Assembly Bill one seventy one provided the department some emergency hiring authority, and then the language of the bill also called for DIR to work with Cal HR and the state personnel board to review certain classifications and the minimum qualifications associated with those to see if they needed to be amended or updated so both cal OSHA and the labor commissioner's office utilize that authority under AB 171 to to hire into the temporary help blanket and one thing that's kind of not immediately clear when we talk about the elimination of positions within the department is is those are authorized positions that were referring to. It doesn't really talk much about positions that have been hired into the temporary help blanket so you utilize in the authority under AB one seventy one allows a labor commissioner and the chief of CalOSHA to kind of mitigate some of the impact of those positions being eliminated.
Speaker 1
Well, I'm of the position that actually I would rather you hire people full time to do the work versus utilizing the temporary blanket program. So and we could eliminate the temporary blanket program. How about that?
Speaker 1
if you could please provide to the committee maybe just your summary of how has the temporary help program evolved in your number of people. And then is that growing? Is it reducing? Kind of what's happening with it as in relation to the vacant positions. So, we can ensure that it's always our hope that we would hire good qualified people who would be committed to the department, who could grow with the department, and then that expertise could continue to stay in the department.
Mhmm. So if you could help us maybe with a little more details on the background, that would be great.
Speaker 17
I can commit to that. And what CalOSHA and the labor commissioner's office have been able to do under that authority under AB one seventy one is hire into the temp help blanket, allows those staff to be trained to meet the minimum qualifications that would allow them to be hired into a permanent position.
Speaker 1
Yes. I understand. Okay. That concludes issue number five. We're now gonna move to issue number six, and the CFO is gonna stay in the hot seat here.
Issue six is the Bureau for Investigation Resources, and we'll be joined by the following panelists. Danielle Lucido, chief counsel of the division of OSHA. We're also gonna have Deborah Lee, the chief division chief division of OSHA as well. And then mister Iverson is staying. And we still have our same representatives from LAO and Department of Finance.
With that, why don't you go ahead and get started?
Speaker 17
Thank you, madam chair. Again, Josh Iverson, CFO at Department of Industrial Relations. This proposal is requesting 14 permanent positions and $2,300,000 in fiscal year twenty six twenty seven and $2,000,000 ongoing from the occupational safety and health fund to strengthen CalOSHA's Bureau of Investigation. This unit is responsible for investigating the most serious workplace incidents, including fatalities, and for preparing cases for potential criminal prosecution. The bureau currently handles a significant and growing workload of workplace fatality and serious injury cases each year.
This proposal reflects the need to align staffing with that workload and ensure the department can carry out timely, thorough investigations in the most serious cases. With these additional resources, CalOSHA will be able to expand its investigative capacity, improve timeliness, and strengthen enforcement of workplace safety laws. A stronger investigative presence also supports deterrence, reinforces employer accountability, and helps prevent future injuries and fatalities. Ultimately, this proposal is about ensuring that the most serious workplace incidents receive appropriate attention and that California continues to uphold strong workplace safety standards. Thank you, and I'm happy to take any questions.
Speaker 1
Thank you. Who'd like to go next of you two? You're just here to answer questions and support. Okay. Thank you.
LAO, no further comments. And department of finance? Okay. Senator D'Arrazo. Yes.
He got the message from the last issue.
Speaker 6
I appreciate I appreciate that. I just wanna share with you that a few years ago, I visited a woman living in a trailer park in the Central Valley.
Speaker 6
There you go. Hello. Anyway, I went to visit a woman, lived in extremely poor part of town in her trailer park, and she had just lost both of her sons in a workplace, both of them minors, and both of them and the whole family undocumented. It was the saddest thing I've ever had to do in my life to visit her. She's not knowing what what to do.
I just say that, obviously, to connect how important these investigations are, to see that there's fatalities in the workplace almost every other day. There's something this is not a good message that's out there, that the conditions are so bad that somebody dies on the job every other day. So I you know, the BOI currently investigates, you know, about seventy percent of the cases in the jurisdiction each year. So seen as how we need to could do more, and I really appreciate the proposal to get more staffing on there. What criteria because you they only get to seventeen percent of the cases, what criteria is used to prioritize the fatalities and the serious injuries that get investigated?
And what kind of work do you do with the workers, the families, and the employers when it goes uninvestigated?
Speaker 26
Okay. I can try my best to answer that for you. So when we're looking at cases that are referred to us, we look for cases that, typically involve a serious accident accident related citation, which means that our enforcement staff on the civil side have made a determination that the accident or fatality was caused by a serious violation of regulation. We often refer to those as SARS. And if you look at the labor code, sixty three fifteen, it tells us that those are the types of serious cases that we are to look at.
Serious accidents caused by a serious violation is what it says in the labor code. So we're supposed to be looking at all of those, and and then from looking at them, we are to pull out the ones where we think that there's a potential for criminal liability. And once we do that, then we try we try and investigate those. And that's those are the ones that we actually investigate. And there is a procedure a policy and procedure about how to determine you know, it gives criteria to the investigators.
And there's sort of a pre review done by the supervising special investigators and and the chief investigator.
Speaker 26
the time of the investigations? Okay. So during the time of the investigation, we are interviewing people from typically, from the employer staff if that's necessary. They know that we're conducting a criminal investigation. It does that answer your question, senator D'Arrazzo, for the employer?
Speaker 57
Here it is. Thank you. It might be a little wonky. If it keeps up, we'll have you switch over now.
Speaker 6
Okay. Well, I just since it's a fatality, since it's so serious Yep. I just wonder what what is it that you do with during this process of investigation with with the families, with the employers.
Speaker 26
So to the extent that the family has information that can be helpful in our investigation, then we utilize that as a resource. Any source that we can get, so it could be people who work for the employer, it could be the employer and their staff, and unfortunately, sometimes it is the family of the decedents who know information that's critical to our determination about criminality. If there is if there is no, evidence that we would get from the decedent's family, we typically do not have any kind of engagement with them at the BOI. That doesn't mean Kat Losha doesn't engage with them. That just means in the criminal bureau.
Speaker 6
Right. What I could add Yes. I can't tell if I'm on now. What I would add is that during the investigation, we do make immediate contact with the family at a reasonable time. We will also keep them informed of the investigation as to what is being transpired.
Speaker 28
We will also definitely interview the family to see if as chief I'm sorry. I call her Dan. Sorry. Lachiro had stated To ensure them and give them a way of communicating to us so that we can explain the process to them. And we stay informed with them throughout the process.
Speaker 1
Let's see. If the 14 positions associated and associated resources are approved, what is the timeline for which the administration expects to fully address the backlog?
Speaker 26
My co panelist if you wanted me to be the one. That's an excellent question. I think that the intention is to not have a backlog as soon as possible. And I'm it's hard for me to say because we have not been adequately staffed, how long it will take. I think it it will be relatively quick to get through the fatality backlog.
Speaker 52
The fatalities are a much smaller number. I think for the serious injuries caused by a serious violation, we've done math to sort of we've looked at the cases from 2024 and 2025 to determine how many of those we think would be cases we would have to actually investigate, and it's about six hundred and fifteen of the approximately two thousand. So that would basically triple our our workload because right now we're looking at about three hundred and seventy fatalities a year that are cases, most of which are fatalities. So if we're adding on that additional six hundred and fifteen a year, which currently we don't get to, it is going to add quite a lot of work.
Speaker 1
Okay. So can you please provide to the committee, because we don't operate in as soon as we hope, if you could provide to the committee a better idea as we move forward with supporting the request when you anticipate resolving your backlog, the time frame.
Speaker 19
Grace Henry, Department of Finance. And I just wanna provide one clarification, which is that generally speaking, BOI does not carry a backlog due to the nature of these kinds of cases where there are statutes of limitations. There is
Speaker 19
current amount of cases as the chief which he was saying that, these resources would go a long way to addressing, and we will absolutely get back to you with, those projections.
Speaker 1
Thank you. Thank you very much. Seeing no further questions, then that's is going to conclude with issue number six. Will move to issue number seven, which is the workers compensation appeals board. More specifically, to remove the sunset for appeal timeline provisions, trailer bill language and we' joined by the following panelists.
We have before us Catherine I' not going to butcher your last name chair of the workers compensation appeals board We have mister Iverson who's returned, and then we have our LAO and department of finance representatives who have remained. Chair, would you like to start? Or you're here to
Speaker 51
Yes. Good afternoon. I'm Catherine Zaleski, and I I appreciate your fears of my name. And as you know, I'm the chair of the WCAB. Labor code section fifty nine zero nine requires us to act on a petition for reconsideration of a decision issued by a workers' compensation judge within sixty days.
Speaker 29
Petitions are filed with the division of workers' compensation and then transmitted to the WCAB once the judge has prepared a report and recommendation addressing the petition. The judge has fifteen days to issue that report. Under former section fifty nine zero nine, the sixty days began to run when the petition was filed. Any delay in transmitting the case did not extend the sixty day period. As a result, the ability of the WCAB to act on petitions within sixty days was substantially limited.
In order to meet the sixty day requirement, WCAB often issued an interim order granting the petition for further study and then later issued a final decision, creating a backlog of cases awaiting those final decisions. Effective 07/01/2024, section fifty nine zero nine was amended so that the sixty days begins to run when a case is actually transmitted rather than when the petition is filed. Since the amended version took effect, WCAB has significantly reduced the number of cases awaiting decisions from 637 on 07/01/2024 to 460 as of 04/21/2026. Additionally, we have been able to limit the numbers of cases that we grant for study because we have a true sixty day period to consider the petitions as they come to us. This amendment is set to sunset on July 1.
We're asking that the sunset be repealed and the amended the amended version, excuse me, become permanent. I'm happy to answer any questions that any of you may have.
Speaker 1
Mister Iverson, did you have anything to add? Narrative support. Okay. Thank you. LEO's office?
No. Department of Finance? Okay. Senator D'Arzo?
Speaker 1
Thank you. That's all. No further questions? No? Okay.
Alright. That's gonna conclude issue number seven. Thank you for your updates and your progress, more importantly. Thank
Speaker 1
Yes, ma'am. That will include item number seven. We're now gonna move to item number eight. Issue eight is the apprenticeship training grant augment augmentation. We'll be joined by the following panelists for this issue.
We have Adele Burns, chief of the division of apprenticeship standards, and mister Iverson is staying in to support. And we also have our LAO and department of finance representatives. We'll start with miss Burns.
Speaker 17
Okay. Thank you. Appreciate it. Josh Iverson, chief, financial officer at DIR. The department requests approximately $18,200,000 annually from the apprenticeship training contribution fund to increase training grants for building and construction trade apprenticeship programs from the current level of $3,000,000 to $20,000,000 per year through fiscal year twenty nine thirty, along with some limited term staffing to manage increased workload.
This proposal is driven by an accumulated fund balance, a surge in contribution check processing demands, and urgent workforce needs tied to the Los Angeles fire recovery efforts. This proposal better aligns available resources with current workforce demands. Apprenticeship programs are critical to developing a skilled construction workforce, particularly as the state faces increased demand for rebuilding and infrastructure projects. Current grant levels underutilized available funds and limit training capacity. By increasing grant funding, the proposal will expand training capacity and help ensure a pipeline of skilled workers to meet near and long term needs.
The limited term positions will support timely processing and program administration avoiding delays or backlogs. This is a targeted fund supported proposal that leverages existing resources to address immediate workforce needs. Thank you and I'm happy to take any questions.
Speaker 6
You. LAO? None. Department of Finance? None?
Okay. I do have let's see. Oh, we're in issue eight. Right. I wanna make sure I didn't lose my place here.
Just the grand cap has been at 3,000,000, which I'm glad now to see that it's it's significantly increased. But, if the current ATCF fund or what is the current fund balance? And, why would we expire in why would we let it expire in 2930 rather than make it a permanent given that the ATCF revenues are expected to continue growing with daily rebuilding infrastructure investments. So, two two questions. What's the current balance and why let it expire?
Speaker 17
Thank you senator Drazzo for the question. The current fund balance is in the neighborhood of about $80,000,000. That's why it gives us great confidence to put forth this proposal to increase the annual grant amount from 3,000,000 to 20,000,000 and start to utilize that fund balance. Yes, we believe the revenue into the fund is sustainable. However, we want to be fiscally responsible and not over commit or over leverage the the fund balance.
That's why we put the end date of 2930 on there. If it ends up being more sustainable at an amount above, you know, $3,000,000, we'll definitely come back and discuss it with legislature on on what maybe we can put in into place at that time.
Speaker 6
Okay. Any comments? Grace Henry, Department of Finance. Just echoing the the comments from Dare. Okay.
Just wanna make sure sometimes you get better proposals when you know that it's gonna be, you know, several years down the line rather than year by year by year. That's very uncertain. So I think you get better better proposals and better when you can project and when you can plan several years in advance. Okay. That's my only question.
Thank you, thank you very much.
Speaker 6
Okay. Sorry here. So we're moving on. Thank you very much. Moving on to issue nine regarding the pre apprenticeship programs.
Okay. Thank you. Go ahead.
Speaker 17
Good afternoon. Josh Iverson, chief fiscal officer at DIR. DIR requests two permanent positions and $336,000 in fiscal year twenty six twenty seven and $300,000 ongoing from the apprenticeship training contribution fund to support the rapid growth of pre apprenticeship programs in the building trades. California's pre apprenticeship programs serve as a critical entry point into registered apprenticeships preparing participants with the foundational skills needed to succeed in the trades and connect to career pathways. Demand for these programs has increased significantly.
New California Apprenticeship Council pre apprenticeship registrations have grown from just four programs in 2021 to 21 programs in 2024 and are projected to reach a 170 by 2029. This growth reflects broader statewide efforts to expand apprenticeship opportunities and build a skilled workforce to meet California's infrastructure and economic needs. The requested analyst positions will ensure the department can keep pace with this growth by conducting program reviews, processing registrations, and providing ongoing compliance monitoring. With these resources, delays in program approval and oversight could Excuse me. Without these resources delays in program approval and oversight could limit the expansion of pre apprenticeship pathways this proposal supports the governor's goal of serving 500,000 apprentices by 2029 by strengthening the pipeline into registered apprenticeship programs Thank you, and I'm happy to take any questions.
Speaker 6
No. Alright. I have I have one or two questions. For the pre apprenticeship programs, what are the completion if you you may not have this specific thing now. What are the completion and placement rates for Erica program and for the high road trading partnership funded building trades.
Speaker 6
Yes. For the pre apprenticeship programs, what are the completion and placement rates for the Erica and the high road training partnership funding? Building trades pre apprenticeships? And what share pre apprentices successfully enter registered apprenticeships. Obviously, that's a that's has to be part of the goal, right, to actually move through the apprenticeship programs.
So first that, any any information on that?
Speaker 31
Yes. So Adele Burns. I'm the chief at the division of apprenticeship standards. And those are great questions, and I'm happy to take those and and follow-up specifically since those were about two programs. One thing that I will just clarify is DAS obviously does run the the ERICA grants, and so we can gather that data for you.
And we do track it in our system, so we can do that analysis and follow-up with you about that. The high road to construction careers, some of those programs are registered pre apprenticeships with DAS, but not all of them. And that is a grant program administered by the California Workforce Development Board. So we may need to I I will probably be able to give you a partial answer on that because, of course, if they are not registered with DAS, we do not have the ability to tell you which of those individuals have matriculated into an apprenticeship. But this, of course, is part of why we are broadly encouraging the registration of preapprenticeships so that we can have exactly those kind of metrics.
Speaker 3
And so we will follow-up with you also about the completion rates of pre apprenticeship programs. But I will say just high level, pre apprenticeship programs typically range from two weeks to twelve weeks. So the completion rate is usually pretty high on those. Where there's more variation in completion rates is in apprenticeship programs. So the I will say the key metric that we track with pre apprenticeship is more around the matriculation into an apprenticeship program.
Speaker 6
I was privileged to visit a forgot the name of it, in in Los Angeles, the women's pre apprenticeship program.
Speaker 6
And it was fabulous. I mean, the experience of what it takes and things that you maybe maybe weren't as a bigger challenge in more traditional careers, but to be in the construction career, how how your family responsibilities, childcare is really different to have to get to work at four or 05:00 in the morning on the other side of town. I mean, really, just down to the nitty gritty. It was really, really wonderful. So I could see how that's going to increase.
Because just saying, Okay, apprenticeship programs should have more women. You know, okay, you know, you can say that all you want, but without these preparations for the apprenticeship program won't won't work. So, given the success of these programs, shouldn't we consider additional resources? And I'm you know, we all know that we need more construction careers, more people in construction careers with the fires and so many other housing. We're doing a lot on the policy level to increase housing production, but we're all the people we're gonna actually build.
So I would really encourage you as part of our vision for California and the needs for California, this could really use additional resources. Thank you.
Speaker 1
Thank you, senator D'Arrazzo, for not only your good questions, but covering for me there. You're a great wingman all the time.
Speaker 6
I just have one more. Yes. And can you provide a status update on the California Youth Apprenticeship Program? Happens to be my bill. Anyway, my understanding has been a a model for federal programs and other states.
So if you could get that to me, that would be great.
Speaker 31
Absolutely. Is there any particular area of the youth apprenticeship pro are you thinking specifically about the pre apprenticeships funded by the California Opportunity Youth Apprenticeship Grant? Are you looking for sort of the same metric for that program?
Speaker 31
Yeah. So, I mean, I can give you just a high level update about the we call it the COIA grant, the California Opportunity Youth Apprenticeship grant. And we have been allocated $65,000,000 over three different budget years, and we've done two rounds of awards. We've awarded $46,000,000 in grants. And there is a third round of that grant that we are soon to announce the awardees.
And what we did with the third round of the grant was actually to provide continuation funding to the round one and two grantees that have really met significant milestones and registered their programs, whether it be a pre apprenticeship or apprenticeship, and providing continuation funding to those programs to help them launch and continue to scale and serve more opportunity youth. So that's kind of the the high level, but happy to provide any other further updates you're interested in. Mhmm.
Speaker 1
Thank you. Seeing no further questions, that's gonna conclude our issue number nine. And now we're moving to issue 10, which is the increased support for judgment enforcement. We will be joined by the following panelists for this issue. We have miss Garcia Brower from the the labor commissioner with the division of labor standards and enforcement.
Mister Iverson, who's still hanging in here. And then we have our final same representatives from the LAO and Department of Finance. Are you going to are we gonna do miss Brower first, mister Iverson?
Speaker 17
I'd like to be consistent and and go first myself if that pleases the chair.
Speaker 17
Alright. Thank you. I appreciate it. Good afternoon. Josh Iverson, chief fiscal officer at the Department of Industrial Relations.
This request is for 14 permanent positions phased in over two years and up to $2,300,000 in fiscal year twenty six twenty seven with $2,000,000 ongoing from the labor enforcement and compliance fund to expand the labor commissioner's judgment enforcement unit. This unit plays a critical role in ensuring that workers actually receive wages that have already been legally determined to be owed to them through the wage claim adjudication process. When employers fail to comply with final orders, the judgment enforcement unit uses legal tools such as liens, levies, and asset investigations to recover unpaid wages on behalf of workers. The unit is currently managing a substantial and growing volume of enforcement actions reflecting both increased enforcement activity and continued challenges in securing payment from non compliant employers. This proposal will allow the department to expand its capacity to process referrals, pursue enforcement actions more quickly, and improve outcomes for workers who have already prevailed in their claims.
Strengthening this function is essential to ensuring that judgments are meaningful and that bad actors are held accountable. This proposal supports the core mission of the labor commissioner's office to ensure a just day's pay for every worker and to promote a level playing field for employers. Thank you, and I'm happy to take any questions.
Speaker 5
Chaz Alamo with the LAO. Only comment is to say that several years ago, our office reviewed the administrative data behind several years' worth of wage claims at the labor commissioner's office. And one of our key findings was that oftentimes when an award is made by by a staff member through the the the proceedings and hearings of a wage claim, the word cannot be collected. And that is the the sort of responsibility of this entity. And so pointing that out here, that's clearly a a shortcoming of the current wage claim adjudication process.
And these positions would go toward writing that, something that we'll be following more closely in the future, and also suggest that the subcommittee continue paying attention to as the the labor commissioner's office manages its its growing backlog of wage claims.
Speaker 19
Department of Finance, nothing, further to add, but here to answer any questions.
Speaker 6
Thank you. I just wanna thank the department for all the work that you've done on in this area. My first year I was elected, we had a budget, hearing. And I remember so distinctly, there was this long line of garment workers who had these judgments from employers who owed them, and it was and they'd done everything, and it was still years later. So that really left a big impression on me.
So thank you all very much. So what is the current backlog of unaddressed judgment referrals and in dollar terms, and how much in unpaid wages do you estimate you could recover with the proposed additional staffing?
Speaker 34
Good afternoon. I do not have the dollar amount, but we can share that with you later. We have on the liens, we have 28,000 is our current backlog. On levies, it's 30,000, and I'm estimating. On the the demand letters under labor code two thirty eight two forty, we have about 3,500.
And on in-depth investigations, so those are generally low wage industries that we prioritize, and we have about 1,500 in those.
Speaker 1
Thank you, senator D'Arrazzo. Seeing no further questions, that's gonna conclude our issue number 10. Thank you for your participation. Before we move on to public comment, I wanna give senator D'Arrazzo any final opportunities of questions or comments based on today's agenda.
Speaker 6
I don't want to repeat the specific ones. Thank you, madam chair. But, obviously, you know, there's progress that's been made on certain fronts, and I just don't want us to go backward, you know, on other fronts, especially dedicating where we know there's an issue. We know it. We we just can't walk away from working people.
I'm really proud of the apprenticeship programs. Worked with certain people here in the room on those apprenticeship programs over several years, the youth apprenticeship program, the women's apprenticeship. It's it's really great to see moving in that direction. That's why I don't wanna see us work backwards in in other parts of the work. So with that, thank you very much, and I will fight hard alongside of you, madam chair, for the resources that are needed.
Speaker 1
Thank you. Thank you very much. With that, that concludes all the items that we have. And now, we'll you may wanna listen to some of the public comments before you depart. Thank you very much.
We will now move on to public comment to ensure that everyone has a chance to be heard. Please limit your comments to one minute, and, thank you very much. Cesar.
Speaker 1
Just a moment. Could everyone please, keep keep things down so we can hear the comment? Just a moment let them get a chance to. Go ahead.
Speaker 35
Thank you madam chair members, with capital advocacy on behalf of the California hospital association Here on item number four in support of the S I B T F. Thank you.
Speaker 3
Good afternoon, and thank you for your patience while you're with us. We'll be very brief. My name is First, I just wanna say good afternoon, chairwoman, madam Richardson, and members of the senate budget committee. My name is George, and I work with the California Coalition for Worker Power, CCWP. I'm a constituent of yours in the beautiful neighborhood of Lincoln first, we just wanna thank you and this committee for the leadership in supporting our budget request last year for the California Workplace Outreach Program, CWAP.
Speaker 37
Just wanna share some quick numbers. Through CWAP, have reached over 4,000,000 workers in the state, had over 800,000 interactions from 89 organizations in over 45 languages. Workers right now need our help more than ever with federal immigration enforcement endangering our communities. A lot of workers don't know who to go, who to trust, where to get these resources, and so these community organizations behind me are trusted messengers that reach our most vulnerable workers and provide them with the resources they need. We have brought some of these organizational stakeholders to share the impact they have made to workers and constituents of your district.
Speaker 3
I'll close by saying it is for these reasons we request your support for 30,000,000 per year for five years to front CWA. Thank you.
Speaker 8
Hello. Good afternoon. This is my name is Soraya Leonard from the April Parker Foundation. We're based in Long Beach, so it's nice to meet you. For the CWAP program, we've been doing a lot of groundwork with individuals in the workplace and understanding what their experiences are behind the scenes as we help engage and empower them as they understand what their workplace rights are both inside and outside of the workplace.
Speaker 36
It's clear that workers need protections in their workplace, and the fact that they feel taken advantage of and not understanding their rights is a big issue and something that we're trying to absolve. So, for example, I had met one worker that was denied giving getting time to be able to take care of his family member back home and other workers who felt racially discriminated against and targeted in the workplace and just don't feel safe to go to work on a on a daily basis. So this work and the CWAP program helps us give them some insight on what their workplace rights are on a daily basis. So just wanted to give you some notes on that. Thank you.
Speaker 1
Thank you. So I was a little lenient on the first two because we were kind of warming up and you guys were so great and participating today. But, please try to keep to a minute. And, if you get to a minute, I'm gonna say please summarize. Okay?
Alright. Yes, ma'am.
Speaker 37
Great. Thank you. Greetings, chairwoman. I am also a constituent in Long Beach of yours and to the rest of the budget committee. My name is Dawn Motkins.
I'm the director of the Southern California Black Worker Hub. We coordinate black worker centers throughout Southern California reaching more than 15,000 black workers. Please fund our cwap program 30,000,000 per year through the 2031 term. We are also members of the California worker of the CCWP, California Coalition for Worker Power. It has proven critical to our abilities to deepen reach and education and engagement around worker rights with black workers across all industries, public and private sectors.
Through our CWAP, Echo Black Voices project, we've become the trusted messenger in connecting workers to our local and state agencies like EEOC, DIR, Cal OSHA, civil rights departments, and to support their worker protections where so many have never trusted these government agencies before. The outcomes are workers are more activated and empowered to actually address the insisted worker
Speaker 58
Yep. Violations that so many are harmfully harmfully experiencing. And in addition, please also fund the 14 staff positions at the labor commissioner's office. Thank you.
Speaker 30
Good afternoon, senator Richardson and other committee member. I'm DJ Yoon. I'm from beautiful city of Inglewood. Special shout out to my senator. I'm with the organization Koreatown Immigrant Workers Alliance.
Speaker 1
My Long Beach people, I used to represent most of Long Beach. Now I only teeny teeny bit, but Inglewood's full in the house. But I still I still love Long Beach. Yes.
Speaker 30
So I'm also with the organization Koreatown Immigrant Workers Alliance in Central Los Angeles. I follow in to share a story why CWAP is so important. A worker from restaurant, it's a local chain in Southern California, reached out to us because he and his workers were so fearful of going to work while ICE kidnapping was separating so many families in Southern California. So we met with workers and owners, and we all agreed that business cannot open while workers don't go to work because of the worry about being kidnapped by the ICE. So we had a great relationship with the owners and workers.
Speaker 54
We provide a direct, know your right education to all workers and the owners in multiple location. I think this truly demonstrate the CWAP program help us to build a partnership among owners and workers and community organization to protect the workers, also to protect the workplace businesses. So this is a very critical moment for your support, and your support will continue and build up our partnership to protect our local economy. So thank you so much for your support.
Speaker 1
Thank you. If you're representing an organization, if you would kindly leave your organization's name and address, email, and phone number so we can follow-up if needed. Thank you.
Speaker 22
Good afternoon, chairman Washington and the members of the senate budget committee. My name is Cammy Johnson. Raised in Long Beach. Now I'm a current resident of Inglewood. Just wanted to let you know.
The Southern California I'm from the Southern California Black Worker Hub, represent over 15,000 black workers across Southern California. I'm a proud resident of Inglewood, California, and I'm asking you to support allegation for 30,000,000 per per year for the five for five years to fully fund our California worker outreach program, CWAP. Especially as tourism events are coming and world events are increasing. I'm right nearby all of the, you know, all of the areas in that air that are world events that are happening. They're coming in our city.
Speaker 49
We want to ensure our workforces are informed and protected. This is our trusted we are trusted messengers. Keep, keep us connected to our government agencies and well and worker right protections. Please adequately fund CWAP.
Speaker 25
Hi. Good afternoon, y'all. My name is Sirach Mckiel, and I'm a black worker organizer at EBACE in the East Bay. Alongside these wonderful people from all over the state, I'm in support of full CWAP funding, which exists because of fees paid for by bad actors. So let's make sure this funding can educate and protect workers, and on the other issue, hiring adequate staff to recover lost wages.
Thank you so much, and I appreciate you all.
Speaker 33
Good afternoon, chairwoman and members of the senate budget committee. My name is Flower Alvarez Lopez with Universidad Popular, which is based in North County, San Diego, beautiful sunny San Diego, serving communities alongside the 78 And 76 Corridor in the rural areas of Julian, which is in senator Serrado's district. We support workers and small businesses across North County San Diego region. We're here in strong support of additional funding for CWAP. Our organizations reach some of the most underserved and vulnerable community members.
Thank you.
Speaker 33
Afternoon, chairwoman Richardson and members of the senate budget committee. My name is Alondra Alvarez with Universidad Popular from North County San Diego. Our team reaches constituents of senator Ciardo's district, laborers across the rural area who rely on us to connect them with workers' rights resources. As those trusted messengers, we are here in support of CWAP funding to continue the necessary work our organization provides to the force and backbone of California labor. Thank you.
Speaker 23
Good afternoon. My name is Daniella Urban. I'm the executive director of the Center for Workers' Rights here in Sacramento. I'm gonna speak first on item one, then on items five and ten. So on item one, since 2020, we have convened the UI, the unemployment insurance network of advocates that support claimants on their unemployment claims.
EDD next rep represents a major opportunity to modernize California's employment development department across all three benefits programs. However, we are highly concerned about the lack of oversight and accountability and independent review of the modernization efforts, as well as the meaning lack of meaningful insight from claimant advocates like myself. For example, the recent update on the SDI and paid family leave phone lines have not resulted in any noticeable difference to claimants, and yet EDD moves forward with implementing these systems on the UI program. We wanna make sure that these concerns are not replicated as they go through the ICMS system and as you approve the considerable amount of funding for that work. Thank you.
Speaker 32
Now moving to items five and ten. I am also here, obviously, at the Center for Workers' Rights, but also speaking for Wage Justice Center, LA Workers' Center Network, Santa Clara Wage Theft Coalition, Betzetic Legal Services, and La Raza Central Legal. For item five, we strongly oppose the eliminating of these crucial positions at DIR. The roles are essential to carrying out the agency's mission and ensuring California's labor protections are actually enforced. The workload facing current DIR staff cannot be overstated, and reducing staffing will only limit workers' ass access while worsening morale and retention among existing workers.
Speaker 23
On item 10, the impact of judgment enforcing unit in enforcing fundamental workplace protections like minimum wage and overtime cannot be overstated. Without this step in the wage claim process, wage theft judgments are often just a piece of paper.
Speaker 23
The enforcement tools to JU are powerful, yet they need the extensive resources provided by staff, and we would support the expansion of that staff. Thank you.
Speaker 9
Afternoon. Good afternoon, chairman Richards chairwoman Rich Richardson and committee. My name is Minnie. I am with the Web Resource Center. We are based out in the High Desert, Apple Valley.
Speaker 39
And going out in the community and educating the workers, we are asking that you support the CWAP funding. We are literally boots on the ground going out to different, you know, businesses and communities and just educate educating the workers so that they don't have fear in being retaliated against whether it's wage staff or discrimination. So you helping, you know, to keep the funding going is helping us to do our job in educating the community. Thank you.
Speaker 25
Good afternoon, chair, chairman, Richard and members of the senate budget committee. My name is Marissa Gonzales from Filipino Workers Center from Southern California based in San Diego in LA. We strongly support the CWAP budget request through our outreach efforts. We have been able to stand with our Filipino community, helping workers who have struggled for far too long recover their hard earned wages. These are not just numbers.
Speaker 40
They are families trying to survive, parents trying to provide individuals fighting for dignity and fairness. Thank you so much.
Speaker 59
Good afternoon, madam chair. Senator D'Arrazzo. Paul Bauer with Act. I'm on behalf of Free World, which is an end to end employment platform for returning citizens for the formerly incarcerated. We support a $6,000,000 augmentation for the workforce development board to help gain employment for formerly incarcerated individuals in the specifically in the truck driving industry where right now there's a big gap of 17,000 commercial driver's licenses that have just been canceled by the federal government.
Speaker 41
So we know that this is a pipeline to employment for our returning citizens and an opportunity to both help in this economic struggle for the need for these drivers that's currently out there along with helping on a social benefit in terms of gaining gainful employment for individuals to help them on their path as they return home. So thank you for your consideration in this matter.
Speaker 22
Good afternoon, senator Richardson and members of the budget committee. My name is Veronica Alvarado and I'm with the warehouse worker resource center. We're the co chairs of the California network for immigrant and worker justice. We are working with assembly member Garcia on a budget request that has been submitted on the assembly side to provide funding for immigration enforcement emergency funds, which would provide income replacement assistance to families whose earnings and livelihoods have been disrupted by the devastating immigration raids and kidnappings taking place in our communities. We look forward to presenting more details of our proposal to this committee in the coming weeks.
Speaker 42
We're thankful to the many legislators who have already expressed support for this proposal, especially the Latino legislative caucus for including us in their budget priorities for this year. We hope to be able to work with this committee and your counterparts in the assembly to find a way to get the support to our immigrant families who so desperately need the support. Thank you.
Speaker 34
Good afternoon, respected senators and subcommittee members. My name is Scott Warren and I'm a qualified medical evaluator. Three years ago I evaluated miss Sanchez and I'm here today for her. I believe that the current trailer bill language for the SIBTF program does not adequately fix the part the problems in the system and it would potentially hurt her and many others that I've taken care of and evaluated over the years. And so I'm going to turn it over to miss Sanchez.
Speaker 27
Good good afternoon, members of the committee. My name is Miriam Sanchez. I was born with a severe disability in my left arm, but that never stopped me. I worked my entire life and always supported myself. I was happy to work.
Speaker 44
But in 2018, I injured my other job on the job. Now things that used to be easy for me have become almost impossible. My case with the SIBTF has already taken years, and I'm scared that these budget changes will take away my chance to be heard before my situation is ever resolved. I'm not asking for anything that isn't fair. I just want my case to move forward.
That is why I'm asking you to move these changes to assembly member Liz Ortega's bill a b fifteen seventy six. I feel that's the right place to discuss these issues rather than making a quick decision on the budget. Thank you very much for listening to me.
Speaker 1
Please leave your contact information so we can find out who your appropriate representative is and ask them also to assist on your behalf. Thank you.
Speaker 11
Good afternoon. I'm Benjamin Feld of Giterman Giterman Feld representing some of them of the most disabled workers seeking benefits from the subsequent injuries benefits trust fund, people like miss Sanchez, including veterans, first responders, laborers, field and farm workers. We can agree that reform of the system is needed, but reform cannot be accomplished by abolishing a benefit that's existed for eighty years. It affects the very purpose of why this this benefit was created. The claim that this proposal merely manages a workload or returns the program to its original intent is simply false.
Speaker 45
It only reduces workload. And that was never the original intent of the program. Retroactive changes tied to prior findings cannot be revisited. They strip eligibility for many, while the new barriers make access nearly impossible for most others to get this benefit in the future. Again, like miss Sanchez, tens of thousands of injured workers who have spent years waiting for these benefits could lose them outright with no meaningful recourse.
Even those who qualify face diminished value that make it nearly unreasonable to go after these benefits in the first place.
Speaker 45
This is not reform. This needs to be addressed at the legislative low policy level. Thank you.
Speaker 24
Hi. Good afternoon. My name is Hannah Zuckerman. I'm born and raised Californian. I'm gonna throw on some more love for Long Beach Long Beach State alone.
Speaker 46
And I am here as part of our CWAP crew. I am work for EBACE, East Bay Alliance for a Sustainable Economy based in the East Bay in Oakland. We represent low wage workers and tenants, and CWAP has allowed us to really, really help support workers in filing those claims. We are those trusted messengers. My favorite thing about my job is I get to see the light bulb go off on, and when folks understand that they have been taken advantage in the workplace, and when they get to say, I've never learned my rights.
Why am I just learning these them now? And they're in their adulthood and just, you know, well into their work life. And so they're just understanding what their work rights at work are now. And so, CWAP funding is fundamental to workers knowing what their rights are and addressing violations in the workplace before we even need to take them to DIR or even bring them up to the state so they can, actually bring home the wages that they're owed in the first place. So please consider funding continued funding for the Seawalk program.
Thank you.
Speaker 10
Good afternoon, everybody. First of all, I wanna thank our legislators. I I I think many people don't really realize the work behind the scene work that goes on. And I wanna thank everybody here regardless of whatever all you're from. Continue to make a better place for workers.
Let's just try to make the state a better place. Real quick. My name is Leonard Brown. I'm WorkSafe. We're more on the legal side.
Speaker 1
We're also a member of CCWP on the CWAP. We our pockets is a little our pockets is little short. So we are we're trying to get additional funding. So we're asking that not only do you fund CEWA, 30,000,000 for the next five years, but also hired additional staff at the labor force so that we can continue, to hold bad actors accountable and get the workers their due just. You know?
Speaker 10
I oh, I spoke to god this morning, and he said, in god we trust, all others pay cash.
Speaker 18
Hi. My name is Jason Beck. I'm with the California Coalition of Injured Workers. And as a taxpayer, I oppose the SIBTF trailer bill. Proponents of the bill touted as a cost saving measure.
Speaker 47
However, every applicant that receives benefits is deemed permanently disabled by board certified physicians. And the responsibility to care for these disabled workers does not go away with the passage of the bill. The bill does not eliminate those costs. It simply shifts them. It shifts the cost from the private sector to the California taxpayer through an increase in welfare programs and catastrophic injury claims.
This is a budget increase bill. I implore you to do your research on the unintended consequences of this bill before you consider its passage. Thank you.
Speaker 24
Hello. Good afternoon, chair Richardson and senate budget committee. My name is Mary Nguyen. I'm the I'm with the California Healthy Nail Salon Collaborative also here for CWAP. We work with the nail salon workforce that comprises of licensed manicurists who are often Vietnamese immigrant women And a lot of the work that we have been able to do with CWAP has been educational outreach in language for our members to understand their rights as workers.
And so we hope that, you know, we hope that you are able to continue the c w op funding so that we can maintain our role as the trusted messengers of our community. Thank you.
Speaker 1
Thank you. Who's the last person in line? Okay. If you're in line, you need to get up because we actually are gonna need to close in about thirteen minutes, and there's more than 13 people. So please try to keep your comments less than a minute.
Yes, sir.
Speaker 18
Good afternoon, madam chair and other committee members. Special shout out to senator D'Arrazo. I'm not your constituent, but you are my senator.
Speaker 18
So my name is Ben Takemoto. I'm from the Fresno Madera Tileri King Central Labor Council and here on behalf of the California Coalition for Worker Power. I'm here to ask that you fully fund CWAP with $30,000,000 per year for the next five years because my daily work is educating and empowering workers by working shoulder to shoulder with them to assert their rights, recover their stolen wages, and advocate for safer and healthier work sites. Before I did this work, I didn't have language or know how to describe that I had been an exploited worker before I got into this role. So please fund CEWAP fully.
Thank you.
Speaker 48
Good afternoon. My name is Shahary Arkowski. I'm the executive director of the warehouse worker resource center in San Bernardino Riverside County. I'm also the co president of, the California Coalition for Worker Power. I'm here to echo the support for this continued funding for CWAP.
We're also part of the California Network for Immigrant Worker Justice. Wanna emphasize our support for this budget authorization from Garcia on the assembly side for the Immigration Enforcement Emergency Fund. Thousands of workers have lost work immigrant workers have lost work and economic opportunity because of the raids that have been happening for the last year. And we need to make sure that we do move some resources to take care of our most vulnerable workers. And then related to item five, which I think is related to CWAP.
CWAP cannot replace the work that happens in the in the Department of Industrial Relations. These positions that are being eliminated are critical. As we at CWAP build more cases, build more evidence, we'd be able to move cases to the state that are gonna need to be staffed, as well as build private cases that'll be able to build the PAGA fund. So all of this works as one machine. We wanna make sure that we we do keep DIR intact as we're moving to a new administration.
Because otherwise, they're gonna take that as a baseline. Thank you.
Speaker 40
the California state association of counties and strong support of the budget trailer bill proposal for the SIBTF program, we believe that TBL is critical to restore the program to how it operated for decades to ensure the program is sustainable for those who depend on it and to contain cost for public agencies. Thank you.
Speaker 2
Good afternoon madam chair senator Razo. Ashley Hoffman on behalf of the California chamber of commerce as well as APCIA today to express strong support for the budget trailer bill related to the SIBTF. We would echo the testimony of both DIR and the LAO that this is necessary not only to bring the fund back to its original intent, but to cut off what is becoming a fiscal crisis both for the department, but also for private and public employees alike and for workers who are now waiting ten years have their claims adjudicated thank you.
Speaker 28
Afternoon madam chair and members dylan Hoffman on behalf of the California coalition workers' compensation. Want to echo my comment echo the comments of my colleague from the California chamber in support of the governor's proposed trailer bill on on the SIBTF also want to express the dire circumstances for public entities related to SIBTF on behalf of Prism Public Risk Innovation Solutions Management or JPA that provides risk pooling for local entities. We pulled data on the exponential growth of the assessments for public entities from their 2020 assessment to their 2025 assessment. I've just got a few that are exemplary here. The county of LA experienced a 248% increase in their assessment.
Speaker 2
City of LA a 182% LADWP 267%. City of Inglewood 329% and the LA County Office of Education a 181. Sadly these aren't cherry picked numbers these are representative of public entities across the state and in every single district so urge a strong support for the proposed real language thank you.
Speaker 16
Afternoon Mike robson here on behalf of the american staffing association the california staffing professionals in support of the governor's trailer bill language related to the s I b t f.
Speaker 53
Afternoon here with cwp and c w p this funding is critical for the in the in the empire for in the empire black workers hundreds of thousands of black workers workers in the I e face persistent wage theft unsafe conditions discriminatory retaliation abuses that directly undermine the families and communities By fully funding the California Workplace Outreach Program, together we can ensure that black workers know their rights and can exercise them without fear of being fired or intimidated. Black workers are visible and deserve our protection. By funding CWIP for 30,000,000 for over five years, we can continue to stamp out the exploitation that California laws are written to stop. Thank you.
Speaker 41
Hi. Good afternoon. My name is Jen Kim. I'm from Clear Town and American Worker Alliance. And, based on Clear Town, I do outreach I'm organized.
Speaker 51
I do outreach for community and and with the worker. And we're asking, you know, to support the budget for CWAP.
Speaker 51
I'm gonna translate it. My name is. I'm working for. So people like us, immigrant worker, we work hard for our family, for our future. We're asking your support through this problem through CIWA.
Thank you.
Speaker 27
Hello. I'm doctor Stephane Johnson. I perform SIBTF evaluation. So for SIBTF, I'm boots on the ground. And the first thing I wanna say is that most of the patients have had devastated injuries.
And after reviewing a lot of records, I'm just not able to see the amount of fraud that was being referenced during the discussion. I also want to say that the agency's remedy for failing to have medical evidence put into the SIBTF process would not work because most cases get settled without a QME and most cases get settled before the appropriate medical evidence could have been introduced. So that would leave them out of the process. As you can tell here, there's a lot that has not been properly considered, and we request and we urge you to consider doing this through a legislative process. Thank you.
Speaker 23
Hello. My name is Eugene Day on behalf of the Crop Organization. We specialize in reentry workforce development, and we deliver these services in Oakland and Los Angeles. And I'm proud to say that almost all of our graduates find employment with $60,000 or more a year family sustaining wage. I respectfully ask you that you support our current budget ask.
Speaker 4
Good afternoon. My name is Matt Braden. I am the director of operations and one of the founders of Crop Organization. And in the three years that we've been delivering our reentry workforce development program, we have served over 200 people. We have a 0% recidivism rate.
Speaker 53
And almost everybody who's graduated from our program is currently employed in long term sustainable employment, and they are securely housed. Not only does our program save the state of California money, but it promotes public safety. So I respectfully request that you support crop organization's budget request. Thank you.
Speaker 16
I'm Emily Mills with the California Association of Sheet Metal and Air Conditioning Contractors. Want to register our support for the trailer bill language for the SIBTF. Thank you.
Speaker 19
Good afternoon. Steve Chamberlain with the California Coalition for Injured Workers. And, we oppose the trailer bill. We feel that eighty years of legislation and court precedent should not be overwritten in the budget, but should instead go through a legislative process. Thank you.
Speaker 60
Good afternoon. My name is Maria Sinea. I am a crop sales, fellow. I would like to ask that you humbly support our budget as crop has provided me with housing, the skill that I need to rebuild my life with dignity and respect. Thank you.
Speaker 43
Good afternoon. My name is John Stebbins. I am currently a fellow in the crop organization. What crop has done for me is provide me with a very high level of growth mindset and leadership training. And more importantly, my training in the a with alcohol and drug field, which currently got me registered into the field.
Speaker 55
And I will re soon be a peer support specialist state certified. And just got a job at La Familia Organization where I'll be working with the youth, which is very vital for the future of our great country. And I respectfully ask that you, fulfill their budget request. Thank you very much.
Speaker 5
Faith Borges on behalf of the California Association of Joint Powers Authorities and strong support of the governor's proposal to reform SIBTF. Most local governments utilize the jpa mechanism to self fund their workers compensation benefits and so when we're talking about annual doubling of assessment rates those are resources that are coming out of prop $98 local government budget dollars that are then not being able to be spent on those critical resources. So, we wanna elevate that message as well. Thank you.
Speaker 35
Hi. My name is Tiffany Faulkner. I'm with United for Respect. We support Walmart and Amazon workers across California by providing the resources and resources and support they need to make workplaces safe safer and more just. I urge you to support the 30,000,000 annually for five years to ask to ask to fully fund CWAP.
Speaker 47
afternoon. I'm the senior director of programs at Crop Organization, and I'm here to urge you to support our Ready for Life reentry program, an initiative that not only changes lives but strengthens communities in measurable ways. Graduates from ready for life grain gain critical digital literacy skills, mental health support, job training, employment, and housing resources that result in approximately 90% employment rates and a 0% recidivism rate. That means safer neighborhoods, reduced correctional costs, and a stronger skilled workforce contributing to our local economies. I respectfully ask for you to expand the funding to our reentry efforts.
Speaker 61
Hi good afternoon Catalina Sanchez with the California rural legal assistance foundation we are here in respectful opposition to issue five elimination of the vacant positions at dir so during the pandemic this legislature and the administration prioritized getting through the unprocessed unemployment claims at peak during the pandemic at 1,600,000, but yet since at least 2017, there continues to be a 47,000 backlog over at the in terms of the wage claims, and so Sierra Leone Foundation just greatly concerned about this elimination. Rural Legal Services Programs has currently about 250 open wage claims right now with the longest being six years, and we haven't had a hearing on that. This is comparable to the exact egregious backlog delays that the LAO audit found, and so, again, I respectfully encourage the legislature to address this backlog by staffing up and not down. And I support we support the identified 35 positions, that the JLBC identified going towards wage claim wage claim backlog and also 36 to investigate workplace safety. Thank you.
Speaker 45
Good morning, chair. Good morning, members. My name is Darius Ali. I'm a graduate of free world, org, which is a commercial driver's license training for proleys and ex felons. I myself ex felon, of course.
Speaker 60
When I came home after fifteen years, I I didn't know what to do with myself. I didn't know how to work or nothing like that. And free world presented not only just an opportunity, but a a new way of life for me. They gave me a new career through the CDL training. I was able to use my CDL to find a career in the engineers operating engineers local three union, and it changed my life.
I I I I I did a one eighty. I don't I don't recognize myself at all, who I used to be, and it's all because of free world. If you guys really care about ending recidivism, please fund this program. I've had no police contact. I've been home since 2022.
No police contact. Off parole. Married. I have a beautiful baby boy now, and my life is just going up. You know?
And and I I owe it all to free world, honestly. And I I want everyone to just to take advantage of this program. And they don't nobody knows about it. You know? In my world, they think that I got lucky.
They think that I'm a unicorn, and I'm telling them, like, no. It's, you know, it's it's real. Just gotta believe in you. You know? And, yeah, I just thank you for your time.
Thank you.
Speaker 21
Thank you, chair members. Omar Lazarda with the California Federation of Labor Unions. First, I wanna strongly support maintaining the funding and the budget for the public employment relations board. Over the past two years, we've seen labor rights at the federal level steadily eroded, and the agencies that protect and enforce worker rights themselves be hollowed out. And PERB has been able to step into that void performing over 300 private sector mediations in the past two years.
Speaker 56
And every one of those could have averted a strike by promoting open communication and facilitating this these agreements. And also with the passage of a b two eight eight from last year, ensuring that workers who have lost protection under the National Labor Relations Act, they can go to PERB to ensure that those rights are protected. At a time when workers face attacks from all directions, we have to ensure that flagship agencies like PERB are able to maintain the confidence of the labor management to resolve conflicts. Also, we wanna ensure that folks are aware that improved staffing at the labor commissioner's office remains one of our top enforcement priorities, and workers in California are facing a crisis in enforcement due to the understaffed agencies and the limitations on private enforcement. So we are urging CAL HR to streamline and update hiring and promotions to allow them to fill vacancies faster and retain qualified staff.
Speaker 21
We also wanna ensure that the legislature and the administration extend the emergency hiring period so that staff who have been hired and trained in the past year and a half can can stay there instead of being terminated when that emergency hiring authority expires. And finally, we wanna make sure that folks are aware that we are adamantly opposed to the elimination of vacant positions, especially since eliminating these positions does not save money for the general fund. They are special funded. Eliminating these vacant positions in the l LCO goes against everything we need to do to expand and strengthen the enforcement of our workers' rights. Thank you so much.
Speaker 10
Thank you, madam chair and senator D'Arrazzo. Megan Subers on behalf of the California professional firefighters here to express some concern with the administration's SIBTF proposal, as drafted and as proposed to you all there are some technical concerns that we've outlined in a letter to the committee and we've been talking to the labor agency about but I really would like to point out one deep deep concern we have with the retroactivity applicant application of the trailer bill language this would mean that for legitimate injured workers who have claims pending in the system, they would be penalized for having a claim pending in the system and we believe they would have to either reapply or wait for the department to make a determination that they're still eligible under the new requirements and then either their claim falls away or they're delayed for that period of time. This was not a problem created by injured workers so we have deep concerns about solving the issues in this manner we do think there are provisions that are worth consideration by the legislature but would like to stress concern with that provision and then just would like to suppress our express our support item number 22 funding implementation of AB eleven eighty one for firefighter personal protective equipment.
Speaker 44
Hi. My name is David Johnson. Nice meeting senator. I wanna talk about the economy that we have going on. And then we see wanna see the economy could be lower down for taxes and our rent and our economy because the people are struggling right now.
Speaker 62
I wanna see if we talk to the senator to drop the low low cost on property taxes and rent and see the economy better.
Speaker 16
Good afternoon. Matt Easley on behalf of the California chapters of the associated general contractors. We're here in support of issue four, the SIBTF budget proposal. It's imperative that we get the cost growth under control and I'd like to align my comments with my colleague from the chamber. Thank you.
Speaker 17
Good afternoon Nick Chappie with the California Trucking Association here to comment comment on issue four. We align ourselves with the comments made by the California Chamber of Commerce and urge the adoption of the governor's proposed trailer bill language. Thank you.
Speaker 1
Thank you. Nice to see you again. Alrighty. We did it. Having heard from all the members of the public, members, are there any further questions or comments?
Seeing none, thank you to all the individuals who participated in today's public testimony. If you were not able to testify or complete your comments, please submit your comments or suggestions in writing to the budget and fiscal review committee or visit our website. Your comments and suggestions are important to us, and we want to include your testimony in the official hearing records. Thank you everyone for your participation, particularly staff and our sergeants. And everyone, thank you.
We had a a big hefty day. Diego was very aggressive in his ideas, for us to cover, which were excellent, by the way. We have concluded the agenda for today's hearing. The senate budget subcommittee on number five on corrections and public safety, judiciary, labor, and transportation is now adjourned. Thank you.
Ask anything about this video — I analyse its transcript to answer.