Update: Governor Vetoes SB 799 and Refuses to Pay Unemployment Benefits to (Employed) Workers Who Choose to Strike.

Last month, in September of 2023, California Senate Bill 799 was re-introduced by Senator Anthony Portantino (D-Burbank). This bill purported to provide unemployment benefits to employees who were not laid off and, instead, were choosing to go on strike.

Last month, we discussed some very big issues if this bill ever became law and unemployment benefits were given to gainfully employed employees who make the choice to go on strike. First, California’s Unemployment Fund would become even more insolvent. Currently, California’s Unemployment Fund is in debt to the federal government to the tune of at least $18 billion, and increasing the number of unemployment benefit recipients would greatly increase this debt. Second, organized labor (which is an already powerful force in politics today) would gain even more leverage and power. Third, more jobs would be left unfilled as many employees will be incentivized to strike because they get paid during a strike, and they will (presumably) get paid MORE after a strike. Fourth, the employers and employees who are not participating in the strikes are ultimately being forced to participate by paying increased taxes or receiving less in benefits.

Well, we finally have some good news for employers! Governor Gavin Newsom recently vetoed the legislation on September 30, 2023. Governor Newsom stated, “[a]ny expansion of eligibility for [unemployment] benefits could increase California’s outstanding federal [unemployment] debt projected to be nearly $20 billion by the end of the year and could...significantly [increase] taxes on employers.” Likewise, the California Chamber of Commerce estimated that the cost to pay striking employees would have been around $215 million. This is good news for California employers.