The political fight over whether workers on strike should be allowed to collect unemployment benefits is reigniting in Washington. U.S. Rep. Adam Schiff, a California Democrat who is running for Senate, is planning to introduce legislation on Tuesday that would provide unemployment benefits nationwide to workers on strike.

Most states don’t allow striking workers to collect unemployment with the exception of New York and New Jersey. Eligibility requirements and the amount of weekly unemployment pay also varies by state. Under the Empowering Striking Workers Act of 2023, workers would be able to collect unemployment pay after two weeks on strike, according to a draft of the bill viewed by The Times.

Workers would also be eligible for unemployment benefits starting on the date a lockout begins, when the employer hired permanent replacement workers or if the worker becomes unemployed after a strike or lock-out ends, whichever is earlier. Democratic U.S. Reps. Donald Norcross of New Jersey and Alexandria Ocasio-Cortez of New York also are sponsoring the bill.

Labor unions SAG-AFTRA, the Writers Guild of America, the Teamsters and the AFL-CIO are supporting the legislation as well, according to Schiff’s office. But with Republicans controlling the House of Representatives, the odds that the bill will pass are slim. Businesses have strongly opposed the idea because they said it would lead to higher employer taxes.

Employers pay state and federal payroll taxes to fund the unemployment insurance program. The expected introduction of a federal bill comes after California Gov. Gavin Newsom vetoed state legislation in September to provide unemployment for striking workers. Newsom said he did so because of financial concerns, a move highly criticized by labor leaders.

California borrowed billions of dollars from the federal government to cover unemployment benefits, and the state’s unemployment fund debt was projected to be nearly $20 billion by the end of the year. California’s unemployment pay is $450 a week for a maximum of 26 weeks. Business fought the bill because they said they would pay additional taxes annually to repay California’s loan from the federal government.

The WGA and SAG-AFTRA lobbied for the expanded benefits, saying that they would help workers pay their bills. While members rely on side jobs and strike funds to stay afloat, that income dwindles the longer a strike goes on. The 148-day Hollywood writers strike ended after WGA members ratified a new contract.

Actors and crew members represented by SAG-AFTRA have been on strike for more than 100 days. Democrats have expressed support for labor unions ahead of the 2024 elections. Labor unions including the International Brotherhood of Teamsters, the Communication Workers of America and the Amalgamated Transit Union have endorsed Schiff for Senate, while other unions have endorsed his main Democratic rivals in the race.

During an October debate in Los Angeles, Schiff, along with California Democratic Senate candidates Barbara Lee and Katie Porter, disagreed with Newsom’s decision to veto the bill to provide striking workers unemployment benefits. He mentioned during that event he was working on federal legislation.

“When they go and strike for better work and better wages for themselves and others, they need to have unemployment compensation, because they’re striking for all workers,” Schiff said at the debate.

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SACRAMENTO, Calif. (AP) — Southern California’s summer of discontent — marked by a series of work stoppages from hotels to Hollywood — has inspired labor-supporting Democrats in the state Legislature to try and change the law so striking workers can get unemployment checks while they picket for better pay and working conditions.

The bill, introduced this week, would make California just the third state to do this, joining New York and New Jersey. But unlike most states, California currently doesn’t have enough money to pay the benefits owed to unemployed workers. Business groups who oppose the bill argue making more people eligible for those checks will only make the problem worse.

Labor unions and progressive policy groups say businesses are to blame for not putting enough money into the fund that pays unemployment benefits. The fund is filled by a tax that businesses must pay per each worker. But the tax only applies to the first $7,000 of employee wages — a figure that have not changed since 1984 and is the lowest amount allowed under federal law.

The state Legislature has twice increased unemployment benefits since then, once in 1989 and again in 2001. It’s why California’s unemployment insurance trust fund “has consistently been one of the most imbalanced in the country,” said Jared Walczak, vice president of state projects for the Tax Foundation, a nonpartisan tax policy group.

“Something has to give,” he said. “Either the benefits need to be less generous or the tax is higher or both. But the state has just chosen to live on the edge for decades.”

The issue could cause one of the biggest fights in the final weeks of California’s legislative session this year, heightened by the ongoing writers and actors strike and future potential work stoppages — including a possible strike of 85,000 health care workers at Kaiser Permanente, the country’s largest nonprofit health care provider.

States usually run out of money to pay unemployment benefits during periods of high unemployment, like a recession or the coronavirus pandemic when governments forced many businesses to close. But this year, despite three years of record job growth, California estimates benefit payments will exceed tax collections by $1.1 billion. It’s the first time this has happened during a period of job growth, according to the nonpartisan Legislative Analyst’s Office.

While businesses only pay unemployment taxes on the first $7,000 of their workers’ wages, employee paychecks have been increasing. Today, the average full-time California worker in the private sector makes about $67,000 per year, according to Alissa Anderson, senior policy fellow at the California Budget and Policy Center.

“Businesses are paying a payroll tax on a smaller and smaller share of workers’ earnings over time and it’s not sustainable,” she said. “You can’t finance a program that way.”

Meanwhile, California still owes the federal government more than $18 billion, which is money that was borrowed to pay unemployment benefits during the pandemic. The state will likely spend the next 10 years paying off that debt, plus interest.

Most other states used some of the billions of dollars in federal coronavirus aid to pay off their debts. But to the consternation of business owners, California did not — and instead spent it on things like rebates for taxpayers. This year, businesses began paying an extra $21 per employee to begin paying off that federal loan. But even with that increase, it’s still not enough to cover the amount of benefits that California is paying to unemployed workers.

That’s one reason why business groups say the state can’t afford to make more people eligible for unemployment benefits.

“We are hopeful that the legislators will understand you don’t add things to the credit card when you are deeply in debt,” said Rob Moutrie, policy advocate for the California Chamber of Commerce.

But labor unions view unemployment checks as benefits that workers earn while on the job. If the government won’t let workers receive those benefits during a strike, then they are “putting their thumb on the scale on behalf of the employer” in a labor dispute, said Lorena Gonzalez Fletcher, chief officer of the California Labor Federation.

Fletcher, a former state assemblymember who tried in 2019 to pass a similar bill, said the Legislature ultimately will have to change how the state pays for unemployment benefits. But she said that the larger issue should not distract the Legislature from supporting striking workers.

“There is a problem, yes, with or without this (bill),” Fletcher said. “Making these set of workers run the risk of homelessness or food insecurity because the employers have not been part of the solution in fixing their underfunding is ridiculous.”

Raising taxes on businesses would be difficult, despite California’s reputation as a high-tax state. John Kabateck, state director for the National Federation of Independent Business, said business owners pay lots of others taxes in California.

“To allege that small business owners have not been paying their fair share is absurd and frankly insulting,” he said.

Cutting benefits would also be tough. California unemployment benefits cover about half of what a worker was previously earning, according to Anderson, the senior policy fellow at the California Budget and Policy Center.

“Many people can’t live on half their salary for very long,” she said.

The bill is authored by state Sen. Anthony Portantino, a Democrat from Southern California who is also running for Congress. Portantino said the health of the state’s unemployment insurance trust fund will be part of the conversation surrounding the bill. But he said it “shouldn’t be used as an excuse for one side or the other.”

“It’s hard to be on strike,” he said. “Some people have this romanticized view of it. There’s nothing romantic about it. This is a life-and-death family struggle for many people in California.”

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