California’s Unemployment Insurance Fund in Crisis: Bill to Help Striking Workers Hits Roadblock; Employers May Face Tax Hike

California Bill to Provide Unemployment Benefits to Striking Workers Fails in Committee.

California Bill Hits Roadblock

A California bill to provide unemployment benefits to striking workers has stalled in the state legislature. Governor Gavin Newsom vetoed a similar bill last year due to the state’s $20 billion debt to the federal government, according to the report of Just The News.

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(photo: Fortune)

Debt Mounts, Employers May Face Tax Hike

California business groups including the California Chamber of Commerce claim that the proposed bill would unfairly burden employers with the cost of subsidizing striking workers even those who have never been involved in a strike.

California’s unemployment insurance fund is already deep in debt owing $20 billion to the federal government and is projected to reach a staggering $21 billion by 2025. This crippling debt could result in a significant loss of federal unemployment tax credits for employers.

Since 2020, California has been forced to borrow from the federal government to cover unemployment benefits resulting in a staggering loss of $55 billion due to fraud and overpayments. Moreover, the state auditor has officially declared California’s unemployment insurance fund “structurally insolvent” highlighting the urgent need for financial reform.

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