Senate Budget Sub5 — 2026-04-23

Consultant, would you please call the roll?

Richardson, present.

Durazo, present.

Sayardo, present. The consultant, Diego, here, notes that a quorum has been established.

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 EDD Next our top modernization effort as the chair mentioned We made real progress It never been easier to apply for benefits Customer satisfaction for disability and paid family leave has increased significantly since 2023. 91% of unemployment customers say filing a claim online is easy, with 96% 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 taken 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 246 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 the chair mentioned, by Ajit, our CIO, and Caleb, our CFO, and we are happy to answer any questions. Thank you.

Oh, no, no, no, no, no. Sorry.

No problem.

Good morning. Chaz Alamo with the Ledge Analyst's 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. It 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.

Cynthia Elmore, Department of Finance. Nothing to add.

The project date has moved from 2029 to 2031. So what's the current total estimated cost at completion? 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 delays? Thank you, Madam Chair.

I guess be a little bit more specific of why you're so sure of meeting these time and financial goals.

Okay, great.

I would just add, because I can't help myself, I would just add that 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 200, 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 not none of them is like well if that doesn work then this is not going to work You know we update we did chat bot Then we did you know automation of X Y and Z you know things like that So I think that that that makes us feel as confident as we can feel

Thank you.

Quinn Bunnell may be able to respond to that. Or Ajit? Go ahead, Quinn.

2028?

Okay, great. Thank you. Thank you. And then regarding 1058, can you provide an update on that, the language that will be used on those applications, and explain how the race ethnicity data will remain confidential and will not be used to determine program eligibility. I know that's a really specific question.

Okay. Okay, great. Those are all my questions. Thank you.

Thank you. So I'd like to, good Senator, have been here long enough, but I was in the Assembly when this started during the pandemic. And we were alarmed, basically, at what was our inability as a state to deal with some of the issues. and the over impacts of what happened during the pandemic. So when you were brought on, I think the specific direction was fix this. And one of the bigger issues was the fraud issue. And so I'm kind of curious what kind of, you know, through this new programming and stuff, 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 what's our status as far as the more fraudulent or questionable type of claims? And if we're massively reducing that from the $30 billion or so that it was to something that is more reasonable, which is not pretty much zero is reasonable. but I know that's a hard number to get to.

So that's great because, and that's great news because, you know, that was one part of it was stemmed the time, stop the bleeding. And then the second part was the longer process that we're going through now. And I think we're in unison where everybody agrees that I think we're making good progress 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 make it so that it serves the needs of the people that need it. One of the things that was brought up, you talked about the different vendors that we use. And, you know, it had been around a long time. And a lot of times vendor contracts start out at this and then because everybody wants to be the low bid. And then later on they wind up like this. Have we had a lot of cost overruns? or that are...

I would appreciate that. I'll be honest, the change requests and cost overruns are part of IT projects,

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 appreciate all the work that you guys are doing and to create a department that we can all be proud of So thank you Thank you for your support Senator Thank you Senator Sciardo 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 systems can withstand claim levels like the state saw during the pandemic?

Okay. And then building upon the last question of Senator Sciardo. Do you publish the change order items that are requested and then the additional funds and things that are required?

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?

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 Mr. 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, I need more money to complete this particular part.

And so what does 10% equate to?

So- Which is what?

So how much have we added so far?

My question is specific to the change orders. How much additional cost has been added? Go ahead, Caleb.

Well, but we could save some money, too. There's nothing wrong with you don't have to spend $1.2 billion, you know.

We're kind of, we're in situations here very dire. And so I realize that you may build into the contract. I did a little work in this area myself. You know, I realize that what we call in the industry, you know, maybe pad the, you know, let's say you think the project's going to cost, you know, a billion and you add, you know, 200, you add 200 million to that to make sure that it covers any potential change requests that you have. But I just want to stress in these particular times, really in all times, frankly, we shouldn't look at things just that you have $1.2 billion. We should look at minimizing as best as we can. And if you are, and if you notice several of us are asking the 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 than 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 concern that people would have.

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?

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 Thank you Madam Chair for the question Yeah as was pointed out in the opening and I think by LAO by Chaz ICMS it still focuses on the replacement integration of all of the programs.

Okay. The reason why I wanted to give you that opportunity is because you said 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 phase two objectives, such as enhancing the customer-facing portal with real-time identity project, enhance user administration, and enhance customer data analytics?

Thank you. My last question has to do with, it's my understanding, and you referred to it, that EDD is utilizing various contractors and 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?

Okay. Thank you very much. With that, no further questions?

Just a question about SB 590, and you don't have to provide it now, but information about that addresses equity concerns, which partially or mostly led to SB 590 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 it. Thank you.

Thank you.

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 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. Thank you very much, Chair Richardson.

Thank you. I'm Emily Sunihara, 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 over the next five years to bring us back in step with our baseline funding. In fiscal year 2022-23, 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.

The request for additional appropriations is sort of consistent with precedent on setting levels for acknowledging the pandemic era uptick in grant authority going through CWDB. Thank you.

Cynthia Elmore, Department of Finance. Nothing to add.

Yes. A couple of specific ones. One specific one has to do with the High Road Construction Careers Program at Caltrans. Is a $30 million grant being administered by the board. But SB 150 originally allocated 50 million in federal funding for this purpose. So have we now shifted to using state dollars instead of what was supposed to have been federal dollars? That is correct.

Allison Hewitt, Department of Finance. I don't, unfortunately, I don't think we have our Caltrans colleagues with us. And 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 million go if this is $30 million? 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.

Absolutely, and thank you for that question. So all of our state grants to date have been one-time funding. We staffed up in 2022-23, as I mentioned, as a response to a large influx of one-time funding. Our statute 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.

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, and there's even a scarcity of staffing. We talk about that all the time. There's numerous examples of that. I don't understand why we would be going in the opposite direction, but we can say in the business community, which is great, have grants, have the staffing,

So I just want to understand the philosophy behind it or the thinking behind it, the rationale behind it, putting aside then we could talk about, okay, this program needs money or this grant didn't come, whatever the particulars are as far as funding. But the direction is so obvious here, I don't understand. And maybe someone else wants to respond to that, but it's a dramatic change. Obviously, my colleagues are much more knowledgeable about their programs.

why would the administration reduce staffing for workforce development?

Thank you for that.

Okay, I don't want to beat a dead horse, but 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 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 going to be the new policy. So that's the bottom line, is without funding, it's not a reality. So let's not, why don't we make that part of GoBiz? You know, why don't we drop GoBiz down to 42? We don't because it's important. So that to me is the bottom line. Thank you, Madam Chair. Thank you, Senator Durazzo. So Senator Sayardo?

Yes.

And what the good senator was talking about was basically the part of the job that's no longer there. And so those employees, if we kept them on, would be doing essentially overlap. of what other employees are already doing, An additional expense that we'd have to fund, we'd have to provide the additional funding that we're not doing now because it's part of that grant funding, correct? We're responding to closing out of grant programs and those staff no longer being allocated to those grants.

Yes.

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?

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 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 your particular agency in your department in helping workers to prepare for that?

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 going to need to do to assist the workforce?

I don't want to 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 a grant perspective or whatever it might be to deal with this coming down the road.

Okay.

Workforce Development Board to produce and submit a report to the legislature, evaluating those grant programs by October 1st of every odd year. The bill would also establish new reporting requirements for the Breaking Barriers to Employment Initiative and the prison 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. This proposal would streamline that down to one. Thank you.

Chaz Alamo, the LAO, no issues with this proposal.

The Elmortar Department.

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 is already investing in re-entry workforce programs, why would reporting requirements be conditional on future appropriations rather than to existing funding?

Okay. Thank you.

Okay. I only had one question. What is the total cost savings to the board for implementing and consolidating these reports?

Thank you.

I was asked to just do a quick overview of the department, and then I'm actually going to 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 million 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 safe workplaces, and supporting a level economic playing field. DIR is California's primary labor and 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 approaching $1.5 billion. Collectively, we 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. CalOcean ensures 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 in 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 to support all of the programs in 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 going to yield my seat to one of the people who are going to be on the panel for the next, or for the item that you announced, which is the subsequent injuries benefits trust fund, which is one of the administration's highest priorities in getting reforms to this year. I will be in the audience.

Good morning, Madam Chair and committee members. I presenting on issue four the Subsequent Injury Benefits Trust Fund Trailer Bill language Are you Jazzy Yes sorry Jazzy Graywell with Labor Agency Thank you Over the last several years there has been an unsustainable growth in the SIBTF program 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 2010 to 2014, around 850 new SIBTF 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 2023, there were over 15,000 pending cases in the backlog. We expect the backlog to exceed 30,000 open claims by July of this year, doubling the backlog in the past five years alone. Without amendments to the SIBTF statutes to slow the growth of cases and reduce SIBTF liabilities, DIR estimates total liabilities will increase to approximately $30 billion by fiscal year 2930. This is a $7 billion increase from last year's estimate alone. The impact on the employer assessment is expected to grow from 14 million in fiscal year 2015 to 1.5 billion in fiscal year 2930. Public self-insured employer share has grown from 19 million to 250 million in that same time frame. and the state share is expected to grow from $3 million to $44 million. 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 want to 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, SIBTF does not. For SIBTF, 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 SIBTF 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 billion. By applying the reforms to the backlog, we would be able to reduce liabilities across all public employers by $3 billion. More specifically, the state of California would reduce liabilities by $500 million. dollars, LA County and city would reduce liabilities by $900 million, and public education by $600 million. With these changes, the administration estimates that the growth of the program We'll return to manageable levels, ensure claims are timely processed for our most severely injured workers, and avoid increasing costs 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 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.

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 150 per year. And accelerated case resolution, reducing waiting time from the current 5 to 10 years to about 3 to 5 years. With the proposed comprehensive reforms and these resources, the program will return to 2015-16 benchmarks within five years, resolving the backlog of existing cases within 10 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.

I'm just answering the technical questions.

Thank you, Chaz Alamo with the LAO. So last summer, our office released a report assessing the state's CYBTIF program and the major fiscal risk and liability that are associated with the program. Our report pointed out that the CIDTIF program has evolved over time to include 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, 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. 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 CIDTIF to its existing original intent A couple additional comments The program was relatively small 10 or 15 years ago a few hundred 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 caseload. So these are the cases that are in that, not Q, but I don't want to call it a backlog, but 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 CIDTIF eligibility standards that were originally intended. To take a moment to discuss 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 aligned on them in the budget. I think that comparison to the UI loan 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 billion, and CIPTIF liability is currently estimated to be about $30 billion. Happy to take any additional questions. Thank you so much.

Grace Henry, Department of Finance available if there are any questions.

Thank you, Madam Chair. I appreciate all the work that's being done around it, and I'm glad we're tackling it rather than just ignoring it the way that we do with the UI. And I want to go to your comment about returning to the original intent. So I get having to do that. the bill requires pre-existing conditions to be documented before the subsequent injury. So how will DIR handle cases where a worker had a real pre condition that wasn formally documented Is there a hardship or appeal process for that

The original, would you say, CIPTIF?

So the trailer bill will route CIPTIF medical evaluations through the QMA process. But this 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 absorb these cases without further delaying resolution for other workers who have been waiting months or even years

Okay. Got it. The trailer bill applies retroactively to 30,000 open, non-final cases, including cases where workers have been litigating in good faith under existing law for years. has the DIR modeled how many pending claimants would lose eligibility under the new labor disabling standard,

So since we don't have all that information, Tracking it would be really important, you know, just to see what's the reality out there. And then finally, just one more question. The governor vetoed AB 1329 and called for comprehensive reform through the budget process. That trailer bill is now before this subcommittee, this trailer bill language.

I'm also happy to take that question, if that's okay.

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 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, 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 in 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. And those workers need to see much faster 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.

Alamo.

Thank you for asking.

I don't want to step on.

and I think I only wanted to add a bit of nuance. The legislature has not set the eligibility standards for the CIPTIF program. The laws were written rather vaguely in the 1940s, And what has happened is that a series of decisions, some made by the legislature, unintentionally affected eligibility for CIPTIF. 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 an elimination of an eligibility for a worker is, I think, giving the sense that the legislatures recently allowed for all of these uses, when in fact it was sort of the evolution of the program rather than specific, explicit legislative action like contemplated with the TBL I appreciate your comment because that gives greater context to what we talking about here

Thank you. Senator Ciardo.

I have no further questions, as my colleagues have perfectly brought the key points forward, although I do have one point of personal privilege. Ms. Grewal, is your title Deputy Secretary of Legislation?

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.

Put that in writing and make sure it's in your documents. With that concludes, and see even Senator Durazzo concurs. So you got two there, two out of three. That concludes issue number four. We're now going to 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 Mr. Iverson, I believe, is staying our CFO of DIR. Let's see if you can match Jazzy. I think she's got you pushed on there.

The LAO. Chaz Allen of the LAO.

Thank you. Department of Finance.

Thank you. Senator DeRazzo?

I'll start and I will probably pass it off to my colleague for the DIR specifics. Yes, obviously general fund was the priority because that was the structural gap that had been identified. But within the control section language, the 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, 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 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 a special fund component of that.

Yes, thank you, Senator. As Allison mentioned, it was a statewide approach. There were 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 kind of spread this out over all of the department's divisions. Director Osborne, when she testified, mentioned a few of them. Labor standards enforcement and Cal-OSHA 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 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 the removal reflects a balancing of priorities across the entire department. As a result, yes, there are some flexibility considerations, 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.

Thank you, Senator Durazo. I want to 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 should not be done smoothing out, you know, just taking numbers and say, okay, I want to take, we got to do 10,000 jobs and we're going to 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, 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 Durazo. I'm a little concerned with the view of, well, we know we need to cut, and so we're trying to spread it out. And 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 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 going to 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 Durazo has stated.

All right. So you're going to get that back to us?

Okay, thank you, sir. All right. With that, seeing no further questions, that's going to conclude issue number five. We're going to move. Oh, I'm sorry. I had one question. Does this department utilize the temporary help blanket program?

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. And we could eliminate the temporary blanket program. How about that?

I appreciate that, Madam Chair. That was really a rhetorical. I'm glad to hear that. So 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. So if you could help us maybe with a little more details on the background. That would be great.

Yes, I understand. Okay, that concludes issue Issue number five, we're now going to move to issue number six. And the CFO is going to 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 going to have Deborah Lee, the Chief Division of OSHA as well. then Mr. 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? Thank you, Madam Chair. Again,

Thank you. Who'd like to go next of you two? You're just here to answer questions in support. Okay, thank you.

And Department of Finance? Okay.

Okay, I didn't hear you very good.

Hello.

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-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 6315 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 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 and investigate those. And 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 the chief investigator.

Could you say that one more time? Yeah. What do you do or what happens with your families and the employers during this time? During the time of the investigations?

So during the time of the investigation, we are interviewing people from typically from the employer's staff, if that's necessary. They know that we're conducting a criminal investigation. Does that answer your question, Senator Durazzo, for the employer?

It might get a little wonky. If it keeps up, we'll have you switch over now. Okay.

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 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 CalOSHA doesn't engage with them. That just means in the criminal bureau.

Okay. Thank you.

Want me to answer that?

My co-panelists, if they 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 it's hard for me to say, because we have not been adequately staffed, how long it will take. I think it will be relatively quick to get through the fatality backlog. 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.

Grace Henry, Department of Finance. And I just want to 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 a current amount of cases, as the chief Lichita was saying, that these resources would go a long way to addressing. And we will absolutely get back to you with those projections. Thank you.

Yes. Good afternoon. I'm Catherine Zaleski, and I appreciate your fears of my name. And as you know, I'm the chair of the WCAB. Labor Code Section 5909 requires us to act on a petition for reconsideration of a decision issued by a workers compensation judge within 60 days 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 15 days to issue that report. Under former Section 5909, the 60 days began to run when the petition was filed. Any delay in transmitting the case did not extend the 60-day period. As a result, the ability of the WCAB to act on petitions within 60 days was substantially limited. In order to meet the 60-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 July 1st, 2024, Section 5909 was amended so that the 60 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 July 1st, 2024, to 460 as of April 21st, 2026. Additionally, we have been able to limit the numbers of cases that we grant for study because we have a true 60-day period to consider the petitions as they come to us. This amendment is set to sunset on July 1st. We're asking that the sunset be repealed and the amended version become permanent. I'm happy to answer any questions that any of you may have.

Heard of support.

No.

Okay.

One question. What's the size of the remaining backlog?

Oh, and that, so that before the change it was 637?

Thank you.

No.

Thank you. Yes, ma'am.

Actually, if you don't mind, I'll go first.

Okay, thank you, appreciate it. Josh Iverson, Chief Financial Officer at DIR. The department requests approximately $18.2 million annually from the Apprenticeship Training Contribution Fund to increase training grants for building and construction trade apprenticeship programs from the current level of $3 million to $20 million per year through fiscal year 2930, 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 underutilize 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.

Thank you, Senator Durazzo, for the question. The current fund balance is in the neighborhood of about $80 million. dollars. That's why it gives us great confidence to put forth this proposal to increase the annual grant amount from three million to twenty million 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 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 $3 million, we'll definitely come back and discuss it with the legislature on what maybe we can put into place at that time.

Thank you.

Go ahead. Good afternoon. Josh Iverson, Chief Fiscal Officer at DIR. DIR requests two permanent positions and $336,000 in fiscal year 2627 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 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.

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-apprentices, and what share pre-apprentices successfully enter registered apprenticeships? Obviously, that has to be part of the goal, right, to actually move through the apprenticeship programs. so first that any information on that? Yeah 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 follow up specifically since those were about two programs. One thing that I will just clarify is DAS obviously does run 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 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 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 pre-apprenticeships so that we can have exactly those kind of metrics. 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 12 weeks. So the completion rate is usually pretty high on those. Where there's more variation in completion rates is in apprenticeship programs. So I will say the key metric that we track with pre-apprenticeship is more around the matriculation into an apprenticeship program. So we have the stronger data around that.

Winter, maybe? Winter, perhaps?

Thank you. Thank you, Senator Durazo, for not only your good questions but covering for me there. You're a great wingman all the time. 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 there's been a model for federal programs and other states. So if you could get that to me, that would be great.

Whatever you have. Whatever. Okay. I know it started with $50 million over three years, right?

Thank you. Seeing no further questions, that's going to 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 Ms. Garcia Brower from the Labor Commissioner with the Division of Labor Standards and Enforcement. Mr. 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 going to do Ms. Brower first Mr. Iverson

well she's prepared too go ahead Mr. Iverson

Thank you. Ms. Brower, did you have anything you'd like to add?

Okay, thank you. All right, LAO office, any comments?

Thank you. Department of Finance, anything you'd like to add?

Thank you. Senator Durazzo?

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 demand letters under Labor Code 238-240, 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.

I do not have that.

Thank you, Senator Durazo. Seeing no further questions, that's going to conclude our issue number 10. Thank you for your participation. Before we move on to public comment, I want to give Senator Durazo any final opportunities of questions or comments based on today's agenda.

Thank you. Thank you very much. With that, that concludes all of the items that we have. and now you may want to 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. Thank you. Thank you very much. Cesar.

Just a moment. Could everyone please keep things down so we can hear the comment? Just a moment. Let them get a chance to. Okay, go ahead.

Thank you for staying. Good afternoon and thank you for your patience while you're with us. We'll be very brief.

Thank you. Hello.

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 going to say please summarize. Okay. All right. Yes, ma'am. Great. Thank you.

Please summarize.

Thank you.

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. we provide a direct Know Your Right education to all workers and the owners in multiple locations. I think this truly demonstrates the CWAP program, help us to build a partnership among owners and workers and community organizations 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. 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. Good afternoon, Chairman Wicherson and the members of the Senate Budget Committee. My name is Kami Johnson, raised in Long Beach. Now I'm a current resident of Englewood. Just wanted to let you know. I'm from the Southern California Black Worker Hub, represent over 15,000 black workers across Southern California. I'm a proud resident of Englewood, California, and I'm asking you to support Allegation for $30 million per year for five years to fully fund our California Worker Outreach Program, CWOP. especially as tourism events are coming and world events are increasing I right nearby All of the areas that are world events that are happening and are coming in our city We want to ensure our workforces are informed and protected. This is our trusted, we are trusted messengers. Keep us connected to our government agencies and worker right protections. Please adequately fund CWAP. Thank you. Hi, good afternoon, y'all. My name is Sirach McKeel, and I'm a black worker organizer at eBase in the East Bay. Alongside these wonderful people from all over the state, I'm in support of full CWOP 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. Thank you. You did excellent, less than a minute. Hola, buenas tardes. 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 Serrato'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. Thank you. Great job. Thank you. 30 seconds, you were great. And your name is Laura, right? Laura. Flower. Flower, excuse me. Alka-Seltzer is. Good 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. Thank you. Wow, great. 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 10. 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 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 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. Now moving to items five and 10, I am also here, obviously, at the Center for Workers' Rights, but also speaking for Wage Justice Center, LA Worker Center Network, Santa Clara Wage Theft Coalition, BetSetic 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 mission and ensuring California labor protections are actually enforced The workload facing current DIR staff cannot be overstated, and reducing staffing will only limit workers' access while worsening morale and retention among existing workers. On item 10, the impact of judgment enforcement 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. Please send them a rise. 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. Thank you. Good afternoon, Chairwoman Richardson and committee. My name is Minnie. I am with the Web Resource Center. We are based out in the high desert, Apple Valley, 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 businesses and communities and just educating the workers so that they don't have fear and being retaliated against, whether it's wage theft or discrimination. So you helping to keep the funding going is helping us to do our job in educating the community. Thank you. Thank you very much. You're welcome. Good afternoon, Chair. Chairman, Richard Sallott, and members of the Senate Budget Committee. My name is Nerissa Gonzalez 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, they are families trying to survive, Fair and strength to provide individuals fighting for dignity and fairness. Thank you so much. Thank you. Excellent. Thank you. Good afternoon, Madam Chair, Senator Raza. Paul Bauer with ACTEM on behalf of Free World, which is an end-to-end employment platform for returning citizens for the formerly incarcerated. We support a $6 million augmentation for the Workforce Development Board to help gain employment for formerly incarcerated individuals, 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. 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 full employment for individuals to help them on their path as they return home. So thank you for your consideration of this matter. Thank you. 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 Assemblymember Garcia on a budget request 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. 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 this support to our immigrant families who so desperately need this support. Thank you. Thank you. Good afternoon, respected senators and subcommittee members. My name is Scott Warren and I'm a qualified medical evaluator. Three years ago, I evaluated Ms. 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 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 gonna turn it over to Ms. Sanchez. Thank you very much for listening today. Thank you for coming. 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. But in 2018, I lost my arm and now what was easy before was almost impossible. My case with the SIVTF has been taken years and I'm afraid that in these changes, the proposed, the budget that I would remove the opportunity to be heard before I would be resolved my situation. 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. ese es el lugar donde se deben de discutir estas cosas. No es una decisión rápida del presupuesto. Muchas gracias. 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 Assemblymember Liz Ortega's bill AB 1576. I feel that's the right place to discuss these issues rather than making a quick decision on the budget. But thank you very much for listening to me. Thank you. Muchas gracias, senora. 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. Gracias Good afternoon I Benjamin Feld of Getterman Getterman Feld representing some of the most disabled workers seeking benefits from the subsequent injuries benefits trust fund People like Ms. 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 80 years. It affects the very purpose of why this benefit was created. The claim that this proposal merely manages a workload or returns the program to its original intent is simply false. 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 Ms. 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. Please summarize. This is not reform. This needs to be addressed at the legislative policy level. Thank you. Thank you. Yes, ma'am. Hi, good afternoon. My name is Hannah Zuckerman. I'm born and raised Californian. I'm going to throw on some more love for Long Beach, Long Beach State alone. And I am here as part of our CWAP crew. I work for eBase, 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. And when folks understand that they have been taking advantage in the workplace, and when they get to say, I've never learned my rights, why am I just learning them now? And they're in their adulthood and just well into their work life. And so they're just understanding what their 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 continued funding for the CWAP program. Thank you. Thank you. Good afternoon, everybody. First of all, I want to thank our legislators. I think many people don't really realize the work, behind-the-scenes work that goes on. And I want to thank everybody here, regardless of whatever I argue from, continue to make a better place for workers and try to make the state a better place. Real quick, my name is Leonard Brown up on WorkSafe. We're more on the legal side. We're also a member of CCWP under CWAP. Our pockets are a little short. So we're trying to get additional funding. So we're asking that not only do you fund CWAP, 30 million 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. I spoke to God this morning, and he said, and God we trust, all others pay cash. Thank you for being here. Yes sir Hi my name is Jason Beck I with the California Coalition of Injured Workers And as a taxpayer I oppose the SIBTF trailer bill Proponents of the bill tout it as a cost measure However every applicant that receives benefits is deemed permanently disabled by board 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. Thank you. Hello. Good afternoon, Chair Richardson and Senate. budget committee. My name is Mary Nguyen. 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 are able to continue the CWOT funding so that we can maintain our role as the trusted messengers of our community. Thank you. Thank you. Who's the last person in line? Okay. If you're in line, you need to get up because we actually are going to need to close in about 13 minutes, and there's more than 13 people. So please try to keep your comments less than a minute. Yes, sir. Good afternoon, Madam Chair and other committee members. Special shout out to Senator DeRazzo. I'm not your constituent, but you are my senator. That's right. So my name is Ben Takemoto. I'm from the Fresno-Madera-Tolary-King Central Labor Council and here on behalf of the California Coalition for Worker Power. I'm here to ask that you fully fund CWOP with $30 million 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 CWAP fully. Thank you. Thank you. Good afternoon. My name is Shahari Arkauschi. 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 the continued funding for CWOP. We're also part of the California Network for Immigrant Worker Justice. Want to 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 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 going to need to be staffed. as well as build private cases that be able to build the PAGA funds So all of this works as one machine We want to make sure that we do keep DIR intact as we moving to a new administration Because otherwise they going to take that as the baseline Thank you Thank you Good afternoon, Julissa Caja-Cardenas on behalf of the California State Association of Counties in 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 costs for public agencies. Thank you. Thank you very much. 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 10 years to have their claims adjudicated. Thank you. Thank you very much. Good afternoon, Madam Chair and members. Dylan Hoffman on behalf of the California Coalition on Workers' Compensation. I want to echo the comments of my colleague from the California Chamber in support of the Governor's proposed trailer bill on the SIBTF. I also want to express the dire circumstances for public entities related to SIB ETF 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 L.A. experienced a 248% increase in their assessment. City of LA, 182%, LADWP, 267%, City of Inglewood, 329%, and the LA County Office of Education, 181%. Sadly, these aren't cherry-picked numbers. These are representative of public entities across the state and in every single district. So I urge your strong support for the proposed trailer bill language. Thank you. Thank you. Good afternoon. Mike Robeson here on behalf of the American Staffing Association and the California Staffing Professionals in support of the governor's trailer bill language related to the SIBTF. Thanks. Thank you. Afternoon here with CWOP and CCWP. This funding is critical for the Inland Empire black workers. Hundreds of thousands of black workers in the IE 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 CWAP for 30 million for over five years, we can continue to stamp out the exploitation that California laws were written to stop. Thank you. Thank you. Great job. Thank you. Hi, good afternoon. My name is Jen Kim. I'm from Korea Town Immigrant Working Alliance. Based on Korea Town, I do outreach for community and with the worker. And we ask to support the budget for CWAP. Thank you. I'm going to translate it. My name is Pap Unet. I'm working for Kowei. People like us, immigrant workers, we work hard for our family, for our future. We're asking you support through this program through CWA. Thank you. Thank you. Thank you for coming. Hello, I'm Dr. Stefan Johnson. I perform SIBTF evaluations. So for SIBTF, I'm boots on the ground. And the first thing I want to 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. Please leave your contact info. Thank you. 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 that you support our current budget ask. Thank you so much. Thank you. 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 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 organizations budget request. Thank you. Which program was that? What? Crop Organizations, CROP. And what department are you funded out of? So the CWAP also? Okay, thank you. Afternoon, I'm Emily Mills with the California Association of Sheet, Metal, and Air Conditioning Contractors. Just want to register our support for the trailer bill language for the SIBTF. Thank you. Thank you. Good afternoon, Steve Chamberlain with the California Coalition for Injured Workers. And we oppose the trailer bill. We feel that 80 years of legislation and core precedent should not be overridden in the budget, but should instead go through a legislative process. Thank you. Thank you. Good afternoon. My name is Mariah Senea. 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. Thank you for being here. 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 alcohol and drug field which currently got me registered into the field And I will soon be a peer support specialist, stay 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. Thank you. Congratulations and good luck.

Thank you.

Mm-hm. Good 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 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. The impact is real and the need is urgent. Thank you. Thank you.

Thank you.

Thank you, and congratulations. Good luck.

Thank you.

Thank you.

Thank you for coming. Thank you.

Thank you.

Thank you. Nice to see you again. All righty, 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 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 5 on Corrections and Public Safety, Judiciary, Labor and Transportation is now adjourned. Thank you.