Bill Text: CA AB2358 | 2023-2024 | Regular Session | Amended

California Assembly Bill 2358

Bill Title: Employment Development Department: disclosure of wage information: qualified third-party vendors.

Spectrum: Partisan Bill (Democrat 1-0)

Status: (Introduced) 2024-05-16 - In committee: Held under submission. [AB2358 Detail]

Download: California-2023-AB2358-Amended.html

Amended IN Assembly March 21, 2024

CALIFORNIA LEGISLATURE— 2023–2024 REGULAR SESSION

Assembly Bill

No. 2358

Introduced by Assembly Member Low

February 12, 2024

An act to ~~amend Section 14000 of the Unemployment Insurance Code, relating to workforce development.~~ add Section 1094.1 to the Unemployment Insurance Code, relating to privacy.

LEGISLATIVE COUNSEL'S DIGEST

AB 2358, as amended, Low. ~~Workforce development: findings and declarations.~~ Employment Development Department: disclosure of wage information: qualified third-party vendors.

Under existing law, the information obtained in the administration of the Unemployment Insurance Code is for the exclusive use and information of the Director of Employment Development in the discharge of the director’s duties and is not open to the public. Existing law permits the use of the information for specified purposes, including enabling the California Workforce Development Board and other entities to access any relevant quarterly wage data necessary for the evaluation and reporting of specified workforce program performance outcomes. Existing law makes it a crime for any person to knowingly access, use, or disclose this confidential information without authorization.
This bill would require the Employment Development Department to release an employee’s wage information to a qualified third-party vendor if the employee has provided the department written permission for that release. The bill would require the department to allow, at the request of the employee, the electronic transmission of the employee’s wage information directly to or through a qualified third-party vendor for permissible uses, as defined. The bill would require the department to enter into an agreement with a qualified third-party vendor to allow for electronic transmission of an employee’s wage information for permissible uses. The bill would require a qualified third-party vendor to use the employee’s wage information for a permissible use and to share the employee’s wage information with a subscriber, subject to specified restrictions the bill would impose on the subscriber. The bill would provide that wage information is confidential, as specified. The bill would prohibit the department from expending any additional state funds to execute the terms of the agreement with a qualified third-party vendor. The bill would make any person who knowingly accesses, uses, or discloses any information made confidential by the bill’s provisions without authorization, as provided, guilty of a misdemeanor. By creating a new crime, the bill would impose a state-mandated local program. The bill would define various terms for purposes of these provisions.
The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.
This bill would provide that no reimbursement is required by this act for a specified reason.
~~Existing law declares the need to have a well-educated and highly skilled workforce. Existing law also declares specified principles to guide the state’s workforce investment system.~~
~~This bill would make a nonsubstantive change to those provisions.~~

Vote: MAJORITY Appropriation: NO Fiscal Committee: NOYES Local Program: NOYES

The people of the State of California do enact as follows:

SECTION 1.

Section 1094.1 is added to the Unemployment Insurance Code, to read:

1094.1.
(a) For purposes of this section, the following definitions apply:
(1) “Permissible use” means verifying an employee’s wages or employer or using the employee’s wage information for credit granting and related account maintenance, residential leasing, employment screening, or insurance or government transactions, consistent with the purposes set forth in the federal Fair Credit Reporting Act (15 U.S.C. Sec. 1681 et seq.).
(2) “Qualified third-party vendor” means a consumer reporting agency engaged in the business of furnishing consumer reports and who meets all of the following criteria:
(A) Has executed contracts for the same service in place with at least three other states.
(B) Has completed systems integration for an identical service in one or more states.
(C) Has had its business model and data sharing agreements and other collateral materials reviewed for conformance, either formally or informally, by the United States Department of Labor and found to be in conformity with relevant federal rules and regulations.
(3) “Subscriber” means a person or entity that pays a fee to a qualified third-party vendor to obtain consumer reports or other information from the qualified third-party vendor.
(4) “Wage information” means the employee’s full name, social security number, the employer’s name, and the total amount of wages paid to that employee each quarter, as reported to the department by the employer in its quarterly contribution return and report of wages.
(b) The department shall release an employee’s wage information to a qualified third-party vendor if the employee has provided the department written permission for that release.
(c) The department shall provide the employee’s wage information to the employee or their representative without charge.
(d) The department shall allow, at the request of the employee, the electronic transmission of the employee’s wage information, directly to or through a qualified third-party vendor, for permissible uses.
(e) The department shall enter into an agreement with a qualified third-party vendor to allow for electronic transmission of an employee’s wage information for permissible uses.
(f) The qualified third-party vendor shall use the employee’s wage information received from the department pursuant to this section for a permissible use and may share the employee’s wage information with a subscriber subject to subdivision (g).
(g) (1) A subscriber shall not request or receive wage information from a qualified third-party vendor pursuant to subdivision (f) unless the request is for a permissible use, and shall not use that wage information unless the use is a permissible use.
(2) A subscriber shall only receive wage information about an employee from a qualified third-party vendor pursuant to subdivision (f) if the employee has provided written permission that authorizes the release of that employee’s wage information to a subscriber.
(3) A subscriber shall not resell or redisclose wage information received from a qualified third-party vendor.
(h) All wage information reported to the department and provided to a qualified third-party vendor pursuant to this section shall be confidential and shall remain subject to the confidentiality provisions contained in applicable federal and state laws.
(i) The qualified third-party vendor shall require a person who receives wage information to keep that information confidential and to use the information only for the designated permissible use.
(j) The department shall not expend any additional state funds to execute the terms of the agreement with the qualified third-party vendor.
(k) Any person who knowingly accesses, uses, or discloses any information made confidential pursuant to this section without authorization pursuant to this section is in violation of this section and is guilty of a misdemeanor.

SEC. 2.
No reimbursement is required by this act pursuant to Section 6 of Article XIII B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII B of the California Constitution.

SECTION 1.Section 14000 of the Unemployment Insurance Code is amended to read:
14000.
~~(a)The Legislature finds and declares that, in order for California to remain prosperous and globally competitive, the state needs to have a well-educated and highly skilled workforce.~~
~~(b)The Legislature finds and declares that the following principles shall guide the state’s workforce investment system:~~
~~(1)Workforce investment programs and services shall be responsive to the needs of employers, workers, and students by accomplishing the following:~~
~~(A)Preparing California’s students and workers with the skills necessary to successfully compete in the global economy.~~
(B)Producing greater numbers of individuals who obtain industry-recognized certificates and career-oriented degrees in competitive and emerging industry sectors and filling critical labor market skills gaps.
~~(C)Adapting to rapidly changing local and regional labor markets as specific workforce skill requirements change over time.~~
~~(D)Preparing workers for good-paying jobs that foster economic security and upward mobility.~~
~~(E)Aligning employment programs, resources, and planning efforts regionally around industry sectors that drive regional employment to connect services and training directly to jobs.~~
(2)State and local workforce development boards are encouraged to collaborate with other public and private institutions, including businesses, unions, nonprofit organizations, kindergarten and grades 1 to 12, inclusive, career technical education programs, adult career technical education and basic skills programs, apprenticeships, community college career technical education and basic skills programs, entrepreneurship training programs, where appropriate, the California Community Colleges Economic and Workforce Development Program, the Employment Training Panel, and county-based social and employment services, to better align resources across workforce, training, education, and social service delivery systems and build a well-articulated workforce investment system by accomplishing the following:
(A)Adopting local and regional training and education strategies which include workplace-based earn and learn programs that build on the strengths and fill the gaps in the education and workforce development pipeline in order to address the needs of job seekers, workers, and employers within regional labor markets by supporting sector strategies.
~~(B)Leveraging resources across education and workforce training delivery systems to build career pathways and fill critical skills gaps.~~
~~(3)Workforce investment programs and services shall be data driven and evidence based when setting priorities, investing resources, and adopting practices.~~
~~(4)Workforce investment programs and services shall develop strong partnerships with the private sector, ensuring industry involvement in needs assessment, planning, and program evaluation.~~
(A)Workforce investment programs and services shall encourage industry involvement by developing strong partnerships with an industry’s employers and the unions that represent the industry’s workers.
(B)Workforce investment programs and services may consider the needs of employers and businesses of all sizes, including large, medium, small, and microenterprises, when setting priorities, investing resources, and adopting practices.
(5)Workforce investment programs and services shall be outcome oriented and accountable, measuring results for program participants, including, but not limited to, outcomes related to program completion, employment, and earnings.
(6)Programs and services shall be accessible to employers, the self-employed, workers, and students who may benefit from their operation, including individuals with employment barriers, such as persons with economic, physical, or other barriers to employment.