| Legislative Counsel's Digest: Existing law requires employers in California to contribute to the Unemployment Fund, and other funds, by paying a tax based on wages paid to their employees. The proceeds from these compulsory contributions are used to provide unemployment insurance benefits for unemployed persons, as provided. |
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| This bill would create a program that would require temporary employment agencies to contribute to the Temporary Employment Fund, which this bill would create, by paying a tax imposed on those temporary employment agencies at a rate of 5% of the gross wages paid to temporary employees. |
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| This bill would designate the Director of Employment Development as the person responsible for the administration of the program, and would require that the time, procedure, manner of payment, and collection of contributions under the program be in accordance with similar provisions relating to unemployment compensation. This bill would also continuously appropriate moneys from the Temporary Employment Fund for allocation among the counties and cities, and would require that counties and cities expend those revenues exclusively for programs, relating to specified matters, that the counties and cities are required to provide by state law. |
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| California NACCB Position Statement |
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| NACCB believes that AB-880 will increase costs for businesses that employ computer professionals through consulting (i.e. temporary) agencies, since the proposed 5% payroll tax cost will be passed through to clients companies of the companies of the computer professional consulting agencies. (The computer professional consulting industry operates on net profits in the three to six percent range.) |
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| This also means that an unintended consequence of AB-880 will be the loss of computer consulting jobs. Computer professionals compete in a global marketplace. The work they do can be done offshore as well as in other states. The increased costs of AB-880 will result in our clients sending work out of state and overseas. |
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| Both the Federal government and the State of California have recognized the global competition impact of increasing the cost of high tech consulting by carving out exemptions from overtime requirements for "computer professionals" in existing law. Please don't let California lose more jobs for temporary computer professionals. |
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