LOMPOC, Calif. – It isn't easy being a credit union human resource professional in California. In fact, the key to surviving seems to be found in the expression, "keep rolling with the punches." "The one thing you can depend on California for is to keep credit union HR professionals busy," said Vandenberg Federal Credit Union HR Vice President/HRD Network President Diane Lawrence. According to Lawrence, as a "pro-employee state" just staying on top of the many legislative measures recently passed is challenging enough – not to mention the implications of the recall election. For example, California legislators approved and Governor Davis signed an employer-paid health care mandate coined "play or pay", which will amount to what Lawrence has dubbed "a multibillion-dollar tax increase on California employers". It requires employers with at least 20 employees to either cover at least 80% of their employees' health insurance costs or pay a fee to a state fund that would obtain the coverage. Businesses with at least 200 employees would also have to cover an employee's dependents. The mandates will start 1/1/05 for the businesses with at least 200 employees and 1/1/06 for employees with 20 to 199 employees. Two years ago the state legislature also increased unemployment insurance (UI) benefit levels. In 2002, the average employer cost per worker was $175. In 2003, it increased to $210 due to a maximum weekly benefit increase from $330 to $370. In 2004, it is predicted that the average cost will increase to $346. To date California has the largest UI system in the nation as well as the easiest access to benefits, covers more workers, pays more claims and pays more weeks of benefits. Unfortunately, says Lawrence, streamlining reforms have not been enacted and have resulted in this year's trust fund balance to decrease from $6 billion in 2001 to less than $1 billion. "When the benefit increases are combined with the continuing recession and longer periods of joblessness of UI recipients, it's not surprising that in 2004 employers here will have more than a $2 billion tax hike to cover the UI trust fund insolvency," said Lawrence. "What this means to employers is that in 2004 we may expect to pay 75% more for UI taxes." According to Lawrence the reason is three-fold. First, the maximum weekly benefit increases to $410. Second, the taxable wage base may increase from $7,000 to $15,000 per year per employee. Third, employers will be required to pay an additional 15% emergency solvency surcharge for the first time. If that weren't enough employers here pay soaring premiums for workers compensation. The average premium rate for the first quarter of 2003 increased to $5.85 per $100 of payroll. In 2002, the rate was $5.23 per $100 of payroll. "Even legislature's implementation of a reform package won't curb employers desire for a substantive package of reforms in order to produce cost savings," said Lawrence. Lawrence says not all legislation is bad for the employer. The state's judicial system has recently adopted a one-day or one-trial jury system. Whether or not an employee is selected to serve on the jury that date, the employee is considered to have satisfied his/her jury obligation for at least one year. In some courthouses, employees may telephone or visit a Web site to determine if they must report to the courthouse. "The benefit of these changes is that they greatly reduce the employers' uncertainty about when and for how long employees will be unavailable," said Lawrence. "Consequently, it will help us plan and reassign tasks for a short period of time and minimize the economic and operational impact of employee absences." The actual impact of a landmark paid family leave law enacted in 2002 remains to be seen. The law requires paid time off benefits for employees to care for seriously ill family members. Initially planned to be funded through employer taxes, opposition by employers and associations here led to funding only by employees and a reduction in the duration of the required time off. Employee taxation begins Jan. 1, 2004, and the partial wage replacement benefits from the program become available July 1, 2004. "Although the Employment Development Department concluded that the new requirements will have no economic impact on employers, there is continuing concern due to the potential conflicts between existing programs and the new program claims handling," said Lawrence. "Time will tell." [email protected]