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April 2022, Volume 28, Number 2

California: Coast, UI

Coast. California’s farm sales are $50 billion a year, almost twice the $27 billion farm sales of number two Iowa. Half of the state’s farm sales are from the eight-county San Joaquin Valley, where Fresno, Kern and Tulare counties collectively account for 45 percent of the state’s farm sales.

The coastal county of Monterey is fourth, with farm sales of $4 billion, followed by Ventura and Santa Barbara counties, each with farm sales of almost $2 billion. In the three coastal counties, the leading individual commodity by farm sales is strawberries.

The three major coastal farming counties have 600,000 acres of irrigated crop land, half in Monterey County, or eight percent of the state’s irrigated crop land. However, these three counties produce $8 billion worth of farm commodities a year, over 15 percent of the state’s farm sales.

About 300,000 acres of Monterey County farm land is irrigated, and most of this irrigated crop land straddles Highway 101 that runs north and south through the center of the county. Monterey County had farm sales of $4 billion in 2020, almost three-fourths from vegetables, making Monterey the US salad bowl. The leading commodity was strawberries worth $920 million, followed by leaf ($710 million) and head ($430 million) lettuce.

Santa Barbara has 120,000 irrigated acres concentrated in the north around Santa Maria and around Lompoc and Solvang. Santa Barbara County had farm sales of $1.8 billion in 2020 (excluding cannabis), led by strawberries worth $725 million, cauliflower worth $110 million, and broccoli worth $105 million.
Ventura county had 100,000 irrigated acres and farm sales were $2 billion in 2020, led by $574 million worth of strawberries, $215 million worth of lemons, and almost $200 million worth of nursery stock.

UI. California employers pay taxes of up to six percent of the first $7,000 of each employee’s earnings in order to provide unemployment insurance benefits to laid off workers. Employers are rated, and individual payroll tax rates of 1.5 to 6.2 percent reflect how many of each employer’s ex-employees are among the 50,000 Californians a week who typically request UI benefits. The maximum employer UI contribution is $434 per employee per year.

When lockdowns were imposed in March-April 2020, up to 500,000 Californians a week applied for benefits. Federal Pandemic Unemployment Assistance provided an additional $600 a week to beneficiaries, so that many low earners received over $1,000 a week in federal and state UI benefits. State UI benefits are a maximum $450 a week, and the average state UI benefit in 2021 was $320 a week.

Especially the federal PUA benefits attracted fraudulent claims. Since self-employed workers could receive UI benefits for income losses that continued over several months, PUA benefit checks could be several thousand dollars. EDD and other state agencies could not easily check on self-employment income, and fraudsters found it easy to get PUA benefits. One estimate is that California paid almost $20 billion in fraudulent PUA benefit claims.

California borrowed almost $20 billion from the federal government to pay state UI benefits in 2020 and 2021, more than all other states combined. California’s unemployment rate rose more than the US rate and remained elevated longer. Governor Newsom wants to use some of the state’s budget surplus to pay down the UI debt, while some legislators want to increase the wages on which UI taxes are paid toward the $56,500 in Washington.

By taxing only the first $7,000 earned by workers, California’s UI system is regressive in the sense that employers of low-wage workers pay proportionately more than employers of high-wage workers. If higher UI taxes reduce wages, low-wage workers are subsidizing high-wage workers who receive UI benefits.

Employers opposed SB 1044, which would allow workers to refuse to work if they believe their workplace is unsafe due to a natural disaster, with employers liable to PAGA suits if they discipline workers who refuse to work. Employers say that existing Cal-OSHA laws and regulations already ensure a safe workplace. PAGA suits are filed by private lawyers who normally keep a third of what they recover on behalf of workers.

AB 857 in 2021 and SB 1102 in 2020 would require employers of H-2A workers to pay for travel time between worker housing and fields under the theory that guest workers have no alternative means of getting to their jobs.

AB 2847 would allocate $6.9 million to create a state Excluded Workers Pilot Program to provide UI benefits of up to $300 a week for 20 weeks to unauthorized workers who were laid off or had their hours reduced. Federal law prevents unauthorized workers from receiving regular UI benefits.

Roberto Perez and Perez Bros Farms in Turlock were charged in February 2022 with failing to hire US workers, underpaying H-2A workers, and providing inadequate housing and transportation for the H-2As. WHD ordered $83,000 in back wages for 92 workers and $37,000 in CMPs.

The US Supreme Court heard arguments March 30, 2022 in a case challenging California’s Private Attorneys General Act (PAGA) law that permits private attorneys to sue employers for violating state labor laws as a violation of the Federal Arbitration Act. Many employers include arbitration clauses in their employment agreements that require aggrieved employees to submit to arbitration rather than sue their employers.

A former employee of Viking River Cruises “agreed to resolve all future employment-related disputes with Viking via bilateral arbitration,” but invoked PAGA to sue for violations of state labor law on behalf of herself and other Viking employees. Viking’s efforts to block the PAGA suit were denied by California courts.

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