Proposition 194
Prison Inmates Unemployment Insurance
- Provides that prisoner's employment in a joint venture program while in prison does not entitle the prisoner to unemployment benefits upon release from prison.
The information below was provided by the California Journal.
Background: The California Department of Corrections was
given authority to contract with private businesses to hire prison labor under
Proposition 139, approved by voters in November 1990. Prior to creation of this
Joint Venture Program (JVP), such hiring was prohibited, and goods and services
produced by inmates could be sold only to state or local governments. Organized
labor historically has opposed the use of prison labor because of the potential
for depressing wages and job opportunities for the rest of the work force. Up
to 80 percent of inmate earnings under the JVP are subject to federal, state
and local income tax withholding, restitution payments to crime victims,
support payments to the inmate's family, and reimbursement to the state for
incarceration costs. At least 20 percent is set aside for the inmate to receive
upon his or her release from prison. Employers generally are required to pay
all taxes they would otherwise pay for non-JVP employees, including
unemployment insurance. Inmates employed by JVP employers are eligible under
current law to receive unemployment benefits when they are released from
prison, under the same law that applies to all employees in the state who lose
a job through no fault of their own. Employer contributions fund the state's
unemployment insurance program, with businesses whose former employees receive
benefits more frequently paying higher rates than businesses whose former
employees generate fewer payouts from the system. About 700 inmates have been
employed under the Joint Venture Program since its inception.
Proposal: Proposition 194 eliminates the requirement that
inmates who are employed by private businesses under the Joint Venture Program
receive unemployment insurance benefits after their release from prison. In
addition, employers would no longer be required to pay unemployment insurance
taxes for prisoners they hire under this program.
Arguments for: Proponents -- including Senate Minority
Leader Rob Hurtt, former Assemblyman Tom McClintock and the California
Correctional Peace Officers Association -- say that payment of unemployment
insurance benefits is a disincentive for businesses to hire prisoners under the
Joint Venture Program. A JVP employer, who has no control over an inmate's
release from prison, pays higher unemployment insurance premiums as a result of
former inmate-employees receiving unemployment benefits. Eliminating this
disincentive will increase the number of businesses participating in the JVP,
creating more job training and earning opportunities for prisoners. Increasing
the number of these jobs also will generate more revenues for victim
restitution and reimbursement to the state for incarceration costs since these
are two of the areas for which inmate earnings must be earmarked. Supporters of
the proposition also argue that unemployment insurance was never intended for
prisoners who were not laid off, but simply paroled out of their jobs.
Arguments against: Opponents -- specifically, the Friends
Committee on Legislation --argue that the Legislature in 1977 approved payment
of unemployment benefits to released prisoners based on the notion that the
inmate's lack of skills, high unemployment rates and discrimination make it
difficult to find work immediately upon release. Without the minimal financial
assistance provided by unemployment benefits, an ex-offender is more likely to
return to crime. Opponents state that JVP employers make little or no effort to
retain inmates as employees after their release from prison, often because the
business is not located in the county to which JVP employees are paroled. A
concern also has been raised that denying unemployment benefits to former
inmates may conflict with the Federal Unemployment Tax Act. If the federal
government determines that this proposition puts the state out of conformity
with the federal law, all businesses in the state that currently claim a
federal tax credit on their unemployment insurance premiums would lose that
credit, which could amount to a $1.7 billion loss for California employers.
For additional information please see:
- Intitiative targets parolees' jobless benefits -- The Vacaville Reporter (February 20, 1996)
- Yes on 194
None submitted.
- No on 194
None submitted.
