SB1054 - Unemployment insurance: reporting requirements.

Amended IN Assembly June 18, 2026 Amended IN Assembly June 08, 2026 Amended IN Senate March 26, 2026 Amended IN Senate March 16, 2026 CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION Senate Bill No. 1054 Introduced by Senator Cabaldon (Coauthors: Senators Ashby, Caballero, Cortese, Durazo, Laird, Menjivar, and Wiener) February 12, 2026 An act to amend Section 1095 of, and to add Section 1088.3 to, the Unemployment Insurance Code, relating to unemployment insurance. LEGISLATIVE COUNSEL'S DIGEST SB 1054, as amended, Cabaldon. Unemployment insurance: reporting requirements. Existing law provides for unemployment compensation benefits for eligible individuals in the state who are unemployed through no fault of their own. Existing law requires an employer, as defined, to make contributions for unemployment insurance premiums and to file specified reports with the Director of Employment Development, including, among other reports, a report of contributions, a quarterly return, and a report of wages paid, as specified. This bill would require the Employment Development Department to work with employers to enhance the reporting of employment and earning data, as specified, and, where feasible, to align and streamline definitions and requirements for the report of wages, deploy user-friendly application programming interfaces, and implement other means to simplify reporting processes. The bill would require, beginning July 1, 2027, every employer with 10 or more employees and every individual or organization that, as an agent, reports wages on behalf of one or more employers with 10 or more employees, as specified, to include in the report of wages, information on total monthly wage, industry, occupation, worker type, and hours worked for each employee, as provided. This bill would require the department, on or before July 1, 2027, to adopt and develop appropriate procedures for the sharing of hours worked and other necessary employment data to support employment-related verifications for initial eligibility for, and ongoing receipt of, public benefits, and to enable access to relevant wage data, as specified. The bill would require the department to work with the California Statewide Automated Welfare System (CalSAWS) to develop and implement the necessary system changes to implement the data sharing process to verify hours worked for those public benefits. The bill would also require or authorize the department to work with other specified state agencies relating to reporting requirements on workforce and employment. This bill would require the department to use existing federal and state grant funds to the extent available and to implement the bill’s provisions on or before July 1, 2027, except that, the bill would require the department to begin the data sharing process to verify hours worked for the public benefits, as described above, on January 1, 2028, or when the department notifies the Legislature that CalSAWS can perform the necessary automation to implement the data sharing process, whichever is later. 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 their duties and is not open to the public. However, existing law requires the director to permit the use of the information for specified purposes, including to enable governmental agencies to verify or determine eligibility for public social services. Existing law provides that a person who knowingly accesses, uses, or discloses this confidential information without authorization is guilty of a misdemeanor. This bill would also require the director, on or before January 1, 2028, to enable the State Department of Social Services and the State Department of Health Care Services to access hours worked and other necessary employment data to support employment-related verifications for initial eligibility for, and ongoing receipt of, public benefits, as prescribed. The bill would further require the director, on or before January 1, 2028, to enable the Office of the California Education Interagency Council to access any relevant wage data necessary for the purposes of supporting the council’s agendas, reports, work products, and resources. council’s specified purposes. By expanding the scope of a crime, this bill would impose a state-mandated local program. Existing constitutional provisions require that a statute that limits the right of access to the meetings of public bodies or the writings of public officials and agencies be adopted with findings demonstrating the interest protected by the limitation and the need for protecting that interest. This bill would make legislative findings to that effect. 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. Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: YES Bill Text The people of the State of California do enact as follows: SECTION 1. (a) This act shall be known, and may be cited, as the Better Data, Better Coverage, Better California Act. (b) The Legislature finds and declares all of the following: (1) California’s economy depends on a skilled workforce. High-quality labor market information enables policymakers, state agencies, educational institutions, workforce boards, and employers to understand which Californians access training, what outcomes they achieve, where labor shortages persist, and where there are gaps in workforce training opportunities. (2) California’s ability to conduct meaningful workforce analysis is severely limited because the state’s base wage file does not include hours worked or occupational classification. These core data elements are required to assess job quality, evaluate the effectiveness of training programs, verify federal benefit eligibility, and track whether students are able to be employed in their field of study and whether workers enter and remain in priority sectors. (3) A 2025 report by the Strada Education Foundation found that states lacking high-quality labor market data are unable to assess whether workforce programs lead to economic mobility or respond effectively to labor market demand. Adding hours worked and occupational classification to state wage records is foundational to understanding job quality, identifying whether workers advance into higher wage occupations, and evaluating the return on public investments in education and training. (4) California has invested heavily in job training programs, but lacks the data system to evaluate their impact. A 2024 publication by California Competes: Higher Education for a Strong Economy found that the state administers at least 36 major workforce and career pathway programs across 12 public entities, totaling billions of dollars in investment. Currently, the state cannot track whether participants ultimately secure employment in their field of training or region. (5) A 2024 report by the Labor and Workforce Development Agency and the Employment Development Department found that hours worked is an important missing data element for improving the accuracy and usefulness of California’s wage file and related program evaluations, and further found that adding occupational code information would significantly enhance the state’s capacity to analyze regional labor market trends, evaluate training program effectiveness, and understand workforce shortages. (6) A report released in 2025 by the California Cradle-to-Career Data System’s Workforce Data Expansion Task Force concluded that collecting hours worked and occupational classification is essential for strengthening the state’s longitudinal data system, evaluating whether education and workforce investments lead to improved employment outcomes, and supporting the California Education Interagency Council’s responsibility to identify labor gaps and emerging workforce needs by providing available data. (7) The 2025 Master Plan for Career Education calls for improved data to align education and training with labor market demand and to understand whether learners transition into good jobs. (8) The California Legislature, through Senate Bill 638 (Chapter 457 of the Statutes of 2025) and Assembly Bill 1098 (Chapter 446 of the Statutes of 2025), established the California Education Interagency Council and charged it with conducting statewide analyses of labor shortages, assessing whether education and workforce programs align with regional and sectoral needs, and recommending improvements to the state’s talent pipeline. Collecting standardized hours worked and occupational classification data will strengthen the council’s ability to evaluate whether Californians are entering high-demand fields and to make evidence-based recommendations to the Legislature. (9) The need for data has become more urgent in light of the federal enactment of federal House Resolution 1 (Public Law 119-21) in 2025, which imposes new work requirements for health and food benefits and new costs to the state. For example, federal House Resolution 1 does all of the following: (A) Establishes new Medicaid eligibility requirements by mandating that able-bodied adults 19 to 64 years of age, inclusive, complete 80 hours of work, education, community service, or other qualified activities each month. (B) Imposes stricter Supplemental Nutrition Assistance Program (SNAP) participation rules by capping benefits at three months in a three-year period for individuals who do not meet 20 weekly hours of qualifying activities, and expands work requirements to previously exempt groups including former foster youth, veterans, individuals experiencing homelessness, adults 55 to 64 years of age, inclusive, without disabilities, and caregivers of children 14 years of age and older. (C) Shifts a portion of SNAP program costs to states based on their SNAP payment error rate. Given California’s 2024 payment error rate of 10.8 percent, federal House Resolution 1 could require the state to assume a new cost share of up to 15 percent. (D) Imposes more stringent repayment standards for Medicaid errors related to eligibility, which could incur additional costs on the state for failure to appropriately document eligibility verification. (10) Without standardized hours worked data collected and shared by employers to the state, California agencies, counties, and individuals will face a significant administrative burden verifying compliance, increasing the likelihood that eligible Californians lose health and food benefit coverage. (11) Sharing accurate and timely work and earnings data is essential to reduce administrative burden, improve eligibility determinations, lower error rates, and shield the state from increased fiscal responsibility. (12) Collecting hours worked and occupational code information will benefit learners seeking upward mobility, employers struggling to fill critical labor shortages, state agencies administering major public benefit and workforce programs, educational institutions evaluating curricular offerings, and policymakers responsible for ensuring that public investments improve economic mobility and meet California’s regional workforce needs. (13) Federal regulations allow the Employment Development Department to collect hours worked and occupation data. While California studied how to expand this data collection through implementation of Senate Bill 755 (Chapter 815 of the Statutes of 2022), it has not yet required it, stating the need for legislation and an appropriation. (c) Therefore, it is the intent of the Legislature to require the Employment Development Department to collect hours worked and occupational classification as part of employer wage reporting, in a manner that minimizes employer burden, improves data quality, and maximizes cross-program value for California’s education, workforce, and safety net systems. SEC. 2. Section 1088.3 is added to the Unemployment Insurance Code, to read: 1088.3. (a) For purposes of this section, the following definitions apply: (1) “Hours worked” means the total hours worked by each worker each month. The employer may report 40 hours worked for each week any duties were performed by a full-time employee and shall report hours paid or a reasonable estimate of the hours worked for each week duties were performed by a part-time employee. (2) “Occupation” means an occupation listed in the United States Bureau of Labor Statistics’ Standard Occupational Classification system or the job title of each worker. (3) “Worker type” means the salaried or hourly, and full-time, part-time, intern, or apprentice, status of each worker. (b) The department shall work with employers to enhance the reporting of employment and earning data by employers as required by this article, consistent with federal law and regulations. To minimize employer reporting burdens, the department, where feasible, shall align and streamline definitions and requirements for the report of wages, deploy user-friendly application programming interfaces, and implement other means to simplify reporting processes. (c) (1) Beginning July 1, 2027, every employer with 10 or more employees and every individual or organization that, as an agent, reports wages on behalf of one or more employers with 10 or more employees, shall include in the report of wages required by Section 1088, information on total monthly wage, industry, occupation, worker type, and hours worked for each employee in a format approved by the department. (2) The information required to be reported pursuant to paragraph (1) shall be filed electronically at least monthly, consistent with paragraph (1) of subdivision (e) of Section 1088, unless the employer receives a waiver pursuant to paragraph (2) of subdivision (e) of Section 1088. (d) On or before July 1, 2027, the department shall adopt and develop appropriate procedures for the sharing of hours worked and other necessary employment data pursuant to subdivisions (as) and (at) of Section 1095. (e) The department shall work with CalSAWS to develop and implement the necessary system changes to implement the data sharing process pursuant to subdivisions (as) and (at) of Section 1095 to verify hours worked as described in subdivision (d). (f) The department shall work with the Office of the California Education Interagency Council related to the collection of employment data pursuant to subdivisions (as) and subdivision (at) of Section 1095 for the purposes of supporting the council’s agendas, reports, work products, and resources. council’s purposes specified in Chapter 12.5 (commencing with Section 11900) of Part 1 of Division 3 of Title 2 of the Government Code. The [Text truncated for display. Full text available on Congress.gov.]