SACRAMENTO /California Newswire/ — Emphasizing that this year’s number one priority is creating jobs and returning people to work to get California’s economy back on track, Governor Arnold Schwarzenegger today visited Ace Clearwater Enterprises in Torrance to highlight his California Jobs Initiative proposal, which includes a $500 million employer hiring incentive that will keep Californians in jobs and give employers increased flexibility to adapt to the changed economy. Equivalent to the state paying half the payroll tax for each new employee for a year, the Governor’s initiative will result in up to 100,000 new or retained jobs created and provide training to 140,000 individuals to qualify them for better jobs.
“My number one priority for California this year is job creation. For our state to fully recover we must foster an economy that keeps Californians employed and provides flexibility to employers adapting to a new economic climate. This initiative does just that by reimbursing employers for the costs of hiring and training employees who were previously unemployed, underemployed or facing potential layoffs,” said Governor Schwarzenegger. “This action will create or retain 100,000 jobs and train 140,000 individuals for gainful employment, making it easier for California businesses to thrive and expand, and help get our state’s economy back on track.”
As first mentioned in the Governor’s State of the State address last week, this initiative includes a $200 million hiring incentive for employers to pay for training new employees or retraining an existing employee for a new job. Employers will be reimbursed for training expenditures through the Employment Training Panel (ETP) after the person has been gainfully employed for three months. The average reimbursement for each employee is approximately $1,400.
An additional incentive of $300 million in reimbursement funds will be available to employers for training and employing out-of-work Californians. Employers will receive $3,000 for each unemployed worker who completes ETP training and stays on the job for nine months. Together, this funding for training and new hire grants is equivalent to the state paying half the payroll tax for each new employee for a year.
To accomplish this goal, ETP will partner with community colleges and other workforce development organizations to deliver training focused on green jobs and other key industries prioritized by ETP. These include manufacturing, goods movement, biotechnology, information technology services, multimedia, health care and construction.
The employer hiring incentive will be funded by a loan from the Unemployment Compensation Disability Fund, which currently has a surplus sufficient to fund this program after covering claims and will not include General Fund allocations. This allows a fund paid into by workers to have a direct benefit for workers. Employers will be reimbursed after ETP has confirmed nine months of continuous employment for each new employee.
The California Jobs Initiative is a five-step plan to create jobs and foster a more business-friendly economy. In addition to the employer hiring incentive, the Governor proposes to streamline regulations to get shovels in the ground and projects moving to create jobs; extend and expand the $10,000 homebuyer tax credit to include the purchase of new or existing homes; eliminate sales taxes on green tech manufacturing equipment; and reform the legal climate for California businesses by proposing a series of changes to regulations governing class action lawsuits, product liability suits and seek to cap punitive damage awards to eliminate frivolous lawsuits and create an atmosphere where businesses can thrive.