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Policy

Creating opportunity at a systems level

REDF informs and influences federal, state, and local policymakers to promote the growth of employment social enterprise and to increase economic opportunity for enterprise employees.

In partnership with policymakers, we can help individuals overcoming high barriers to employment enter the workforce and contribute their skills and talents to our economy. As the U.S. charts a path toward economic recovery, employers across the country are struggling to fill positions. It would be easy to conclude “anyone who wants a job can find one,” but the truth is that millions of people in America with dreams of a better life remain shut out of opportunity. Both our federal policy recommendations and California policy recommendations highlight how we can support ESEs to help create a more inclusive economy that will deliver benefits to us all.

Employment social enterprises provide transitional, paid employment and wraparound services to help people striving to overcome high employment barriers, often caused or exacerbated by racial discrimination and enduring inequities, stabilize their lives, gain skills and confidence, and succeed. REDF’s 2019 impact report of 134 ESEs across 50 states found that nearly 70% of employees are people of color (42% Black, 26% Latinx) and face the following employment barriers:

79%

Incarceration

54%

Unstable housing or homelessness

41%

Mental illness/substance use disorder

26%

Opportunity Youth

ESEs are a valuable partner in the work to build a more equitable and inclusive economy. A cost-benefit analysis conducted among a sample of ESEs in REDF’s portfolio found that every dollar invested in social enterprise generated $2.23 in benefits to society. Given the evidence base and measurable success of ESEs, all levels of government should do more to help these businesses scale. Since 2016, REDF has developed and advocated for federal, California, and Los Angeles City and County policy measures that support evidence-based ESEs and their employees. Take a look at our legislative and budgetary successes below, along with our public-private partnership case study illustrating the impact of scaling an ESE and providing career pathways for formerly incarcerated ESE employees.

On top of our legislative and budget wins, REDF and our partners continue to meet with Congressional offices and federal agencies and testify before Congress, demonstrating the role ESEs can play in stimulating the national economy, combating multi-generational poverty, and addressing economic, gender, and racial disparities. REDF has extended our capacity by joining with workforce partners to promote ESEs in state and federal policy. REDF founded and manages the Resourcing Employment Social Enterprises Together (RESET) national coalition and California RESET to advocate for capital, resources, and policy change to support these businesses across the U.S. In just two years, RESET has grown to 67 organizations nationwide and advocates for ESE inclusion in economic recovery packages to serve even more people who are especially vulnerable to the economic and health crises, and the racial inequities that so starkly persist.

These wins and organizing – at a critical time for shaping our economic recovery – will have ripple effects for years to come. Language is powerful, and we will continue to encourage our government leaders to ‘come back’ and ‘build back better’ in partnership with ESEs.

National Impact of REDF-Supported Employment Social Enterprises (2019)

10,021

People assisted, trained, and employed

$289M

Revenue earned and reinvested in people and jobs

$68.5M

Income earned by social enterprise employees

Legislative Successes

California Assembly Bill 150 – signed into law July 16, 2021

Committee on Budget – Assemblymember Ting (Chair)

This bill allows a credit under the Personal Income Tax Law and the Corporation Tax Law for each taxable year beginning on or after January 1, 2022, and before January 1, 2027, to a qualified taxpayer that employs an eligible individual during the taxable year, in an amount between $2,500 and $10,000 per eligible individual, not to exceed $30,000 per taxpayer per taxable year, depending on the number of hours worked by the eligible individual, and subject to specified conditions and limitations.

California Assembly Bill 565 – signed into law September 22, 2021

Author: Assemblymember Lackey

Requires Interagency Advisory Committee on Apprenticeship (IACA) to create a subcommittee to address issues related to the participation of homeless and foster youth in apprenticeships and pre-apprenticeships. This bill also makes the director of the State Department of Social Services a member of IACA. The bill additionally authorizes the subject matters of the subcommittee’s study and reporting to be expanded to include issues related to minority populations, at the request of a committee member.

California Assembly Bill 628 – signed into law September 27, 2021

Author: Assemblymember Eduardo Garcia

Governor Newsom signed Assembly Bill 628 into law, which will renew and expand the Breaking Barriers to Employment Initiative and ensure the workforce system is more inclusive and equitable. By expanding the list of partnerships that can receive grant funding, including specifically naming ESEs, and focusing the initiative to address racial, ethnic, and socioeconomic disparities more intentionally in the labor market, this legislation will help remove barriers that currently exclude thousands of Californians from accessing critical workforce development professional resources and career services across the state. This policy win is paired with a budget win of $25 million in funding for the initiative.

California Senate Bill 779 (REDF co-sponsored) – signed into law September 22, 2021

Author: Senator Josh Becker

CA Senate Bill 779 recognized ESEs in California Labor Code. With unanimous and bipartisan support from the State Legislature, Governor Newsom signed Senate Bill 779 into law, naming ESEs and worker cooperatives among the recognized “earn and learn” programs under the Workforce Innovation Opportunity Act. This trailblazing legislation opens State funding opportunities to ESEs statewide.

Infrastructure Investment and Jobs Act (HR 3684) – signed into law September 15, 2021

Sponsor: Representative Peter DeFazio

“This Bipartisan Infrastructure Law will rebuild America’s roads, bridges and rails, expand access to clean drinking water, ensure every American has access to high-speed internet, tackle the climate crisis, advance environmental justice, and invest in communities that have too often been left behind (WH.GOV,2021).” REDF was able to get inclusive language included in the current bill. In a section around workforce diversity, the Secretary of Transportation is to report methods to “address barriers to employment in transportation and transportation infrastructure construction industries for individuals who are former offenders…and individuals that represent populations that are traditionally underrepresented in the workforce.” To diversify the infrastructure workforce, ESEs could be a prime subcontractor on infrastructure projects, and this language encourages the Department of Transportation to lean into their racial equity and workforce goals.

California Assembly Bill 1076 – signed into law October 8, 2019

Author: Assemblymember Phil Ting

Requires the California Department of Justice to automate arrest and conviction relief by dismissing eligible convictions for individuals who have completed their probation and/or county jail sentence, arrests that did not result in a conviction for qualified misdemeanors one year after the arrest, and qualified non-serious, non-violent, non-sex felonies three years after arrest.

California Assembly Concurrent Resolution 50 – signed into law September 9, 2019

Author: Assemblymember David Chiu

Calls upon the state’s workforce system to develop more effective training programs for Limited English Proficient individuals, remove barriers for individuals reentering the workforce, and to create goals and metrics that are directly tied to improving equity and access to workforce development and quality jobs for all Californians.

House Resolution 4174 – signed into law January 14, 2019

Author: Representative Paul Ryan

Establishes an Interagency Council on Evaluation Policy to assist the Office of Management and Budget in supporting government-wide evaluation activities and policies. The bill defines “evaluation” to mean an assessment using systematic data collection and analysis of one or more programs, policies, and organizations intended to assess their effectiveness and efficiency.

California Assembly Bill 2762 – signed into law on September 21, 2018

Author: Assemblymember Wendy Carrillo

Expands contracting preferences to include Social Enterprises and Disabled Veterans Businesses and to increase the preference allowance from 5 percent up to 7 percent.

California Assembly Bill 2138 – signed into law on September 30, 2018

Author: Assemblymember David Chiu

Reduces barriers to occupational licensing for individuals with a prior conviction applying for licensure through the Department of Consumer Affairs.

California Assembly Bill 415 (REDF co-sponsor) – signed into law September 28, 2017

Author: Assemblymember David Chiu

Allows for counties and/or state to contract directly with employment social enterprises, nonprofits, public educational institutions, or designated intermediaries to utilize CalFresh (California’s Supplemental Nutrition Assistance Program) Employment and Training funds to support a robust array of education and training.

California Assembly Bill 864 – signed into law October 11, 2017

Author: Assemblymember Kevin McCarty

Authorizes the Director of the California Conservation Corps, in implementing the California Conservation Corps program, to select an applicant for enrollment in the corps’ program who is on probation, parole, post-release community supervision, or mandatory supervision.

California Assembly Bill 1008 – signed into law October 14, 2017

Author: Assemblymember Kevin McCarty

Extends the Ban the Box law in California to private employers. Ban the Box prohibits employers from asking job applicants about their convictions until the applicant has received a conditional offer.

California Assembly Bill 1111 – signed into law October 15, 2017

Author: Assemblymember Eduardo Garcia

Support partnerships between community-based organizations and workforce development boards to prepare individuals with barriers to employment to successfully enter and complete postsecondary credential attainment programs.

California Senate Bill 1219 (REDF sponsor) – passed out of Legislature August 25, 2016

Author: Senator Loni Hancock

Though vetoed by Governor Jerry Brown due to information technology costs, this bill would have granted an employment social enterprise the preference and status to secure state business and procurement contracts. Additionally, the bill would have established a state-level certification for employment social enterprises that can be recognized by a local jurisdiction or special district for local procurement preferences.

Los Angeles County Local Small Business Enterprise, Disabled Veteran Business Enterprise and Social Enterprise Preference Programs – adopted January 12, 2016

Authors: Supervisors Mark Ridley-Thomas and Chair Hilda Solis

Through the fall of 2015 through its passage in July 2016, REDF advocated and mobilized support for the Los Angeles County Board of Supervisors efforts to amend the Small Business and Locally Owned Business Certification Program to include social enterprises. The new guidelines, issued in October 2016, expand the County’s certification, procurement policies and contract preferences for small business now include provisions for social enterprise businesses.

Budgetary Successes

Clean California Initiative (Investments in ESEs) – included in 2021-22 budget

In the Clean California Initiative, there is a $150 million investment that will primarily flow into ESEs. The Governor called for a $1.5 billion investment to transform public spaces and clean public spaces near highways. This initiative includes the creation of an estimated 15,000 jobs, including for ESE employees – individuals who aspire for a quality job while they are overcoming steep barriers to work including incarceration and homelessness.

Federal Omnibus Appropriations Bill – Fiscal Year 2022 

The final appropriations package included REDF priorities:

  • Reentry Employment Opportunities (REO) — The agreement provides $102,079,000 for the REO program at the Department of Labor. Of this amount, $25,000,000 is set aside for competitive grants to national and regional intermediaries for activities that prepare for employment young adults with criminal legal histories, young adults who have been justice system-involved, or young adults who have dropped out of school or other educational programs, with a priority for projects serving high-crime, high-poverty areas. FY21 level was $100,079,000.
  • Community-Based Violence Intervention and Prevention Initiative (CVIPl) — The agreement provides $50,000,000 for a grant program that supports communities in developing comprehensive, evidence-based violence intervention and prevention programs, including efforts to address gang and gun violence, based on partnerships between community residents, law enforcement, local government agencies, and other community stakeholders. A new program – no funding in FY21.
  • DOL ETA – $9.8 billion for the Employment and Training Administration, an increase of $412 million above the FY 2021 enacted level. Within this amount, the bill includes $2.9 billion for Workforce Innovation and Opportunity Act State Grants, an increase of $34 million above the FY 2021 enacted level.

California Earned Income Tax Credit (CalEITC) Expansion – included in 2019-20 budget

Expanded CalEITC by 1) Increasing the income limit to qualify for the CalEITC to $30,000; 2) Increasing the size of the CalEITC for tax filers with annual earnings toward the higher end of what is needed to qualify for the credit currently; 3) Creating a “young child tax credit” that provides an additional $1,000 to families who qualify for the CalEITC and have at least one child under age 6.

LA:RISE Los Angeles City & County Funding – included in 2019-2020 budget

Beginning in 2016, REDF has advocated for local funding for the LA:RISE program. For the 2016-2017 budget, the Los Angeles City General Fund allocated the program $2 million. In the 2017-2018 budget, Los Angeles City General Fund re-allocated the program $2 million. Additionally, in the 2017-2018 budget, Los Angeles County, through the Los Angeles County Homeless Initiative, allocated LA:RISE $5 million. The 2018-2019 City and County budgets continued to support the program with $2 million and $5 million allocations respectively. For the 2019-2020 budgets, both the City and County increased LA:RISE funding to $3 million and $7 million, respectively, bringing total local funding for LA:RISE to $10 million.

California Earned Income Tax Credit (CalEITC) – included in 2018-19 budget

Expands CalEITC to young adults and seniors, in addition to increasing the income limit to account for the rising state minimum wage.

California Earned Income Tax Credit (CalEITC) – included in 2017-18 budget

Allows previously ineligible self-employed workers to qualify for the CalEITC and raises the credit’s income eligibility limits so that workers higher up the income scale can qualify for it.

Social Innovation Fund Congressional Appropriations Advocacy – included in 2017-18 budget

The Social Innovation Fund was a federal program that empowered organizations to identify and support sustainable solutions that are already making a significant impact in transforming communities. Being a part of the Social Innovation Fund grantee network, REDF advocated for continued program funding with key Congressmembers. Unfortunately, in May 2017, Congress passed the Consolidated Appropriations bill that eliminated appropriation for the Social Innovation Fund for Fiscal Year 2017.

ESEs and worker co-ops are innovative, evidence-based approaches that train employees while they’re earning a paycheck, radically transforming the lives of people who are all too often seen as unemployable. Offering skills training and employment together is one of the best ways to enable successful returns to the workforce and strengthen our economy long-term.

CA State Senator Josh BeckerD-Peninsula

I was excited to visit CRCD and see the incredible work they are doing in our district to make sure that people returning from jail or prison, and those experiencing homelessness, get the support they need to stay free, productive and off the streets. By combining jobs, training, and services, they are helping to ensure that all Angelenos have access to economic opportunity, housing, and safe communities. All of which reduces crime rates and recidivism. Thank you for the work you do.

Representative Karen BassD-CA

AB 2670 will help connect ESEs with the most vulnerable Californians for quality employment through private and public job opportunities. These individuals are ready and prepared to work, but due to their background, are unable to gain stable employment. It’s time we change that.

CA Assemblymember Kevin McCartyD-Sacramento

When I was a public defender, I spent countless hours trying to help our clients get employment. They were doing everything right and yet all they were running into were dead ends. I call this a 'justice transition' to give an opportunity to get people back into our economy, and back on their feet, in a very productive manner.

CA Assemblymember Ash KalraD-San Jose