MANDATORY SOCIAL SECURITY COVERAGE

RECOMMENDATION:

That the City Council direct the City Manager to express our concern about mandatory Social Security and the burden it will place on general funds of the City.

BACKGROUND:

I have attached an informational sheet from the League of California Cities concerning the federal government's plans to mandate Social Security coverage for state and local government employers. The Social Security system enacted in 1935 first prohibited state and local governments from participating in the program. Most state and local governments set up their own plans to cover workers not participating in Social Security. The Social Security later became a voluntary program with many states and within California many local and special districts participating as a matter of local choice. As you know, Hermosa Beach does not participate in the federal program. The proposal now being considered by the White House is to add all state and local governments and their employees to the program as new people are hired. This approach is better than mandating complete coverage for all employees now which would be very costly. I have attached a chart that shows the cost if the proposal being advanced now is actually passed by Congress.

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