BILL ANALYSIS                                                                                                                                                                                                    

           AB 423
                                                                  Page  1

          AB 423 (Hertzberg)
          As Amended July 18, 2001
          Majority vote
          |ASSEMBLY:  |49-24|(June 6, 2001)  |SENATE: |25-7 |(July 19,      |
          |           |     |                |        |     |2001)          |
           Original Committee Reference:    L. & E.  

           SUMMARY  :  Establishes a system for the verification of farm labor  
          contractor (FLC) licenses including a Verification Unit at the  
          Department of Industrial Relations (DIR).  Specifies the duties of  
          growers and FLCs to obtain copies of licenses, and to use the  
          verification system to determine if they are valid.  Revises  
          criminal penalties (fines) for specified wage violations, and  
          establishes a program of state and local enforcement units to  
          prosecute such cases.

           The Senate amendments  : 

          1)Delay until January 1, 2003, the effective date of the provision  
            that a grower, FLC, or other person, who knowingly and willfully  
            fails to pay wages, as specified, is guilty of a misdemeanor.   
            Delete from the elements of the crime the requirement that such  
            party acted with "intent to defraud."

          2)Delete the provisions of this bill requiring mandatory  
            imprisonment in jail upon a third conviction and other  
            provisions modifying existing law with respect to imprisonment  
            in jail.

          3)Increase, effective January 1, 2003, the fines upon conviction.   
            The minimum fine upon a second conviction is increased from  
            $5,000 to $10,000.  The minimum fine upon a third conviction is  
            increased from $10,000 to $25,000. 

          4)Limit the support of a local FLC enforcement unit (Local Unit)  
            by the state FLC Enforcement Unit (State Unit) to technical  
            rather than financial aid and delete the allocation of fine  
            revenues to the State Unit.  Require the Local Unit to  
            coordinate, whenever possible, with the Rural Crime Prevention  
            Program in its jurisdiction.


          AB 423
                                                                  Page  2

          5)Provide that a portion of the annual FLC license fee shall be  
            allocated to the FLC verification unit as well as the State  

          6)Provide that this bill will become operative only if SB 1125  
            (Burton), pending the Governor's signature, is enacted and  
            becomes effective on or before January 1, 2002.   

           AS PASSED BY THE ASSEMBLY  , this bill: 

          1)Established an affirmative obligation of a grower, as defined,  
            to inspect, copy, and verify the license of a person contracted  
            as a FLC.  Established the duty and a procedure for a grower to  
            verify a FLC license by contacting within specified timelines a  
            license verification unit to be established by the Labor  
            Commissioner (LC).  Established a similar duty for a FLC to  
            inspect the license of persons, as specified, contracted by a  

          2)Required the LC to establish and maintain a Farm Labor  
            Contractor License Verification Unit (Verification Unit), no  
            later than July 1, 2002, to certify, upon the request of a  
            grower or FLC, the status of a state license issued to a FLC,  
            and to provide a unique verification number to the requestor.   
            The obligation to verify licenses and related penalties do not  
            apply until three months after the verification unit becomes  
            operational as certified by the State Auditor, and may be  
            suspended if the system becomes inoperable.

          1)Required a FLC whose license is not renewed to notify a grower  
            within three days and provided that it is a misdemeanor for a  
            person whose license was suspended or revoked to act as a FLC.  

          1)Specified the duties of a FLC to ensure that every person who is  
            performing farm labor contracting activities on behalf of a FLC  
            has obtained a license.  Provided that a FLC is responsible for  
            specified labor law violations committed by his or her employee.  

          1)Provided that any grower, FLC, or other person as specified who  
            knowingly, willfully, and with intent to defraud fails to pay,  
            or causes the failure to pay, wages, as specified, is guilty of  
            a misdemeanor.  Provided for imprisonment in a county jail and  
            fines, or both, upon conviction.   Provided for mandatory  


           AB 423
                                                                  Page  3

            imprisonment in a county jail for not less than 30 days and a  
            fine of not less than $10,000, or both, upon a third conviction,  
            as specified.   Provided also for other sanctions under  
            specified statutes, and required the LC to revoke the  
            defendant's license for specified period upon conviction.   
            Provided that a person may not be prosecuted under any other law  
            if the prosecution would be based upon the same set of acts if a  
            person is prosecuted under these provisions.

          1)Provided that upon final determination of the LC that a grower,  
            FLC, or person acting in the capacity of a FLC has failed to pay  
            wages to its employees, the grower, FLC or such person shall  
            immediately pay those wages.  If payment is not made within 30  
            days of the final determination, the LC shall notify the local  
            district attorney. 

          1)Required the Director of DIR to establish a State Unit to  
            develop a program of financial land technical assistance to a  
            district attorney's office that establishes a local FLC  
            enforcement unit (local unit).  Provided that a local unit shall  
            concentrate enhanced prosecution efforts on the prosecution of  
            FLCs who violate a state law regulating wages.  Allocated the  
            fines collected pursuant to these provisions to DIR for support  
            of the state unit.  

           FISCAL EFFECT  :  According to the Senate Appropriations Committee  
          analysis, as amended in the Senate, additional costs resulting  
          from this bill will be offset by fee revenue. 

           COMMENTS  :  This bill, sponsored by the United Farm Workers of  
          America, AFL-CIO, focuses on the problem of wage payment  
          violations by FLCs.  The text of this bill, as introduced, was  
          contained in AB 2862 (Romero) of 2000, which was vetoed.  The  
          Governor's veto message indicated that he would sign legislation  
          that incorporates all of the provisions in the bill, but with  
          stiff civil penalties in place of criminal sanctions for employers  
          who knowingly violate the law.  The amended bill deletes the  
          provision for mandatory jail time sentence upon a third conviction  
          and other provisions increasing jail time upon conviction.   
          Instead, it increases the fines upon conviction under this bill.  

           Analysis Prepared by  :  Ralph Lightstone / L. & E. / (916) 319-2091  
                                                                 FN: 0002142