BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Tom Torlakson, Chairman
2716 (Ma)
Hearing Date: 8/4/08 Amended: 8/4/08
Consultant: Bob Franzoia Policy Vote: Labor 3-2
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BILL SUMMARY: AB 2716 would provide that an employee is entitled
to paid sick days which shall be accrued at a rate of no less
than one hour for every 30 hours worked. Employers would be
required to provide paid sick days, upon request, for diagnosis,
care, or treatment of health conditions of the employee or an
employee's family member, or for leave related to domestic
violence or sexual abuse. The bill would require employers to
satisfy specific posting and notice and recordkeeping
requirements. The bill would require the Labor Commissioner to
administer and enforce these requirements, including the
adoption of regulations, investigation, mitigation, and relief
of violations of these requirements. The bill would specify
that it applies to in-home support services (IHSS) except where
a collective bargaining agreement provides for an incremental
wage increase sufficient to satisfy the bill's requirements for
accrual of sick days. The provisions of the bill would not
apply to employees covered by a collective bargaining agreement
that provides for sick days, nor would it lessen any other
obligations of the employer to employees. The provisions of the
bill would not apply to employees in the construction industry
covered by a collective bargaining agreement if the agreement
expressly waives the requirements of this bill in clear and
unambiguous terms.
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Fiscal Impact (in thousands)
Major Provisions 2008-09 2009-10 2010-11 Fund
Enforcement $840 $560 $460 General
Regulations $30 $60 General
Compensation of IHSS Unknown, potentially millions of
dollarsGeneral
workers
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STAFF COMMENTS: This bill meets the criteria for referral to the
Suspense File.
This bill would define paid sick days means any time that is
compensated at the same wage as the employee normally earns
during regular work hours and is provided by an employer to an
employee for diagnosis, care, or treatment of an existing health
condition of, or preventive care for, an employee or an
employee's family members or for an employee who is a victim of
domestic violence or sexual assault.
The Division of Labor Standards Enforcement would have an
estimated 1,398 new claims annually. It is estimated each claim
would require about 2.5 hours of deputy labor commission time.
The estimate assumes an average annual caseload of 700 claims
per deputy labor commission. Claims which proceed to hearings
would require
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AB 2716 (Ma)
one industrial relations counsel. Additionally, there are one
time costs for regulations and ongoing costs of office technical
assistance and operations.
As noted by the Legislative Analyst, beginning in the late
1980s, California appellate courts issues a series of opinions
addressing the definition of a state-reimbursable mandate. The
courts found that a mandate is created when the state requires
local governments to provide a new or upgraded program to the
public, or imposes a unique requirement on local governments
that does not apply generally to residents and entities of the
state. In County of Los Angeles v State of California (1987)
and City of Sacramento v State of California (1990), the
California Supreme Court ruled that state laws that extended
worker compensation and unemployment insurance protections to
local employees did not constitute reimbursable mandates.
Specifically, the court found that local government employer
obligations were comparable to other employers, and were not
attributable to providing a new program to the public.
Together, these cases form the basis of what is commonly
referred to as the "law of general applicability." That is, if
a statute imposes similar obligations on the private and public
sector, the public sector's costs to comply with the requirement
do not constitute a state-reimbursable mandate.
While the "law of general applicability" appears to indicate
that the state is not responsible for a reimbursable mandate, it
is less clear at this time how the requirements of the bill
impact the IHSS program, which provides various services to
eligible aged, blind, and disabled persons who are unable to
remain safely in their homes without such assistance. The
counties may incur major costs as a result of this bill, and
those costs would not be reimbursable, the state may incur major
costs for a portion of the IHSS costs, or all of the costs if
the counties prevailed in mandate claim.
In IHSS, the recipient is technically the employer and a
provider can work for more than one recipient. It is unclear if
a provider would get seven days of sick leave per provider and
who the provider would contact regarding sick leave and how the
county is notified. How this information would be tracked,
records on sick leave balances maintained and compensation
adjusted is also unclear. This bill proposes to address this,
in part, by allowing a public authority to enter into a
collective bargaining agreement that provides an hourly wage
adjustment in an amount sufficient to satisfy the accrual
requirement (paid sick leave at the rate of no less than one
hour for every 30 hours worked), essentially money instead of
sick leave.
How IHSS providers are compensated could have a major cost
impact. There are an estimated 348,383 providers that average
1,180 hours of work annually. Divided by the accrual rate of 30
hours specified in this bill that amounts to approximately 39
days of sick leave per provider. At an average wage of $11.22,
the hourly wage adjustment would amount to $441 annually per
provider. Multiplied by the estimated 348,338 providers, that
is approximately $154,000,000 annually. The state share of this
would be approximately $50,000,000 (32.5 percent cost sharing
ratio) and the county share would be approximately $27,000,000
(17.5 percent) with the rest being the federal share (50
percent).
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AB 2716 (Ma)
An estimated 58 percent of IHSS providers are related to the
IHSS recipient for whom they provide care. Additionally, many
IHSS recipients cannot go for even one day without the services
provided to them. If the usual provider is sick, a back-up
provider would likely be provided from the registry maintained
by the public authorities that act as the employer of record for
IHSS providers in most counties. (There are a few counties that
do not have public authorities). Unlike other jobs where the
work can be put over to the next day or other employees can
absorb the work without incurring a second payment of wages, for
many cases in IHSS, the back-up provider will be paid in
addition to the sick leave payment.