BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                  AB 243
                                                                  Page  1

          Date of Hearing:   March 30, 2011

                     ASSEMBLY COMMITTEE ON LABOR AND EMPLOYMENT
                                Sandre Swanson, Chair
             AB 243 (Alejo) - As Proposed to be Amended:  March 30, 2011
           
          SUBJECT  :   Labor contractors.

           SUMMARY  :  

          1)Requires an employer who is a farm labor contractor (FLC) to 
            disclose on the itemized payroll statement furnished to 
            employees the name and address of the grower or other FLC that 
            secured the employer's services.  

          2)Provides that the listing by the FLC of the name and address 
            of the legal entity that secured the services of the employer 
            on the itemized payroll statement shall not create any 
            liability on the part of that legal entity.

           EXISTING LAW :

          1)Provides that every employer must furnish each employee with 
            an itemized statement at the time of each payment of wages 
            that shows, among other things, the name and address of the 
            legal entity that is the employer.  A knowing and intentional 
            violation of this provision is a misdemeanor.

          2)Exempts the state or a city, county, city and county, 
            district, or other governmental entity from the above 
            provisions.

          3)Prohibits a person from acting as a FLC until a license to do 
            so has been issued by the Labor Commissioner (LC).

          4)Prohibits a person from knowingly entering into an agreement 
            for the services of a FLC who is not licensed.

          5)Requires all garment contractors provide the name of the 
            garment manufacturer on an employee's payroll statement.

           FISCAL EFFECT  :   Unknown

           COMMENTS  :   According to the sponsor, California Rural Legal 
          Assistance Foundation (CRLAF), more than 40,000 California farms 








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          grow fruits and vegetables on almost four million acres in this 
          state.  Therefore, CRLAF states that it is not surprising that a 
          2006 survey of Central Valley farm workers found that 70% could 
          not identify the name of the farm they were working on.

          The same survey by CRLAF found that 56% had not been paid 
          minimum wage when working by a piece rate; 31% had not been paid 
          all the overtime they were owed; and that 42% had unexplained 
          deductions made from their pay.

          Most growers do not hire their farm workers directly.  Industry 
          experts estimate that between 60% and 80% of harvest work is 
          supplied to growers by FLC's.  Without being able to readily 
          identify the grower or other FLC who hired the contractor, 
          enforcement actions against the contractor are unlikely to 
          either make the worker whole for wages owed or to have any 
          deterrent effect at all against a grower who may, under certain 
          circumstances, share legal responsibility for the contractor's 
          labor law violations.  

          Finally, the sponsor states this bill simply requires a FLC to 
          list on the farm workers' pay stub information about the grower 
          or other FLC to whom the worker was furnished during the pay 
          period.  Current state law already requires this information to 
          be provided by garment contractors since 2002, and some 
          responsible FLC's already provide it on a voluntary basis 
          suggesting it is already technically feasible to do so and also 
          suggest that honest growers and FLC's have nothing to fear from 
          providing the information.  

          A coalition of agricultural groups opposes this measure, stating 
          that it will impose joint liability for the illegal acts of a 
          farm labor contractor on a grower.  They support penalties for 
          FLC's that choose not to follow the law, however, they argue 
          this bill fails to distinguish the good from the bad creating 
          new liabilities for all.

          The sponsor of this bill, CRLAF and the author, hope to address 
          the oppositions concerns with the proposed amendment to be taken 
          in Committee that the listing by the FLC of the name and address 
          of the grower or other FLC that secured the services of the 
          employer on the itemized payroll statement shall not create any 
          liability on the part of that legal entity.

           PRIOR AND RELATED LEGISLATION  :








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          This bill is similar to AB 377 (Arambula) of 2007.  AB 377 was 
          vetoed by Governor Schwarzenegger his veto message stated, in 
          part, "While I maintain my support for the concept of helping 
          farmworkers secure all wages owed to them, I am still concerned 
          that this bill does nothing to bring unlicensed farm labor 
          contractors and others who flaunt the law into compliance.  
          Those who have not bothered to obtain the necessary licensure 
          required by the state or otherwise comply with labor laws are 
          highly unlikely to comply with this new requirement.  As such, 
          the only practical effect of this bill is to impose a new 
          liability on farmers and growers who have lawfully contracted 
          with licensed contractors."

          AB 2327 (Arambula) of 2006 was nearly identical to this bill and 
          was vetoed by the Governor.

          SB 101 (Battin), Chapter 103, Statutes of 2005, was a technical 
          clean-up bill related to SB 1618 (Battin), Chapter 860, Statutes 
          of 2004,which added the provision that only the last four digits 
          of an employee's social security number shall appear on pay 
          stubs no later than January 1, 2008. 

           REGISTERED SUPPORT / OPPOSITION  :   

           Support 
           
          California Catholic Conference, Inc.
          California Rural Legal Assistance Foundation (Sponsor)
          California Teamsters Public Affairs Council
          Northern California District Council of the International 
          Longshore and Warehouse Union
          United Food and Commercial Workers-Western States Conference

           Opposition 
           
          Agricultural Council of California
          Allied Grape Growers
          California Association of Winegrape Growers
          California Citrus Mutual
          California Chamber of Commerce
          California Cotton Growers
          California Cotton Ginners
          California Farm Bureau Federation
          California Grape and Tree Fruit League








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          California Pear Growers
          California Seed Association
          California State Floral Association
          California Wheat Growers Association
          California Women for Agriculture
          Family Winemakers of California
          Grower-Shipper Association of Central California
          Nisei Farmers League
          Ventura County Agricultural Association
          Western Agricultural Processors Association
          Western Growers Association
          Western Pistachio Association
          Wine Institute


           Analysis Prepared by  :    Lorie Erickson / L. & E. / (916) 
          319-2091