BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 243|
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THIRD READING
Bill No: AB 243
Author: Alejo (D)
Amended: 4/4/11 in Assembly
Vote: 21
SENATE LABOR & INDUSTRIAL RELATIONS COMM. : 5-1, 6/29/11
AYES: Lieu, DeSaulnier, Leno, Padilla, Yee
NOES: Wyland
NO VOTE RECORDED: Runner
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 47-28, 5/23/11 - See last page for vote
SUBJECT : Labor contractors
SOURCE : California Rural Legal Assistance Foundation
DIGEST : This bill 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 FLCs that secured the employer's
services. This bill 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.
ANALYSIS : Existing law provides that every employer must
furnish each of his/her employees with an accurate itemized
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written statement at the time of each payment of wages that
shows, among other things, the following:
Gross and net wages earned.
Total hours worked by the employee.
All deductions.
Name of the employee and the last four digits of his/her
social security number or employee identification number.
Name and address of the legal entity that is the
employer.
Additionally, existing law requires that employers keep for
at least three years, and make available for inspection, a
copy of the statements or records. Under existing law, a
knowing and intentional violation of these provisions is
subject to civil penalties per employee per violation. In
addition, existing law exempts the state or a city, county,
city and county, district, or other governmental entity
from the above provisions.
Existing law prohibits a person from acting as a FLC until
a license to do so have been issued by the Labor
Commissioner. Existing law also prohibits a person from
knowingly entering into an agreement for the services of a
FLC who is not licensed.
Existing law defines "FLC" as any person who, for a fee,
employs workers to render personal services in connection
with the production of any farm products to, for, or under
the direction of a third person, or who recruits, solicits,
supplies, or hires workers on behalf of an employer engaged
in the growing or producing of farm products, and who, for
a fee, provides in connection therewith one or more of the
following services: furnishes board, lodging, or
transportation for those workers; supervises, times,
checks, counts, weighs, or otherwise directs or measures
their work; or disburses wage payments to these persons.
This bill:
1. Requires an employer who is a FLC to disclose on the
itemized payroll statement furnished to employees the
name and address of the legal entity that secured the
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employer's services.
2. Provides that the listing by an employer 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.
Comments
Historically, violations of wage, hour, and other
provisions of labor law have been found to be more
prevalent in certain industries, including the garment
industry, the janitorial industry, and the agricultural
industry. The U.S. Department of Labor and the California
Department of Industrial Relations have from time to time
concentrated enforcement activities on these industries.
The author's office cites that in the California
agricultural industry, an estimated 60 percent to 80
percent of harvest work is now done by labor contractors.
The author's office also cites a survey by the California
Rural Legal Assistance Foundation that found that 56
percent of central valley farm workers had not been paid
minimum wage when working on a piece rate, 31 percent had
not been paid all the overtime they were owed, and 42
percent had unexplained deductions made from their pay.
That survey also showed that 70 percent could not identify
the farm they were working on.
The author's office and sponsor believe that knowing the
identity of the legal entities that stand behind the
contractor is important in case there are workplace
problems. This bill is needed to require an employer who
is a FLC to disclose on the itemized payroll statement
furnished to employees the name and address of the grower
or legal entity that secured the employer's services.
Prior Legislation
AB 377 (Arambula) of 2007-08 Session, would have required
an employer who is a FLC to disclose in the itemized
statement furnished to employees the name and address of
the legal entity that secured the employer's services.
Subsequently, this bill was vetoed by Governor
Schwarzenegger, in his veto message he states, "Last year,
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I vetoed similar legislation intended to help provide
farmworkers with better information about the companies
with which farm labor contractors are contracting. 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 200-06 Session, would have required
an employer who is a FLC to disclose in the itemized
statement furnished to employees the name and address of
the legal entity that secured the employer's services.
Subsequently the bill was vetoed by Governor
Schwarzenegger, in his veto message he states, "I am
concerned that AB 2327 would have little practical effect
in helping farm workers secure unpaid wages. Too often,
the wages owed farm workers are owed by unlicensed farm
labor contractors. As these individuals have not bothered
to register with the state, it is highly unlikely they
would bother to place additional information on pay stubs,
assuming they issue pay stubs to employees in the first
place. As such, I am concerned that the only practical
effect of AB 2327 will be to place an unnecessary and
burdensome requirement on law-abiding contractors and
subject growers to additional liabilities through no fault
of their own."
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
SUPPORT : (Verified 8/11/11)
California Rural Legal Assistance Foundation (source)
California Catholic Conference
California Labor Federation
California Teamsters Public Affairs Council
National Lawyers Guild Labor and Employment Committee
Northern California District Council of the International
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Longshore and Warehouse Union
United Food and Commercial Workers-Western States
Conference
OPPOSITION : (Verified 8/11/11)
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
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
ARGUMENTS IN SUPPORT : According to the author's office,
most growers do not hire their farm workers directly.
Instead, the author's office argues, much of California's
harvest workforce is supplied to growers by labor
contractors. The author's office contends that although
FLCs are required to be licensed under state law, there is
no requirement that they disclose to farm workers the name
of the grower who is financially backing the contract for
their labor. According to the author's office and
proponents, 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
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contractor's labor law violations.
Proponents argue that more than 40,000 California farms
grow fruits and vegetables on almost four million acres in
this state. Therefore, proponents state, it is not
surprising that a 2006 survey of over 1,000 Central Valley
farm workers, conducted by the California Rural Legal
Assistance Foundation, found that 70 percent could not
identify the name of the farm they were working on.
According to proponents, it is important that workers know
the identity of the legal entities that stand behind the
contractor in case there are workplace problems (such as
failure to pay wages) where both the contractor and the
other entity have existing liability under state laws.
According to proponents, current state law already requires
this information to be provided by garment contractors, 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 FLCs have
nothing to fear from providing the information. According
to proponents, recent amendments were taken to address the
oppositions' assertion that this bill creates new "joint
liability" for growers. The amendment states that the
listing of the name and address of the entity or entities
that secured a farm labor contractor's services on the pay
stub of the farm labor contractor's farm worker employee
"shall not create any liability on the part of that legal
entity."
ARGUMENTS IN OPPOSITION : According to opponents, this
bill creates joint liability for any farmer that enters
into a legal contract for services with a FLC. Opponents
argue that this bill is similar to bills that have been
vetoed in years past and contend that the plain purpose of
this legislation is to impose liability for the illegal
acts of a FLC on a farmer. According to opponents, they
support strong penalties for FLCs that choose not to abide
by the law. Unfortunately, they argue, this bill fails to
distinguish between good and bad actors and creates new
liability for all.
ASSEMBLY FLOOR : 47-28, 5/23/11
AYES: Alejo, Allen, Ammiano, Atkins, Beall, Block,
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Blumenfield, Bonilla, Bradford, Brownley, Butler, Charles
Calderon, Campos, Carter, Cedillo, Davis, Dickinson, Eng,
Feuer, Fong, Fuentes, Furutani, Gatto, Gordon, Hall,
Hayashi, Roger Hernández, Hill, Hueso, Huffman, Lara,
Bonnie Lowenthal, Ma, Mendoza, Mitchell, Monning, Pan, V.
Manuel Pérez, Portantino, Skinner, Solorio, Swanson,
Torres, Wieckowski, Williams, Yamada, John A. Pérez
NOES: Achadjian, Bill Berryhill, Conway, Donnelly,
Fletcher, Beth Gaines, Garrick, Grove, Hagman, Halderman,
Harkey, Huber, Jeffries, Jones, Knight, Logue, Mansoor,
Miller, Morrell, Nestande, Nielsen, Norby, Olsen, Perea,
Silva, Smyth, Valadao, Wagner
NO VOTE RECORDED: Buchanan, Chesbro, Cook, Galgiani,
Gorell
PQ:do 8/16/11 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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