BILL ANALYSIS                                                                                                                                                                                                    

                                                                  AB 508
                                                                  Page  1

          Date of Hearing:   May 4, 2011

                                Felipe Fuentes, Chair

                AB 508 (Swanson) - As Introduced:  February 15, 2011 

          Policy Committee:                              Labor and 
          Employment   Vote:                            5-1

          Urgency:     No                   State Mandated Local Program: 
          Yes    Reimbursable:              Yes


          This bill extends an existing bid preference for public transit 
          contractors to include solid waste handling and recycling 
          contractors.  The existing bid preference requires public 
          transit contractors to retain the employees of the prior 
          contractor/subcontractor for at least 90 days.    

           FISCAL EFFECT  

          Potential, unknown GF and GF/98 state reimbursable mandated 
          costs likely in the hundreds of thousands to extend a current 
          bid preference to solid waste handling and recycling 


           1)Background  .  SB 158 (Alarcon), Chapter 103, Statutes of 2003, 
            required an awarding authority to give a 10% bid preference to 
            a public transit contractor who agreed to retain the employees 
            of the prior contractor/subcontractor for at least 90 days.  
            Chapter 103 further exempted a contractor/subcontractor from 
            retaining employees for cause, which is limited to the 
            particular employee's performance while working under the 
            prior contract or the employee's failure of any controlled 
            substances and alcohol test, physical examination, criminal 
            background check required by law as a condition of employment, 
            or other standard hiring qualification lawfully required by 
            the successor contractor/subcontractor. 

            Existing law also clarifies that the successor 
            contractor/subcontractor is not required to pay the same wages 


                                                                  AB 508
                                                                  Page  2

            or benefits provided by the prior contractor/subcontractor.  
            Likewise, an employee who was not offered employment or was 
            discharged without cause may bring action against the 
            successor contractor/subcontractor in superior court, as 

           2)Rationale .   Proponents of the bill cite the state's 12% 
            unemployment as evidence of the state's week economy and the 
            need to preserve jobs.  According to the author, "When cities 
            and counties contract for services like garbage and recycling 
            disposal, they are often focused on the costs of the bids, the 
            level of service provided, and the type of diversion offered. 
            In many cases, the workers fall through the cracks when 
            contracts change hands. The existing workforce, trained and 
            experienced, is summarily laid off and replaced.  This bill 
            rewards companies who retain existing garbage and recycling 
            employees for ninety days after the new contract takes effect 
            with a 10% bid preference. This allows the company an 
            opportunity to decide whether to retain the employee, while 
            giving the employee additional time to prepare for a possible 
            layoff job." 
            Analysis Prepared by  :    Kimberly Rodriguez / APPR. / (916)