BILL ANALYSIS Ó AB 1544 Page 1 Date of Hearing: May 9, 2012 ASSEMBLY COMMITTEE ON APPROPRIATIONS Felipe Fuentes, Chair AB 1544 (V. Manual Perez) - As Amended: April 23, 2012 Policy Committee: Labor and Employment Vote: 5-1 Urgency: No State Mandated Local Program: No Reimbursable: No SUMMARY This bill establishes the California Agricultural Jobs and Industry Stabilization Act of 2012 (AJIS Act), which requires the Employment Development Department (EDD) to issue permits authorizing an undocumented person who meets specified criteria to reside and work as an employee in the state. Specifically, this bill: 1)Prohibits EDD from issuing permits under the AJIS Act until it certifies there are not enough state legal residents to fill all open agricultural and service industry jobs in the state. 2)Defines employee as an agricultural employee and a person employed to provide domestic services, janitorial/building maintenance services, food preparation services, or housekeeping services. 3)Establishes the following criteria for undocumented person to receive a permit: a) The person has established that he or she was present in the state before January 25, 2012 and has continuously resided here since this time. b) The person has established he or she was employed in the state as an agricultural or service industry worker before January 25, 2012. Further authorizes this person to establish employment status by submitting specified employment records. c) The person has paid a fee to EDD for costs to administer this program. AB 1544 Page 2 d) The person has not been convicted of a felony or misdemeanor involving bodily injury, threat of bodily injury, or property damage in excess of $500. 4)Prohibits EDD from granting a permit to an undocumented person unless he or she submits to fingerprints, as specified. Further requires EDD to use documents submitted for use in the fingerprinting process to conduct a background check of the person to determine program eligibility. 5)Requires EDD to issue a permit under the AJIS Act to the spouse or child (i.e., immediate family member) of an undocumented person who already received a permit under this act, as specified. Requires the immediate family member to comply with pay a fee and not have been convicted of a felony as specified above. 6)Prohibits an employer, within 90 days of implementing this bill, from employing an undocumented person who does not have a permit, as specified. 7)Specifies an employee permitted to work in the state under the AJIS Act is entitled to all of the same wage and hour and working condition protections under existing law provided to an employee who is a legal resident of the state. 8)Requires EDD (in conjunction with the Legislative Analyst Office), beginning three years after initial implementation of this act, to annually publish a report analyzing whether this program has caused displacement of employable legal residents of California in the agricultural and service industries. 9)Specifies this program is not intended to confer legal status in a manner that would restrict the enactment of superseding federal legislation. 10)Requires this program to remain in existence and requires EDD to administer it only to the extent monies are available in the AJIS Act Fund, as specified. FISCAL EFFECT 1)One-time GF costs, likely in excess of $20 million, to EDD to establish the infrastructure to implement this program, including developing a new automated system to store permit AB 1544 Page 3 information (e.g., fingerprinting and background checks). The one-time cost to add an additional withholding from an employees' payroll to an existing system used by EDD will be $19 million GF. 2)On-going GF costs, likely in excess of $7 million, to EDD to implement this program. These costs are associated with additional personnel to review permit applications and train and hire staff in regional offices. 3)Department of Justice (DOJ) preliminary estimates indicate between $3 million and $5 million in personnel costs to process an influx of fingerprinting submissions. 4)This bill establishes the AJIS Act Fund in the state GF and requires the fees collected for this program to be deposited in this fund. Further requires monies deposited in this fund to only be used to pay for EDD's costs to administer this program. This bill requires an unspecified fee sufficient to pay for all administrative costs incurred by EDD; any fee, however, will likely not cover the full cost of this program. COMMENTS 1)Background . According to a 2011 At Issue report by the Public Policy Institute of California (PPIC), the number of undocumented immigrants in the United States has fallen after several years of increase. PPPIC states: "From 1990 to 2007, the number of Ýundocumented] immigrants increased by an average of 500,000 per year, and the population grew from a few million to about 12 million. By 2009 the population had shrunk to approximately 11 million, and 2010 estimates suggest little change from 2009. California has experienced a similar decline: the Department of Homeland Security estimates that 2.6 million Ýundocumented] immigrants resided in California in 2010, a decline of 280,000 since 2008." The PPIC attributes the decrease in the number of undocumented immigrants to the county's severe economic downturn and increased enforcement efforts. For example, "Pre-recession unemployment rates were lower among Ýundocumented] immigrants than other workers, but are now higher. This has weakened the jobs magnet that attracts most Ýundocumented] immigrants to the United States. At the same time, stepped-up interior AB 1544 Page 4 enforcement has led to dramatic increases in deportations. In 2009, a record 393,000 Ýundocumented] immigrants were deported, compared to less than 200,000 annually in the early 2000s and less than 100,000 annually before 1997." Under federal law, people can enter the United States permanently or temporarily. Through permanent means, an individual receives a permanent resident card (green card) which enables him or her to work and he or she may apply for citizenship. An individual entering the country via temporary means (i.e., tourist, student, diplomat, agricultural worker) may not work or only work for a particular place; is not eligible for citizenship; and must leave the country when his or her visa expires. 2)Purpose . According to PPIC, in California, where the concentration of Ýundocumented] immigrants is almost twice as high as in the rest of the nation, about 9% of workers are Ýundocumented] immigrants. According to one estimate, 14% of workers in Los Angeles County are in the informal economy and more than half (61%) of those workers are Ýundocumented] immigrants." According to the author, "While programs such as the federal H-2A guest worker program and E-verify have been highlighted as options to protect jobs for U.S. citizens and legal residents, most growers in the U.S. agriculture industry argue that these programs threaten the viability and sustainability of their businesses. In the state's service industry, similar workforce dynamics have been documented among businesses that provide domestic services, janitorial or building maintenance services, food preparation services, and housekeeping services. These employers rely heavily on unauthorized workers as a sustainable labor supply." The author further states: "In the absence of federal comprehensive immigration reform, business interests in the states of Utah and Oklahoma have either passed or introduced legislation creating state guest worker programs. Several other states have studies or are considering the introduction of such state initiatives." 3)Does this bill apply all state labor laws to agricultural and service workers ? This bill states: "An employee permitted to work in this state pursuant to this chapter is entitled to all AB 1544 Page 5 the same wage and hour and working conditions protections under existing law provided to an employee who is a legal resident of California." Currently, some state labor laws do not apply to agricultural or certain service industry workers. For example, agricultural workers are not governed by the eight hour workday as other legal resident employees in the state. As such, it appears the language in this measure would require employers of agricultural and service workers to comply with all state labor laws, including ones that currently do not apply to them. 4)Opposition . The Mexican American Legal Defense and Education Fund (MALDEF), the California Immigrant Policy Center (CIPC), and the California Labor Federation (Labor Fed) oppose this bill for a number of reasons, including the following: a) Violation of federal law for states to govern immigration issues . According to MALDEF, "The Supreme Court held that the Supremacy Clause Ýof the U.S. Constitution] bars state involvement in immigration regulation. The ÝSupreme] Court recognized a form of constitutional preemption in the area of immigration, concluding 'the determination of who should or should not be admitted into the country, and the conditions under which a legal entrant may remain is a regulation of immigration and thus per se pre-empted by this constitutional power.'' This bill requires EDD, by May 1, 2013, to submit a formal request to the federal government to receive the necessary authority to administer the AJIS Act. MALDEF, however, contends there is no federal statute that provides the federal government with authority to grant such a request. b) No path to citizenship . Opponents argue that creating a guest worker program does not solve the fundamental problem of undocumented workers - how do they obtain U.S. citizenship? According to the CLF, "Guest worker programs have historically benefitted employers, not workers. Because workers are dependent on a particular employer or the ability to work in a particular industry, they are extremely vulnerable to abuse. A guest worker program without a path to permanent status is, by nature, exploitative." AB 1544 Page 6 c) False sense of security this program creates for undocumented workers . According to the Labor Fed, "this bill provides no protection to California's immigrant workers from the threat of deportation. Individuals who apply for a permit Ýunder this program] potentially could be at greater risk of being deported. Despite the proposed state employment authorization, eligible workers in the program will still be subject to federal immigration worksite enforcement actions. They will still be subject to possible termination of employment as a consequence of I-9 audits, E-Verify tentative non-confirmation notices, and Social Security Administration no match letters, as well as self-audits conducted by employers." Analysis Prepared by : Kimberly Rodriguez / APPR. / (916) 319-2081