BILL ANALYSIS                                                                                                                                                                                                    Ó






                 Senate Committee on Labor and Industrial Relations
                                 Ted W. Lieu, Chair

          Date of Hearing: June 27, 2012               2011-2012 Regular 
          Session                              
          Consultant: Martha Gutierrez                 Fiscal:Yes
                                                       Urgency: No
          
                                  Bill No: AB 1675
                                   Author: Bonilla
                        As Introduced/Amended: March 20, 2012
          

                                       SUBJECT
          
                   Farm labor contractors: licenses: civil penalty


                                      KEY ISSUE

          Should farm labor contractors have to pay civil penalties if 
          they are found to be operating without a license? 
          

                                       PURPOSE
          

          To establish civil penalties for farm labor contractors who are 
          found to have violated license requirements.

                                      ANALYSIS
          
           Existing law  defines a "farm labor contractor" 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: furnished board, lodging. or transportation 
          for those workers as specified.  (Labor Code § 1682)

           Existing law  includes within the definition of farm labor 
          contractor the inclusion of a "day hauler."  Day hauler is any 
          person who is employed by a farm labor contractor to transport, 
          for a fee, by motor vehicle, workers to render personal services 









          in connection with the production of any farm products, under 
          the direction of a third person. (Labor Code § 1682.3)

           Existing law  requires farm labor contractors to be licensed by 
          the Labor Commissioner and to comply with specified employment 
          laws applicable to farm labor contractors.  To obtain a license 
          the person has to deposit with the Labor Commissioner a security 
          bond in the amount based on the size of the person's annual 
          payroll for all employees.  The person must also take a written 
          examination; and must correctly answer at least eighty five 
          percent (85%) of the questions posed within the four hour time 
          period allotted.  This examination will ensure that the person 
          has knowledge in current laws regarding wages, hours, and 
          working conditions, penalties, employee housing and 
          transportation, collective bargaining, field sanitation and safe 
          work practices relating to pesticide use, field reentry 
          regulations and symptoms and appropriate treatment of pesticide 
          poisoning.  In addition, the person has to enroll and 
          participate in at least eight hours of relevant, educational 
          classes each year.  The classes shall be chosen by the Labor 
          Commissioner.  (Labor Code § 1684)  

           Existing law  specifies that when a person is found to be in 
          violation of farm labor contractor requirements they can receive 
          a misdemeanor punishable by specified fines, or imprisonment in 
          the county jail for not more than six months, or both.  (Labor 
          Code § 1697)
           

          This Bill  would establish civil penalties for failure to obtain 
          the required farm labor contractors license.  Specifically, this 
          bill:

             1.   Makes a person who acts as a farm labor contractor 
               without a license from the Labor Commissioner subject to a 
               civil penalty as follows:

               a)     The initial citation for a person who violates this 
                 section is subject to a citation of, one hundred dollars 
                 ($100) for each farmworker employed by the unlicensed 
                 person, plus one hundred dollars ($100) for each calendar 
                 day that a violation occurs, for a total penalty not to 
          Hearing Date:  June 27, 2012                             AB 1675  
          Consultant: Martha Gutierrez                             Page 2

          Senate Committee on Labor and Industrial Relations 
          








                 exceed ten thousand dollars ($10,000).

               b)     The second citation shall be, two hundred dollars 
                 ($200) for each farmworker employed by the unlicensed 
                 person, plus two hundred dollars ($200) for each calendar 
                 day that a violation occurs, for a total penalty not to 
                 exceed twenty thousand dollars ($20,000).

               c)     The third or subsequent citation, five hundred 
                 dollars ($500) for each farmworker employed by the 
                 unlicensed person, plus five hundred dollars ($500) for 
                 each calendar day that a violation occurs, for a total 
                 penalty not to exceed fifty thousand dollars ($50,000).

             1.   Requires the labor Commissioner to issue a citation if, 
               upon inspection determines that a person has violated the 
               license requirements.

             2.   Requires civil penalties collected from this section to 
               be deposited into the Farmworker Remedial Account.  

             3.   Specifies that the civil penalties provided in this 
               section are in addition to any other penalty provided by 
               current law.  

             4.   Specifies that the required "license" under this section 
               includes a letter of authorization by the labor 
               Commissioner to legally operate as a farm labor contractor. 





                                      COMMENTS

          
          1.  Need for this bill?
           
            Currently, farm labor contractors are required to obtain a 
            license from the Labor Commissioner in order to legally 
            operate in the state.  The person must take a written 
            examination and must correctly answer at least eighty five 
          Hearing Date:  June 27, 2012                             AB 1675  
          Consultant: Martha Gutierrez                             Page 3

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            percent (85%) of the questions posed within the four hour time 
            period allotted.  This examination will ensure that the person 
            has knowledge in current laws regarding wages, hours, and 
            working conditions, penalties, employee housing and 
            transportation, collective bargaining, field sanitation and 
            safe work practices relating to pesticide use, field reentry 
            regulations and symptoms and appropriate treatment of 
            pesticide poisoning.  In addition, the person has to enroll 
            and participate in at least eight hours of relevant; 
            educational classes each year to ensure education continues.  

            Unfortunately, heat-related deaths are a reminder that 
            agriculture is one of the few industries in this state and 
            country where a person can be worked to death.  Those who 
            survive heat illness can still develop serious conditions, 
            including heart, liver, kidney, and muscle damage, nervous 
            system problems, and blood disorders.  For these reasons it is 
            important that employers are adequately educated on all areas 
            of potential farm work related hazards. 


            Under existing law, a person who violates farm labor 
            contractor requirements can be found guilty of a misdemeanor 
            punishable by fines, or imprisonment in the county jail for 
            not more than six months, or both.  AB 1675 would assist the 
            Labor Commissioner in its enforcement efforts by also imposing 
            civil penalties for farm labor contractors operating without a 
            license.  This additional penalty will serve as a deterrent 
            for those contractors disobeying the law. 


          2.  Proponent Arguments  :
            
            According to the author, this bill guarantees that bad actors 
            are penalized for breaking the law.  The penalty will serve as 
            a deterrent for disobeying the law or to re-offend. They argue 
            that this legislation will also assist the Division of Labor 
            Standards Enforcement in its labor law enforcement efforts, 
            and send a message to unlicensed farm labor contractors that 
            the consequences of operating without a license now carry the 
            likelihood of the imposition of stiff civil penalties.  
            They further state that AB 1675 will also require that the 
          Hearing Date:  June 27, 2012                            AB 1675  
          Consultant: Martha Gutierrez                             Page 4

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            civil penalties collected from unlicensed contractors be 
            deposited in a pre-existing farm worker wage protection fund 
            which ensures that unlicensed contractors help finance a 
            system that has been making disbursements for farm workers 
            cheated out of wages by unlicensed farm labor contractors (and 
            which is currently funded by a portion of each licensed farm 
            labor contractor's annual license fee).

            According to the sponsor of this bill, the California Rural 
            Legal Assistance Foundation licensing violations are rarely, 
            if ever, prosecuted, and leave the Labor Commissioner, without 
            the legal weapons she has in other contexts, e.g. garment, car 
            washing and construction contracting, to deter unlicensed 
            contractor activities through assessment of civil penalties.  
            They argue that, for example, A car wash employer who fails to 
            register as a car wash establishment is subject to a civil 
            penalty of one hundred ($100) per day, up to a maximum of ten 
            thousand dollars ($10, 000), the employer conducts car washing 
             and polishing while unregistered.  A garment manufacturer who 
            does not comply with their licensing requirements are subject 
            to a civil penalty of one hundred dollars ($100) for each 
            affected employee, for the initial violation, and two hundred 
            dollars ($200) per employee for second or subsequent 
            violations.  A construction contractor who is found operating 
            without a license is subject to a civil penalty of two hundred 
            dollars ($200) per employee for each day of the contract.  The 
            civil penalties deter bad actors from breaking the law. This 
            bill will allow the Labor Commissioner to issue a civil 
            penalty for the first, second or third offence in graduated 
            amounts is designed to deter future misconduct.  

            

          3.  Opponent Arguments  :

            None on file. 



          4.  Prior Legislation  :

            AB 243 (Alejo), Chapter 761, Statutes of 2011
          Hearing Date:  June 27, 2012                             AB 1675  
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            Required an employer who is a farm labor contractor (FLC) to 
            disclose on the itemized payroll statement furnished to 
            employees the name and address of services.  It also provided 
            that the list by the FLC of the mane and address of the legal 
            entity that secured the services of the employer on the 
            itemized payroll statement that shall not create any liability 
            on the part of that legal entity. 

            SB 1514 (Solis), Chapter 875, Statutes of 1998
            Imposed a $500 civil penalty on garment manufacturers, with no 
            employed workers, who fail to register with the Labor 
            Commissioner. The bill also eliminated the misdemeanor 
            associated with this violation for these manufacturers. 

            AB 1688 (Goldberg), Chapter 875, Statutes of 2003
            Established a system to regulate the employment of workers in 
            the car washing and polishing industry, including a civil fine 
            structure for car wash establishments that fail to register 
            with the Labor Commissioner.  The bill also established the 
            Car Wash Worker Restitution Fund and the Car Wash Worker Fund, 
            the latter of which is partly funded by fines associated with 
            violations of the labor law. 

                                       SUPPORT
          
          Agricultural Council of California
          American Pistachio Growers
          California Chamber of Commerce
          California Association of Nurseries and Garden Centers
          California Bean Shippers Association
          California Catholic Conference
          California Cherry Export Association
          California Citrus Mutual
          California Communities United Institute
          California Conference Board of the Amalgamated Transit Union
          California Conference of Machinists
          California Cotton Ginners Association
          California Farm Bureau Federation
          California Grape and Tree Fruit League
          California Labor Federation
          California Pear Growers Association
          California Rural Legal Assistance Foundation
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          Consultant: Martha Gutierrez                             Page 6

          Senate Committee on Labor and Industrial Relations 
          








          California Seed Association
          California State Floral Association
          California Teamsters Public Affairs Council
          Engineers and Scientists of California
          International Longshore & Warehouse Union
          Nisei Farmers League
          Professional and Technical Engineers, Local 21
          UNITE HERE
          United Food and Commercial Workers Union, Western States Council
          Western Agricultural Processors Association
          Western Growers
          Wine Institute
          

                                     OPPOSITION
          

          None on file. 























          Hearing Date:  June 27, 2012                             AB 1675  
          Consultant: Martha Gutierrez                             Page 7

          Senate Committee on Labor and Industrial Relations