BILL ANALYSIS Ó
AB 1744
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Date of Hearing: April 18, 2012
ASSEMBLY COMMITTEE ON LABOR AND EMPLOYMENT
Sandre Swanson, Chair
AB 1744 (Lowenthal) - As Amended: March 29, 2012
SUBJECT : Employee compensation: itemized statements.
SUMMARY : Requires temporary services employers to disclose on
the itemized payroll statement furnished to employees the name
and address of the legal entities that secured the services of
the employer and total hours worked for each 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)Requires all garment contractors provide the name of the
garment manufacturer on an employee's payroll statement.
4)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.
FISCAL EFFECT : Unknown
COMMENTS : According to the author, the percentage of
Californians whose jobs are temporary has nearly quadrupled in
the past 30 years. The author states that "temporary services
employers" are not required to include the length of time the
employee worked for a specific legal entity on the employee's
paystub. According to the author, listing the legal entities
who secure the employee's services and the hours worked will
bring clarity to temporary employees and modernize the Labor
Code to reflect this growing form of alternative employment.
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Research suggests that the temporary service industry is
expanding and moving from a stopgap-staffing provider to a more
systematic and continuous role as an intermediary between
companies and labor supplies across a broad array of industries
and occupations (Peck and Theodore, 2005). According to the
United States Bureau of Labor Statistics temporary employment in
the U.S. increased from 1.1 million to 2.3 million and in 2008,
totaling 1.7 percent of total U.S. employment.
The Bureau of Field Enforcement (BOFE) within the Division of
Labor Standards Enforcement (DLSE) investigates complaints and
takes enforcement actions to ensure employees are not being
required or permitted to work under unlawful conditions.
Enforcement action taken by BOFE investigators involves the
enforcement of child labor laws; the requirement of employers to
carry workers' compensation insurance coverage; audits of
payroll records, collection of unpaid minimum wages, overtime,
as well as prevailing and other unpaid wages; the issuance of
civil and criminal citations; the confiscation of illegally
manufactured garments; and injunctive relief to preclude further
violations of the law.
In calendar year 2010 (the most recent year for which data is
available) the BOFE conducted a total of 9,034 inspections,
resulting in a total of 4,367 citations. The largest single
source of violations and citations was the failure to carry
workers' compensation insurance with 2,155 citations in 2010.
Though BOFE issued only 894 citations for itemized wage
statement violations, the dollar amount of assessments for this
citation category in the amount of $7,231,500 is second to that
of workers' compensation insurance.
Current state law requires farm labor contractors (FLC) to
disclose on the itemized statement the name and address of the
grower or other FLC that secured the employers' services. The
law also 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. State law also
requires this information to be provided by garment contractors.
On February 15, 2012, this Committee conducted an informational
hearing entitled, "Confronting the Challenges of a Subcontracted
Economy: The Experience of Warehouse Workers in the Logistics
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Industry as a Case Study." The hearing explored the overall
issue of whether an employment model that relies heavily upon a
"subcontracted" workforce results in a situation in which
workers' rights are adequately protected, and whether
enforcement agencies are able to adequately enforce existing law
to hold responsible parties accountable. The hearing focused
primarily on the warehouse industry as a case study that has
garnered recent attention. The hearing also examined whether
state policy adequately addresses the situation or whether
policymakers should consider additional regulatory or statutory
changes.
ARGUMENTS IN SUPPORT :
The California Labor Federation (CLF), writing in support of
this bill, states that it will ensure that temporary employees
are properly paid. CLF writes that temporary workers are
particularly vulnerable to abuse and often have no guarantee of
work and do not know ahead of time where they will be dispatched
or what they will be asked to do. They note that some temporary
workers rotate between assignments with different rates of pay
for different tasks or sites. CLF writes that this modest bill
provides essential protection to temporary workers. In their
letter of support, the American Federation of State, County and
Municipal Employees (AFSCME), writes that listing the legal
entities who secured their services and hours worked on the
paystubs of temporary employees will modernized the labor code
to reflect the growing form of alternate employment.
ARGUMENTS IN OPPOSITION :
In a letter expressing opposition, the American Staffing
Association (ASA) and the California Staffing Professionals
(CSP) write that there has been no demonstrated need for this
bill. ASA and CSP state that the temporary service industry
employed close to 3 million people per day nationwide in 2011
and they were not aware of their employees desire to have client
information added to their paystub. According to ASA and CSP,
employees are given the name and address of the client and a
description of the work they will be performing when they accept
an assignment. In addition, ASA and CSP write that this bill
would add time, expense, and possible reconfiguration of the
software needed to generate the paycheck. They note that the
money and time spent on this activity could be used for better
purposes, such training employees or finding their employees job
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assignments.
REGISTERED SUPPORT / OPPOSITION :
Support
American Federation of State, County and Municipal Employees
California Labor Federation, AFL-CIO
California Rural Legal Assistance Foundation
Opposition
American Staffing Association
California Staffing Professionals
Analysis Prepared by : Shannon McKinley / L. & E. / (916)
319-2091