California Legislature—2013–14 Regular Session

Assembly Bill No. 1239

Introduced by Assembly Member Holden

February 22, 2013

An act to amend Section 6108 of the Public Contract Code, relating to public contracts.

LEGISLATIVE COUNSEL’S DIGEST

AB 1239, as introduced, Holden. Public contracts: certification: labor conditions: sweatshops.

Existing law requires specified contracts entered into by state agencies to require contractors to certify that no apparel, garments, corresponding accessories, equipment, materials, or supplies furnished to the state pursuant to the contract have been laundered or produced by various unauthorized and exploitive labor conditions, such as sweatshops, as prescribed.

This bill would make nonsubstantive changes to those provisions.

Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Section 6108 of the Public Contract Code is
amended to read:

6108.  

(a) (1)  begin delete Every end delete begin insert Each end insert contract entered into by begin delete any end delete begin insert a end insert state
agency for the procurement or laundering of apparel, garments, or
corresponding accessories, or the procurement of equipment,
materials, or supplies, other than procurement related to a public
works contract, shall require that a contractor certify that no
apparel, garments, corresponding accessories, equipment, materials,
or supplies furnished to the state pursuant to the contract have been
laundered or produced in whole or in part by sweatshop labor,
forced labor, convict labor, indentured labor under penal sanction,
abusive forms of child labor, or exploitation of children in
sweatshop labor, or with the benefit of sweatshop labor, forced
labor, convict labor, indentured labor under penal sanction, abusive
forms of child labor, or exploitation of children in sweatshop labor.
The contractor shall agree to comply with this provision of the
contract.

(2) The contract shall specify that the contractor is required to
cooperate fully in providing reasonable access to the contractor’s
records, documents, agents, employees, or premises if reasonably
required by authorized officials of the contracting agency, the
Department of Industrial Relations, or the Department of Justice
determine the contractor’s compliance with the requirements under
paragraph (1).

(b) (1) Any contractor contracting with the state who knew or
should have known that the apparel, garments, corresponding
accessories, equipment, materials, or supplies furnished to the state
were laundered or produced in violation of the conditions specified
in subdivision (a) when entering into a contract pursuant to
subdivision (a), may, subject to subdivision (c), have any or all of
the following sanctions imposed:

(A) The contract under which the prohibited apparel, garments,
or corresponding accessories, equipment, materials, or supplies
were laundered or provided may be voided at the option of the
state agency to which the equipment, materials, or supplies were
provided.

(B) The contractor may be assessed a penalty that shall be the
greater of one thousand dollars ($1,000) or an amount equaling
20 percent of the value of the apparel, garments, corresponding
accessories, equipment, materials, or supplies that the state agency
demonstrates were produced in violation of the conditions specified
in paragraph (1) of subdivision (a) and that were supplied to the
state agency under the contract.

(C) The contractor may be removed from the bidder’s list for a
period not to exceed 360 days.

(2) Any moneys collected pursuant to this subdivision shall be
deposited into the General Fund.

(c) (1) When imposing the sanctions described in subdivision
(b), the contracting agency shall notify the contractor of the right
to a hearing, if requested, within 15 days of the date of the notice.
The hearing shall be before an administrative law judge of the
Office of Administrative Hearings in accordance with the
procedures specified in Chapter 5 (commencing with Section
11500) of Part 1 of Division 3 of Title 2 of the Government Code.
The administrative law judge shall take into consideration any
measures the contractor has taken to ensure compliance with this
section, and may waive any or all of the sanctions if it is determined
that the contractor has acted in good faith.

(2) The agency shall be assessed the cost of the administrative
hearing, unless the agency has prevailed in the hearing, in which
case the contractor shall be assessed the cost of the hearing.

(d) (1) Any state agency that investigates a complaint against
a contractor for violation of this section may limit its investigation
to evaluating the information provided by the person or entity
submitting the complaint and the information provided by the
contractor.

(2) Whenever a contracting officer of the contracting agency
has reason to believe that the contractor failed to comply with
paragraph (1) of subdivision (a), the agency shall refer the matter
for investigation to the head of the agency and, as the head of the
agency determines appropriate, to either the Director of Industrial
Relations or the Department of Justice.

(e) (1) For purposes of this section, “forced labor” shall have
the same meaning as in Section 1307 of Title 19 of the United
States Code.

(2) “Abusive forms of child labor” means any of the following:

(A) All forms of slavery or practices similar to slavery, such as
the sale and trafficking of children, debt bondage, and serfdom
and forced or compulsory labor, including forced or compulsory
recruitment of children for use in armed conflict.

(B) The use, procuring, or offering of a child for prostitution,
for the production of pornography, or for pornographic
performances.

(C) The use, procuring, or offering of a child for illicit activities,
in particular for the production and trafficking of illicit drugs.

(D) All work or service exacted from or performed by any
person under the age of 18 years either under the menace of any
penalty for its nonperformance and for which the worker does not
offer oneself voluntarily, or under a contract, the enforcement of
which can be accomplished by process or penalties.

(E) All work or service exacted from or performed by a child
in violation of all applicable laws of the country of manufacture
governing the minimum age of employment, compulsory education,
and occupational health and safety.

(3) “Exploitation of children in sweatshop labor” means all
work or service exacted from or performed by any person under
the age of 18 years in violation of more than one law of the country
of manufacture governing wage and benefits, occupational health
and safety, nondiscrimination, and freedom of association.

(4) “Sweatshop labor” means all work or service exacted from
or performed by any person in violation of more than one law of
the country of manufacture governing wages, employee benefits,
occupational health, occupational safety, nondiscrimination, or
freedom of association.

(5) “Apparel, garments, or corresponding accessories” includes,
but is not limited to, uniforms.

(6) Notwithstanding any other provision of this section, “forced
labor” and “convict labor” begin delete do end delete begin insert shall end insert not include work or services
performed by an inmate or a person employed by the Prison
Industry Authority.

(7) “State agency” means any state agency in this state.

(f) (1) On or before February 1, 2004, the Department of
Industrial Relations shall establish a contractor responsibility
program, including a Sweatfree Code of Conduct, to be signed by
all bidders on state contracts and subcontracts. Any state agency
responsible for procurement shall ensure that the Sweatfree Code
of Conduct is available for public review at least 30 calendar days
between the dates of receipt and the final award of the contract.
The Sweatfree Code of Conduct shall list the requirements that
contractors are required to meet, as set forth in subdivision (g).

(2) Upon implementation in the manner described in paragraph
(4), every contract entered into by any state agency for the
procurement or laundering of apparel, garments, or corresponding
accessories, or for the procurement of equipment or supplies, shall
require that the contractor certify in accordance with the Sweatfree
Code of Conduct that no apparel, garments, or corresponding
accessories, or equipment, materials, or supplies, furnished to the
state pursuant to the contract have been laundered or produced, in
whole or in part, by sweatshop labor.

(3) The appropriate procurement agency, in consultation with
the Director of Industrial Relations, shall employ a phased and
targeted approach to implementing the Sweatfree Code of Conduct.
Sweatfree Code of Conduct procurement policies involving apparel,
garments, and corresponding accessories may be permitted a
phasein period of up to one year for purposes of feasibility and
providing sufficient notice to contractors and the general public.
The appropriate procurement agency, in consultation with the
Director of Industrial Relations, shall target other procurement
categories based on the magnitude of verified sweatshop conditions
and the feasibility of implementation, and may set phasein goals
and timetables of up to three years to achieve compliance with the
principles of the Sweatfree Code of Conduct.

(4) In order to facilitate compliance with the Sweatfree Code
of Conduct, the Department of Industrial Relations shall explore
mechanisms employed by other governmental entities, including,
but not limited to, New Jersey Executive Order 20, of 2002, to
ensure that businesses that contract with this state are in compliance
with this section and any regulations or requirements promulgated
in conformance with this section, as amended by Section 2 of
Chapter 711 of the Statutes of 2003. The mechanisms explored
may include, but not be limited to, authorization to contract with
a competent nonprofit organization that is neither funded nor
controlled, in whole or in part, by a corporation that is engaged in
the procurement or laundering of apparel, garments, or
corresponding accessories, or the procurement of equipment,
materials, or supplies. The Department of Industrial Relations, in
complying with this paragraph, shall also consider any feasible
and cost-effective monitoring measures that will encourage
compliance with the Sweatfree Code of Conduct.

(5) To ensure public access and confidence, the Department of
Industrial Relations shall ensure public awareness and access to
proposed contracts by postings on the Internet and through
communication to advocates for garment workers, unions, and
other interested parties. The appropriate agencies shall establish
a mechanism for soliciting and reviewing any information
indicating violations of the Sweatfree Code of Conduct by
prospective or current bidders, contractors, or subcontractors. The
agencies shall make their findings public when they reject
allegations against bidding or contracting parties.

(6) Contractors shall ensure that their subcontractors comply in
writing with the Sweatfree Code of Conduct, under penalty of
perjury. Contractors shall attach a copy of the Sweatfree Code of
Conduct to the certification required by subdivision (a).

(g)  begin delete No end delete begin insert A end insert state agency begin delete may end delete begin insert shall not end insert enter into a contract with
any contractor unless the contractor meets the following
requirements:

(1) Contractors and subcontractors in California shall comply
with all appropriate state laws concerning wages, workplace safety,
rights to association and assembly, and nondiscrimination standards
as well as appropriate federal laws. Contractors based in other
states in the United States shall comply with all appropriate laws
of their states and appropriate federal laws. For contractors whose
locations for manufacture or assembly are outside the United States,
those contractors shall ensure that their subcontractors comply
with the appropriate laws of countries where the facilities are
located.

(2) Contractors and subcontractors shall maintain a policy of
not terminating any employee except for just cause, and employees
shall have access to a mediator or to a mediation process to resolve
certain workplace disputes that are not regulated by the National
Labor Relations Board.

(3) Contractors and subcontractors shall ensure that workers
are paid, at a minimum, wages and benefits in compliance with
applicable local, state, and national laws of the jurisdiction in which
the labor, on behalf of the contractor or subcontractor, is performed.
Whenever a state agency expends funds for the procurement or
laundering of apparel, garments, or corresponding accessories, or
the procurement of equipment, materials, or supplies, other than
procurement related to a public works contract, the applicable
labor standards established by the local jurisdiction through the
exercise of either local police powers or local spending powers in
which the labor, in compliance with the contract or purchase order
for which the expenditure is made, is performed shall apply with
regard to the contract or purchase order for which the expenditure
is made, unless the applicable local standards are in conflict with,
or are explicitly preempted by, state law. A state agency may not
require, as a condition for the receipt of state funds or assistance,
that a local jurisdiction refrain from applying the labor standards
that are otherwise applicable to that local jurisdiction. The
Department of Industrial Relations may, without incurring
additional expenses, access information from any nonprofit
organization, including, but not limited to, the World Bank, that
gathers and disseminates data with respect to wages paid
throughout the world, to allow the Department of Industrial
Relations to determine whether contractors and subcontractors are
compensating their employees at a level that enables those
employees to live above the applicable poverty level.

(4) All contractors and subcontractors shall comply with the
overtime laws and regulations of the country in which their
employees are working.

(5) All overtime hours shall be worked voluntarily. Workers
shall be compensated for overtime at either (A) the rate of
compensation for regular hours of work, or (B) as legally required
in the country of manufacture, whichever is greater.

(6)  begin delete No end delete begin insert A end insert person begin delete may end delete begin insert shall not end insert be employed who is younger
than the legal age for children to work in the country in which the
facility is located. In no case may children under the age of 15
years be employed in the manufacturing process. Where the age
for completing compulsory education is higher than the standard
for the minimum age of employment, the age for completing
education shall apply to this section.

(7) There may be no form of forced labor of any kind, including
slave labor, prison labor, indentured labor, or bonded labor,
including forced overtime hours.

(8) The work environment shall be safe and healthy and, at a
minimum, be in compliance with relevant local, state, and national
laws. If residential facilities are provided to workers, those facilities
shall be safe and healthy as well.

(9) There may be no discrimination in hiring, salary, benefits,
performance evaluation, discipline, promotion, retirement, or
dismissal on the basis of age, sex, pregnancy, maternity leave
status, marital status, race, nationality, country of origin, ethnic
origin, disability, sexual orientation, gender identity, religion, or
political opinion.

(10)  begin delete No end delete begin insert A end insert worker begin delete may end delete begin insert shall not end insert be subjected to any physical,
sexual, psychological, or verbal harassment or abuse, including
corporal punishment, under any circumstances, including, but not
limited to, retaliation for exercising his or her right to free speech
and assembly.

(11)  begin delete No end delete begin insert A end insert worker begin delete may end delete begin insert shall not end insert be forced to use contraceptives
or take pregnancy tests. begin delete No end delete begin insert A end insert worker begin delete may end delete begin insert shall not end insert be exposed to
chemicals, including glues and solvents, that endanger reproductive
health.

(12) Contractors and bidders shall list the names and addresses
of each subcontractor to be utilized in the performance of the
contract, and list each manufacturing or other facility or operation
of the contractor or subcontractor for performance of the contract.
The list, which shall be maintained and updated to show any
changes in subcontractors during the term of the contract, shall
provide company names, owners or officers, addresses, telephone
numbers, e-mail addresses, and the nature of the business
association.

(h) Any person who certifies as true any material matter pursuant
to this section that he or she knows to be false is guilty of a
misdemeanor.

(i) The provisions of this section, as amended by Section 2 of
Chapter 711 of the Statutes of 2003, shall be in addition to any
other provisions that authorize the prosecution and enforcement
of local labor laws and may not be interpreted to prohibit a local
prosecutor from bringing a criminal or civil action against an
individual or business that violates the provisions of this section.

(j) (1) The certification requirements set forth in subdivisions
(a) and (f) begin delete do end delete begin insert shall end insert not apply to a credit card purchase of goods of
two thousand five hundred dollars ($2,500) or less.

(2) The total amount of exemption authorized herein shall not
exceed seven thousand five hundred dollars ($7,500) per year for
each company from which a state agency is purchasing goods by
credit card. It shall be the responsibility of each state agency to
monitor the use of this exemption and adhere to these restrictions
on these purchases.