BILL NUMBER: AB 1897	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  MAY 28, 2014
	AMENDED IN ASSEMBLY  MAY 23, 2014
	AMENDED IN ASSEMBLY  APRIL 10, 2014
	AMENDED IN ASSEMBLY  MARCH 28, 2014

INTRODUCED BY   Assembly Member Roger Hernández

                        FEBRUARY 19, 2014

   An act to add Section 2810.3 to the Labor Code, relating to
private employment.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1897, as amended, Roger Hernández. Labor contracting: client
liability.
   Existing law regulates the terms and conditions of employment and
establishes specified obligations of employers to employees. Existing
law prohibits a person or entity from entering into a contract for
labor or services with a construction, farm labor, garment,
janitorial, security guard, or warehouse contractor, if the person or
entity knows or should know that the contract or agreement does not
include sufficient funds for the contractor to comply with laws or
regulations governing the labor or services to be provided.
   This bill would require a client employer to share with a labor
contractor all civil legal responsibility and civil liability for the
payment of wages, the failure to report and pay all required
employer contributions, worker contributions, and personal income tax
withholdings, and the failure to obtain valid workers' compensation
coverage. The bill would define a client employer as a business
entity that obtains or is provided workers to perform labor or
services within the usual course of business from a labor contractor,
except as specified. The bill would define a labor contractor as an
individual or entity that supplies workers, either with or without a
contract, to a client employer to perform labor or services within
the client employer's usual course of business and would except from
this definition specified nonprofit, labor, and motion picture
payroll services organizations. The bill would specify that it does
not prohibit client employers and labor contractors from mutually
contracting for otherwise lawful remedies for violations of its
provisions by the other party. The bill would require a client
employer or labor contractor to provide to a requesting enforcement
agency or department, and make available for copying, information
within its possession, custody, or control required to verify
compliance with applicable state laws. The bill would authorize the
Labor Commissioner, the Division of Occupational Safety and Health,
and the Employment Development Department to adopt necessary
regulations and rules to administer and enforce the bill's
provisions. The bill would provide that waiver of its provisions is
contrary to public policy, void, and unenforceable.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 2810.3 is added to the Labor Code, to read:
   2810.3.  (a) As used in this section:
   (1) "Client employer" means a business entity, regardless of its
form, that obtains or is provided workers to perform labor or
services within its usual course of business from a labor contractor.
"Client employer" does not include a business entity with a
workforce of less than 25 workers, including those hired directly by
the client employer and those obtained from, or provided by, any
labor contractor.  "Client employer" does not include the state
or any political subdivision of the state, including any c  
ity, county, city and county, or special district. 
   (2) "Labor contractor" means an individual or entity that
supplies, either with or without a contract, a client employer with
workers to perform labor or services within the client employer's
usual course of business. "Labor contractor" does not include any of
the following:
   (A) A bona fide nonprofit, community-based organization that
provides services to low-wage workers.
   (B) A bona fide labor organization or apprenticeship program or
hiring hall operated pursuant to a collective bargaining agreement.
   (C) A motion picture payroll services company as defined in
subparagraph (A) of paragraph (4) of subdivision (f) of Section 679
of the Unemployment Insurance Code.
   (3) "Wages" has the same meaning provided by Section 200 and all
sums payable to an employee or the state based upon any failure to
pay wages, as provided by law.
   (4) "Worker" does not include an employee who is exempt from the
payment of an overtime rate of compensation for executive,
administrative, and professional employees pursuant to wage orders by
the Industrial Welfare Commission described in Section 515.
   (5) "Usual course of business" means the regular and customary
work of a business, performed within or upon the premises or worksite
of the client employer.
   (b) A client employer shall share with a labor contractor all
civil legal responsibility and civil liability for the following:
   (1) The payment of wages to workers provided by a labor
contractor.
   (2) The failure to report and pay all required employer
contributions, worker contributions, and personal income tax
withholdings as required by the Unemployment Insurance Code.
   (3) Failure to secure valid workers' compensation coverage as
required by Section 3700.
   (c) A client employer shall not shift to the labor contractor any
legal duties or liabilities under the provisions of Division 5
(commencing with Section 6300) with respect to workers supplied by
the labor contractor.
   (d) The provisions of subdivisions (b) and (c) are in addition to,
and shall be supplemental of, any other theories of liability or
requirement established by statute or common law.
   (e) This section does not prohibit a client employer from
establishing, exercising, or enforcing by contract any otherwise
lawful remedies against a labor contractor for liability created by
acts of a labor contractor.
   (f) This section does not prohibit a labor contractor from
establishing, exercising, or enforcing by contract any otherwise
lawful remedies against a client employer for liability created by
acts of a client employer.
   (g) Upon request by a state enforcement agency or department, a
client employer or a labor contractor shall provide to the agency or
department any information within its possession, custody, or control
required to verify compliance with applicable state laws. Upon
request, these records shall be made available promptly for
inspection, and the state agency or department shall be permitted to
copy them. This subdivision does not require the disclosure of
information that is not otherwise required to be disclosed by
employers upon request by a state enforcement agency or department.
   (h) The Labor Commissioner may adopt regulations and rules of
practice and procedure necessary to administer and enforce the
provisions of subdivisions (b) and (g) that are under his or her
jurisdiction.
   (i) The Division of Occupational Safety and Health may adopt
regulations and rules of practice and procedure necessary to
administer and enforce the provisions of subdivisions (c) and (g)
that are under its jurisdiction.
   (j) The Employment Development Department may adopt regulations
and rules of practice and procedure necessary to administer and
enforce the provisions of subdivisions (b) and (g) that are under its
jurisdiction.
   (k) A waiver of this section is contrary to public policy, and is
void and unenforceable.
   (l) This section shall not be interpreted to impose individual
liability on a homeowner for labor or services received at the home
or the owner of a home-based business for labor or services received
at the home.
   (m) This section shall not be interpreted to impose liability on a
client employer for the use of a bona fide independent contractor or
to change the definition of independent contractor.