BILL ANALYSIS Ó
SB 168
Page 1
SENATE THIRD READING
SB 168 (Monning)
As Amended August 5, 2013
Majority vote
SENATE VOTE :21-11
LABOR & EMPLOYMENT 5-2 APPROPRIATIONS 12-5
-----------------------------------------------------------------
|Ayes:|Roger Hernández, Alejo, |Ayes:|Gatto, Bocanegra, |
| |Chau, Gomez, Holden | |Bradford, |
| | | |Ian Calderon, Campos, |
| | | |Eggman, Gomez, Hall, |
| | | |Holden, Pan, Quirk, Weber |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Morrell, Gorell |Nays:|Harkey, Bigelow, |
| | | |Donnelly, Linder, Wagner |
| | | | |
-----------------------------------------------------------------
SUMMARY : Establishes successor liability for farm labor
contractors (FLCs) as specified. Specifically, this bill :
1)Provides that a FLC successor to any predecessor FLC that owed
wages or penalties (regardless of whether the predecessor FLC
was licensed or not) is liable for those wages and penalties
if the successor FLC meets one or more of the following
criteria:
a) The FLC uses substantially the same facilities or
workforce to offer substantially the same services as the
predecessor FLC.
b) The FLC shares in the ownership, management, control of
the workforce, or interrelations of business operations
with the predecessor FLC.
c) The FLC employs in a managerial capacity any person who
directly or indirectly controlled the wages, hours, or
working conditions of the employees owed wages or penalties
by the predecessor FLC.
d) The FLC is an immediate family member of any owner,
SB 168
Page 2
partner, officer, licensee, or director of the predecessor
FLC or of any person who had a financial interest in the
predecessor FLC.
2)Provides that an FLC that has operated with a valid license
for at least the preceding three years shall have an
affirmative defense to liability for using substantially the
same workforce, if all of the following apply:
a) The individuals in the workforce were not referred or
supplied for employment by the predecessor FLC.
b) The licensed FLC asserting the defense has not had any
interest in, or connection with, the operation, ownership,
management, or control of the business of the predecessor
FLC within the preceding three years.
c) The licensed FLC asserting the defense has not been
determined to have violated any provision of the Labor Code
within the preceding three years.
EXISTING LAW requires FLCs to be licensed by the Labor
Commissioner and to comply with specified employment laws.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, this bill will result in minor and absorbable costs
to the Department of Industrial Relations.
COMMENTS : This bill seeks to hold a successor to a licensed or
unlicensed FLC liable for the owed wages or penalties of the
predecessor's former employees if they meet specified criteria.
This legislation is patterned after similar successor liability
provisions applicable to the garment manufacturing and car wash
industries.
The sponsor of this measure, the California Rural Legal
Assistance Foundation (CRLA), believes
that this bill would prevent licensed or unlicensed FLCs from
engaging in wage theft. According
to CRLA, there have been numerous instances where employees
attempt to recover their unpaid
wages and applicable penalties for non-payment of wages through
the Labor Commissioner and
find that the offending FLC has gone out of business. However,
SB 168
Page 3
CRLA contends that the FLC
has not really gone out of business, but instead reorganized
with family members or former
associate and nominally running the business under a different
(or new) FLC license and name.
The sponsors specifically point out the experience of one family
for which CRLA is trying to
collect lost wages but the FLC has reorganized no less than six
times - each time with a different
name and different family member or associate holding the
license.
Opponents, including the California Chamber of Commerce, oppose
this bill and argue that given the ambiguity of the term
"successor," the bill could unfairly impose wage and hour
liability on entities and individuals who had no control,
connection, or ability to affect the working conditions and
payment of wages to the employees whom are owed. They contend
that the common law definition of a "bona fide successor"
requires a stronger connection between the predecessor and
subsequent employer before imposing liability onto the
successor.
Analysis Prepared by : Ben Ebbink / L. & E. / (916) 319-2091
FN: 0001649