BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | SB 477|
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THIRD READING
Bill No: SB 477
Author: Steinberg (D)
Amended: 1/6/14
Vote: 21
SENATE APPROPRIATIONS COMMITTEE : 6-0, 1/23/14
AYES: De León, Gaines, Hill, Lara, Padilla, Steinberg
NO VOTE RECORDED: Walters
SUBJECT : Foreign labor contractors: registration
SOURCE : Coalition to Abolish Slavery and Trafficking
DIGEST : This bill requires foreign labor contractors to
register with the Labor Commissioner (Commissioner), as well as
follow additional contractual and bonding requirements, as
specified.
ANALYSIS : Existing law provides the following:
1. Every contract for the provision of employment services to
foreign workers shall be written in the primary language of
the foreign worker and shall include all material terms
including, all compensation or consideration to be provided
to the foreign worker.
2. Any foreign labor contractor who recruits or solicits
without a bona fide job order and who does not then provide
employment for the foreign worker shall pay wages to the
foreign worker at the agreed rate of pay for the job to which
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the foreign worker was being transported.
3. No foreign labor contractor shall make, publish, or
circulate any false, fraudulent, or misleading representation
or information concerning the terms or conditions of
employment at any place or places of employment.
4. No foreign labor contractor shall make promises or otherwise
induce a foreign worker to travel or accept promises of
employment by promising or providing assurances of U.S.
citizenship or permanent residency.
Existing law provides that anyone who violates any of the above
provisions is guilty of a misdemeanor punishable by a fine of
not more than $1,000, or imprisonment in the county jail for not
more than six months, or both.
Existing law provides that any person aggrieved by a violation
of this chapter may bring an action for injunctive relief or
damages, or both. If the person aggrieved prevails on the
action, this person shall recover damages, costs, and reasonable
attorney's fees, but in no case shall recovery be less than
$500.
This bill requires foreign labor contractors to register with
the Commissioner, as well as follow additional contractual and
bonding requirements, as specified. Specifically, this bill:
1. Requires, on and after July 1, 2015, any person acting as a
foreign labor contractor to register with the Commissioner.
2. Exempts from the definition of foreign labor contractor any
person licensed as a talent agency under existing law or
entities or persons that have obtained designation under
specified federal law related to work and study-based
exchange visitor programs.
3. Defines "foreign labor contracting activity" to mean
recruiting or soliciting for compensation with respect to a
foreign worker who resides outside of the U.S. in furtherance
of that worker's employment in California.
4. Specifies that "foreign labor contracting activity" does not
include the services of an employer, or employee or an
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employer, if those services are provided directly to foreign
workers solely to find workers for the employer's own use.
5. Requires the Commissioner (on and after August 1, 2015) to
post on its Web site the names and contact information for
all registered foreign labor contractors.
6. Provides that the Commissioner may not register a person to
act as a foreign labor contractor, and may not renew a
registration, until all of the following conditions are
satisfied:
A. The person has executed a written application
containing specified information.
B. The Commissioner, after investigation, is satisfied as
to the character, competency, and responsibility of the
person.
C. The person has deposited a surety bond as follows:
(1) For gross receipts up to $500,000, a $50,000
bond.
(2) For gross receipts of $500,000 to $2 million, a
$100,000 bond.
(3) For gross receipts over $2 million, a $150,000
bond.
A. The person has paid the Commissioner a registration
fee and a filing fee in a total amount the Commissioner
determines is sufficient to support the ongoing costs of
the program.
1. Provides that the Commissioner may not register a person as
a foreign labor contractor if the person was found to have
violated specified provisions of state and federal law.
2. Requires, on and after July 1, 2015, a person who knows or
should have known it is using the services of a foreign labor
contractor to disclose specified information to the
Commissioner.
3. Prohibits a person from knowingly entering into a contract
for the services of a foreign labor contractor that is not
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registered.
4. Requires a foreign labor contractor to disclose in writing
specified information to each foreign worker who is recruited
for employment.
5. Prohibits a foreign labor contractor or a person using the
services of a foreign labor contractor from assessing any
fee, including, but not limited to, visa fees, processing
fees, transportation fees, legal expenses, placement fees,
and other costs, to a foreign worker for employment services.
6. Provides that a foreign worker may not be required to pay
any costs or expenses that are not customarily assessed
against all workers similarly employed, as specified.
7. Provides that a person may not intimidate, threaten,
restrain, coerce, discharge, or in any manner discriminate
against a foreign worker or a member of his/her family in
retaliation for a foreign worker's exercise of any rights
under the law.
8. Provides that a person who violates any provision of these
requirements shall be subject to a civil penalty of not less
than $1,000 and not more than $25,000 per violation.
9. Provides that the Commissioner or an aggrieved person may
bring enforcement actions, as specified.
10.Provides that a person shall not be jointly and severally
liable shall for any act or omission by a foreign labor
contractor engaged by the person provided the foreign labor
contractor was registered no later than the first day of such
engagement.
11.Authorizes the Commissioner to adopt regulations or policies
and procedures to carry out or implement these provisions.
12.Makes related and conforming changes.
13.Makes related legislative findings and declarations.
Prior Legislation
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SB 516 (Steinberg 2013) was identical to this measure, except
that it specified a registration fee of $500. This registration
fee was determined to be insufficient to fund the ongoing costs
of the program and the bill was vetoed by the Governor. The
veto message read:
I am returning Senate Bill 516 without my signature.
This bill seeks to prevent the exploitation of foreign
workers - a worthy goal which I support. Unfortunately,
the registration and filing fees established by the bill
are insufficient to support the ongoing costs of the
proposed program. This funding shortfall would be
underwritten by the Labor Enforcement and Compliance Fund,
funded from an assessment on employers' workers'
compensation premiums. This shift in costs is inequitable
as it would result in all California employers paying a
share of the enforcement costs for the regulation of these
foreign labor contractors. I request that the Legislature
send me a bill in January where the fees generated are
sufficient to pay for the costs of the program proposed by
this measure.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
According to the Senate Appropriations Committee, DIR estimates
that it will incur first-year costs of $892,000 (special funds)
and $681,000 ongoing (special funds) to implement the provisions
of the bill. This bill includes a filing fee of $10 and a
registration fee to be set by DIR to support the ongoing costs
of the program.
SUPPORT : (Verified 1/23/14)
Coalition to Abolish Slavery and Trafficking (source)
American Association of University Women - California
Food Chain Workers Alliance
National Council of Jewish Women - California
ARGUMENTS IN SUPPORT : Proponents argue that this bill takes a
multi-prong approach to preventing human trafficking in
California by foreign labor recruiters. First, proponents note
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that foreign labor contractors will be required to provide full
and fair information to foreign workers and that employers using
the services of foreign labor contractors to obtain workers will
be required to report those activities. Proponents also note
that this bill prohibits any foreign labor contractor from
soliciting a foreign worker for a job in California in the
absence of a bona fide offer of employment. Finally proponents
also note that, under this bill, foreign labor contractors, and
employers using unregistered contractors, will be subject to
civil and criminal penalties for violations. Aggrieved workers
will have civil causes of action against both contractors and
employers to protect their rights and help prevent future cases
of exploitation.
PQ:nl 1/24/14 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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