BILL ANALYSIS Ó
SB 477
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Date of Hearing: June 24, 2014
ASSEMBLY COMMITTEE ON JUDICIARY
Bob Wieckowski, Chair
SB 477 (Steinberg) - As Amended: May 1, 2014
SENATE VOTE : 35-0
SUBJECT : FOREIGN LABOR CONTRACTORS: REGISTRATION
KEY ISSUE : SHOULD REGULATION OF FOREIGN LABOR CONTRACTORS AND
EMPLOYERS SEEKING TO RECRUIT FOREIGN WORKERS BE SIGNIFICANTLY
STRENGTHENED IN ORDER TO BETTER PROTECT AGAINST TRAFFICKING AND
LABOR EXPLOITATION OF NON-CITIZENS AUTHORIZED TO WORK IN THE
U.S.?
SYNOPSIS
This important bill, sponsored by the Coalition to Abolish
Slavery and Trafficking (CAST), repeats an effort carried by the
author last year. Last year's measure passed this Committee but
was vetoed by the Governor who invited the author to reintroduce
the bill with an amendment addressing a fee issue. This
substantively identical bill, with the fee clarification
requested by the Governor, represents a multi-faceted approach
to try to better prevent human trafficking and exploitation of
foreign workers in California. The author and sponsor note that
workers entering the U.S. lawfully on temporary visas are
vulnerable to abuse by foreign labor contractors (FLCs) who may,
for example, make false promises of employment to workers to get
them to come to this country, and subsequently use intimidation,
threats, or violence to trap them in poor working conditions and
even enslave them. The bill is supported by a number of civil
rights and anti-trafficking advocates. There is no known
opposition.
SUMMARY : Expands registration and disclosure requirements to
regulate foreign labor contractors and the employers who use
their services, and specifies remedies and civil liability for
violations of these requirements. Specifically, this bill ,
among other things:
1)Defines "foreign labor contractor" to mean any person who
performs foreign labor contracting activity, including any
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person who performs activities wholly outside the United
States, except that the term does not include any entity of
federal, state, or local government.
2)Defines "foreign labor contracting activity" to mean
recruiting, soliciting, or related activities with respect to
a foreign worker who resides outside of the United States in
furtherance of employment in California, including when such
activity occurs wholly outside the United States. Further
clarifies that "foreign labor contracting activity" does not
include the services of an employer, or employee of an
employer, if those services are provided directly to foreign
workers solely to find workers for the employer's own use, and
are provided without the participation of any foreign labor
contractor.
3)Clarifies that "foreign worker" means any person seeking
employment who is not a United States citizen or permanent
resident (i.e. green card holders) but who is authorized by
the federal government to work in the United States, including
a person who engages in temporary nonagricultural labor
pursuant to the federal Immigration and Nationality Act, as
specified.
4)Requires, on and after July 1, 2015, any person acting as a
foreign labor contractor (FLC) to register with the Labor
Commissioner, but prohibits registration or renewal of
registration by the Commissioner until all of the following
conditions are satisfied:
a) The person has executed a written application containing
specified information.
b) The Labor Commissioner, after investigation, is
satisfied as to the character, competency, and
responsibility of the person.
c) The person has deposited a surety bond, ranging from
$50,000 to $150,000, depending on the person's annual gross
receipts from operations as a foreign labor contractor.
d) The person has paid a registration fee and a filing fee
in a total amount the Labor Commissioner determines is
sufficient to support the ongoing costs of the program.
5)Requires the Labor Commissioner, on and after August 1, 2015,
to post on its website the names and contact information of
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all registered foreign labor contractors.
6)Provides that the Labor Commissioner may not register a person
as a foreign labor contractor if the person was found to have
violated the federal Trafficking Victims Protection Act of
2000 and other specified provisions of state and federal law.
7)Prohibits a person from knowingly entering into a contract for
the services of a foreign labor contractor that is not
registered.
8)Requires, on and after July 1, 2015, a person using the
employment services of a foreign labor contractor to disclose
specified information to the Labor Commissioner, including the
name, address, and contact information of the person
designated by the employer to work with a foreign labor
contractor.
9)Requires a foreign labor contractor to disclose in writing
specified information to each foreign worker who is recruited
for employment that, among other things, identifies the
employer and recruiter, the type of visa under which the
worker is to be employed, and terms of the work contract.
10)Prohibits a foreign labor contractor or a person using the
services of a foreign labor contractor from assessing any fee
to a foreign worker for employment services, including, but
not limited to, visa fees, processing fees, transportation
fees, legal expenses, placement fees, and other costs.
11)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 or her family in
retaliation for a foreign worker's exercise of any rights
under the law.
12)Establishes a civil penalty of no less than one thousand
dollars ($1,000) and no more than twenty-five thousand dollars
($25,000) per violation of these provisions, in addition to
any other civil remedies available to the Labor Commissioner
or an aggrieved person.
13)Exempts employers from criminal liability if the employer
used services provided only by a registered foreign labor
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contractor.
14)Permits the Labor Commissioner or an aggrieved person to sue
for injunctive relief, for damages, or to enforce the
liability of surety bonds, as specified.
15)Provides that a person using the services of a FLC is jointly
and severally liable for violations by the FLC unless the
person used services provided only by a registered FLC and
made a good faith effort to ensure compliance by the FLC with
these provisions. Further specifies that "good faith effort"
means all reasonable and feasible efforts by the person using
the services of the FLC to ensure the FLC has not committed
any violations of these provisions.
16)Allows any person who, upon information and belief, claims a
violation of this chapter has been committed to bring a civil
action for injunctive relief on behalf of the general public
and, upon prevailing, to recover his reasonable attorney's
fees and costs.
EXISTING LAW :
1)Defines "foreign worker" to mean any person seeking employment
who is not a U.S. citizen but who is authorized by the federal
government to work in this country, including a person who
engages in temporary nonagricultural labor pursuant to Section
1101(a)(15)(H)(ii)(b) of Title 8 of the federal Immigration
and Nationality Act. (Business & Professions Code Section
9998.1(d). All further references are to this code unless
otherwise stated.)
2)Defines "employment services" to include procuring employment,
marketing labor, or otherwise arranging the employment or
transportation, housing, and other living accommodations for
foreign workers either on behalf of those workers or on behalf
of another party. (Section 9998.1(c).)
3)Requires every contract for the provision of employment
services to foreign workers to be written in the primary
language of the foreign worker and include all material terms
including, but not limited to, any and all compensation or
consideration to be provided to the foreign worker in exchange
for that worker's labor or services, any wages, housing,
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transportation, other living accommodations, and other
benefits which are to be provided. (Section 9998.2.)
4)Prohibits a foreign labor contractor from making, publishing,
or circulating to any person any false, fraudulent, or
misleading representation or information concerning the terms
or conditions of employment at any place of employment.
(Section 9998.3.)
5)Provides that any person who violates these provisions or who
causes or induces another to violate them is guilty of a
misdemeanor punishable by a fine of not more than one thousand
dollars ($1,000), or imprisonment in the county jail for not
more than six months, or both. Further allows any person
aggrieved by a violation to bring an action for injunctive
relief damages, or both. (Section 9998.8.)
FISCAL EFFECT : As currently in print this bill is keyed fiscal.
COMMENTS : In support of this measure, the author notes:
Foreign labor contractors are increasingly relied upon to
facilitate the migration of labor from one country to
another. California is the leading destination state in
the U.S. for temporary foreign workers with over 100,000
temporary workers annually.
While many contractors behave ethically and lawfully,
others do not. They misuse U.S. visa programs to exploit
workers, often charging exorbitant fees for their services,
forcing workers into debt bondage, falsifying documents,
and deceiving workers about the terms and conditions of
proposed employment.
Unscrupulous foreign labor contractors threaten workers
with blacklisting, discrimination, and other forms of
retaliation, including the imposition of additional fees
and violence against themselves, family members, or their
home communities, for reporting abuses or seeking to escape
their fraudulently induced servitude. Legislation is
needed to prevent human trafficking and forced labor of
foreign workers in California resulting from the
exploitative and abusive practices of foreign labor
contractors
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Currently, California law requires licensing of farm labor
contractors only. This has curtailed human
trafficking-related abuses previously prevalent in
California's agricultural industry.
Under SB 477, foreign labor contractors seeking to provide
workers to California-based employers will be required to
register with the California Department of Labor.
Employers seeking to use foreign labor contractors will be
required to use the services of registered contractors.
Foreign labor contractors will be required to provide full
and fair information to foreign workers, in a language they
understand, about the terms and conditions of work in
California. A contractor may not knowingly provide a worker
with false or misleading information. Employers using the
services of foreign labor contractors to obtain workers
will be required to report those activities.
Under the bill, no contractor could solicit a foreign
worker for a job in California in the absence of a bona
fide offer of employment. Further, a contractor could not
charge a worker a fee related to recruiting activities.
And, worker contract terms and conditions could not be
changed without adequate notice to workers and their
agreement to the changes.
Foreign labor contractors, and employers using unregistered
contractors, would be subject to civil and criminal
penalties for violations. Aggrieved workers would have
civil causes of action against both contractors and
employers to protect their interests.
This Bill Repeats A Prior Measure By the Author. The author
notes that this bill is substantively identical to his SB 516 of
2013, which was vetoed by Governor Brown. In his veto message,
Governor Brown asked that the bill be reintroduced with one
simple change to ensure that the registration and filing fees
cover the costs of the program. That change is on page 6, lines
32-34. The only other change is to the dates in the bill to
reflect that the bill would go into effect in 2015, instead of
2014.
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Background On Exploitation Of Foreign Workers. According to the
Office of Immigration Statistics within the Department of
Homeland Security, as of September 2011, there were
approximately 130,000 foreign temporary workers in California,
representing 15% of the national total and the highest subtotal
of any state (Office of Immigration Statistics, 2011 Yearbook of
Immigration Statistics, U.S. Dept. of Homeland Security (Sept.
2012), at p.4; see:
http://www.dhs.gov/sites/default/files/publications/immigration-s
tatistics/ois_ni_pe_2011.pdf). These foreign temporary workers
are persons who have lawful non-immigration status and are
authorized to work in California under various classifications
of federal work visas.
Although the Legislature passed legislation in 1988 (AB 4554
(Roybal-Allard), Ch. 1450, Stats. 1988) to address reported
abuse by recruiters of foreign workers by establishing modest
disclosure and contract requirements, proponents of this bill
contend that abusive treatment and working conditions of foreign
labor workers continues, and that the visa process itself
provides opportunities for labor recruiters to exploit foreign
workers of all visa types. Proponents cite a recent study of
labor practices with respect to foreign labor workers in which
the authors found that "regardless of visa category, employment
sector, race, gender or national origin, internationally
recruited workers face disturbingly common patterns of
recruitment abuse, including fraud, discrimination, severe
economic coercion, retaliation, blacklisting and, in some cases,
forced labor, indentured servitude, debt bondage and human
trafficking." (The American Dream Up For Sale: A Blueprint for
Ending International Labor Recruitment Abuse, The International
Labor Recruitment Working Group (Feb. 5, 2013), at p. 5.) The
authors of the report concluded that "disparate rules and
requirements for workers, employers and recruiters, as well as
lax enforcement of the regulations that do exist, allow and even
incentivize recruiters and employers to engage in abuses."
(Id.)
Illustrative Examples That Exploitation Is Not Restricted By
Race, Nationality, Or Visa Categories. The sponsor of this
bill, the Coalition to Abolish Slavery & Trafficking (CAST),
asserts that foreign workers entering California on temporary
work visas are vulnerable to exploitation and human trafficking
that can occur across all categories of race, nationality, and
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visa categories.
For example, the H2B visa is a nonimmigrant visa primarily
issued to foreign nationals to enter into the U.S. for a
temporary position for which a shortage of U.S. workers exists,
working for a specific employer for a fixed period of time.
CAST states:
In 2012, six Mexican workers were fraudulently recruited
to come to the United States to work in forestry. The
recruiter came to their small town in rural Mexico to
convince the workers to work in Northern California.
The workers were promised a good salary and free room
and board in the United States. Relying on these
promises the workers entered the U.S. on H2B visas
arranged by the recruiters and traveled to California.
However, once in the U.S., their conditions were vastly
different than promised. They were charged extremely
high deductions for room and board and were often not
paid for their labor. They were forced to live and work
in dangerous conditions, sleeping in tents in the
wilderness, living without electricity, and denied clean
drinking water. The workers were kept in terror of
their traffickers, who were armed and repeatedly
threatened to shoot and kill the workers if they did not
comply with the traffickers' demands.
Another example is the J-1 visa, which is a nonimmigrant visa
intended for individuals approved for work- and study-based
cultural exchange visitor programs, and covers a wide array of
occupations including au pairs, ski resort workers, and
amusement park workers. A high proportion of J-1 visas are
issued through the Summer Work Travel (SWT) program,
administered by the State Department. According to Freedom
Network USA:
Because of the lax oversight and the precarious
financial situation of many J-1 SWT students, numerous
instances of exploitation, and several reports of
forced labor, have arisen in the J-1 SWT context. For
example, a 2011 federal indictment charged New York
area organized crime syndicates . . . with offenses
stemming from the recruitment of women from Eastern
Europe and Russia under the J-1 SWT program to work as
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exotic dancers in the New York City area. The
indictment charged the defendants with offenses related
to visa fraud and transporting, harboring, and inducing
the illegal entry of women from Eastern Europe and
Russia under the J-1 SWT program.
Despite many recent reforms and attempts by the State
Department to address concerns, including issuance of
new regulations in May 2012, the SWT program still
requires improvements to reduce the risk of
trafficking, exploitation, and other abuses. The State
Department itself has acknowledged that, "there have
been complaints regarding job placement, work
conditions, and participant accommodations." The State
Department also addressed the potential misuse of the
visa for trafficking in the 2012 Trafficking in Persons
(TIP) Report's country profile on the United States,
stating "NGOs noted vulnerabilities in the J-1 Summer
Work Travel program that can be indicators for human
trafficking, including reports of fraudulent job
offers, inappropriate jobs, job cancellations on
arrival, and housing and transportation problems"
(Freedom Network USA, Human Trafficking and J-1 Visas
for Temporary Workers, Sept. 2012.)
REGISTERED SUPPORT / OPPOSITION :
Support
Coalition to Abolish Slavery and Trafficking (sponsor)
National Council of Jewish Women-California
Attorney General of California
Alliance to End Slavery and Trafficking
International Justice Mission
International Labor Recruitment Working Group
City and County of San Francisco, Department on the Status of
Women
American Association of University Women (AAUW)
The Association of California Commissions for Women
Opposition
None on file
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Analysis Prepared by : Kevin G. Baker / JUD. / (916) 319-2334