BILL ANALYSIS Ó
SB 477
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Date of Hearing: July 2, 2014
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
SB 477 (Steinberg) - As Amended: May 1, 2014
Policy Committee: Labor Vote:6-0
Judiciary 8-0
Urgency: No State Mandated Local Program:
Yes Reimbursable: No
SUMMARY
This bill requires foreign labor contractors (FLC) to register
with the Labor Commissioner on or after July 1, 2016 and pay a
registration fee to be set by the Department of Industrial
Relations (DIR) to support the ongoing costs of the program.
Further, this bill specifies remedies and civil liability for
violations of registration and disclosure requirements.
Specifically, this bill:
1)Defines FLC to mean any person who performs foreign labor
contracting activity, including any 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 but who is authorized by the federal government to
work in the United States, including a person who engages in
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temporary nonagricultural labor pursuant to the federal
Immigration and Nationality Act, as specified.
4)Requires, on and after July 1, 2016, any person acting as a
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 FLC.
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 a FLC to disclose information to foreign workers, in
a language they can comprehend, regarding terms and conditions
of work in California.
6)Prohibits a FLC from assessing fees for employment services or
visa filing, or to pay any costs or expenses not charged
workers similarly situated.
7)Establishes a civil penalty for violations of the above
provisions of no less than $1,000 and no more than $25,000,
and also 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.
FISCAL EFFECT
The Department of Industrial Relations (DIR) estimates initial
costs of $892,000 and ongoing costs of $681,000 to implement the
provisions of the bill. These estimates represent costs to both
develop and administer the new registration program and
promulgate regulations, and to develop, operate and maintain a
database summarizing online applications and information
pertaining to registered foreign labor contractors.
This bill authorizes DIR to assess fees sufficient to support
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the cost of the program. The registration program would be
similar to the existing license program for farm labor
contractors. The author estimates there are 100,000 to 150,000
foreign workers in California. The Division of Labor Standards
Enforcement estimates that there are 963 potential FLCs required
to be registered. Based on this estimate, DIR estimates a
registration fee of roughly $900 a year to cover the cost of the
bill. The fee would increase if less FLCs enroll in the
program.
COMMENTS
1)Purpose . This bill, sponsored by the Coalition to Abolish
Slavery and Trafficking (CAST), creates a registration program
similar to the existing license program for farm labor
contractors in an attempt to prevent human trafficking and
exploitation of foreign workers in California.
The author contends some contractors 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.
According to the author, FLCs 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. 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.<1> 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.
2)Prior Legislation . SB 516 (Steinberg 2013), substantially
similar to this bill, 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 Governor Brown. The veto message read:
---------------------------
<1>Office of Immigration Statistics, 2011 Yearbook of
Immigration Statistics, U.S. Dept. of Homeland Security (Sept.
2012)
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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.
This bill seeks to address these concerns by authorizing the
Labor Commissioner to determine the sufficient registration and
filing fees to support the ongoing costs of the program.
Analysis Prepared by : Misty Feusahrens / APPR. / (916)
319-2081