BILL ANALYSIS Ó SB 477 Page 1 SENATE THIRD READING SB 477 (Steinberg) As Amended May 1, 2014 Majority vote SENATE VOTE :35-0 LABOR & EMPLOYMENT 6-0 JUDICIARY 8-0 ----------------------------------------------------------------- |Ayes:|Roger Hernández, Grove, |Ayes:|Wieckowski, Alejo, Chau, | | |Alejo, Chau, Holden, | |Dickinson, Garcia, | | |Ridley-Thomas | |Maienschein, Muratsuchi, | | | | |Stone | |-----+--------------------------+-----+--------------------------| | | | | | ----------------------------------------------------------------- APPROPRIATIONS 13-2 ----------------------------------------------------------------- |Ayes:|Gatto, Bocanegra, | | | | |Bradford, | | | | |Ian Calderon, Campos, | | | | |Eggman, Gomez, Holden, | | | | |Linder, Pan, Quirk, | | | | |Ridley-Thomas, Weber | | | | | | | | |-----+--------------------------+-----+--------------------------| |Nays:|Donnelly, Jones | | | | | | | | ----------------------------------------------------------------- SUMMARY : Requires foreign labor contractors to register with the Labor Commissioner, as well as follow additional contractual and bonding requirements, as specified. Specifically, this bill : 1)Requires, on and after July 1, 2016, any person acting as a foreign labor contractor to register with the Labor 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 SB 477 Page 2 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 United States 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 employer, if those services are provided directly to foreign workers solely to find workers for the employer's own use. 5)Requires the Labor Commissioner (on and after August 1, 2016) to post on its Web site the names and contact information for all registered foreign labor contractors. 6)Provides that the Labor 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 Labor 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: i) For gross receipts up to $500,000, a $50,000 bond. ii) For gross receipts of $500,000 to $2 million, a $100,000 bond. iii) For gross receipts over $2 million, a $150,000 bond. 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. 7)Provides that the Labor 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. SB 477 Page 3 8)Requires, on and after July 1, 2016, a person who knows or should have known it is using the services of a foreign labor contractor to disclose specified information to the Labor Commissioner. 9)Prohibits a person from knowingly entering into a contract for the services of a foreign labor contractor that is not registered. 10)Requires a foreign labor contractor to disclose in writing specified information to each foreign worker who is recruited for employment. 11)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. 12)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. 13)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. 14)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. 15)Provides that the Labor Commissioner or an aggrieved person may bring enforcement actions, as specified. 16)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. 17)Authorizes the Labor Commissioner to adopt regulations or SB 477 Page 4 policies and procedures to carry out or implement these provisions. 18)Makes related and conforming changes. 19)Makes related legislative findings and declarations. FISCAL EFFECT : According to the Assembly Appropriations Committee, the Department of Industrial Relations (DIR) estimates initial costs of $900,000 and ongoing costs of $700,000 to implement the provisions of this bill. This bill authorizes DIR to assess fees sufficient to support the costs of the program. COMMENTS : This bill proposes to protect vulnerable individuals from abuse and human trafficking by requiring foreign labor contractors to register with the Labor Commissioner, as well as follow additional contractual and bonding requirements. This bill is nearly identical to SB 516 (Steinberg) of 2013. However, SB 516 specified a registration fee of $500. This registration fee was determined to be insufficient to fund the ongoing costs of the program and SB 516 was vetoed by Governor Brown. Therefore, in order to address this issue, this bill specifies that the Labor Commissioner may establish a registration fee and filing fee in a total amount he or she determines is sufficient to support the ongoing costs of the program. Proponents argue that this bill takes a multi-prong approach to preventing human trafficking in California by foreign labor recruiters. First, proponents note 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 SB 477 Page 5 protect their rights and help prevent future cases of exploitation. There is no opposition on file. Analysis Prepared by : Ben Ebbink / L. & E. / (916) 319-2091 FN: 0004717