Amended in Assembly August 20, 2013

Amended in Assembly August 5, 2013

Amended in Senate May 7, 2013

Amended in Senate April 1, 2013

Senate Bill No. 516

Introduced by Senator Steinberg

(Coauthors: Senators Leno and Lieu)

February 21, 2013

An act to amend Sections 9998.1, 9998.6, and 9998.8 of, to add Sections 9998.1.5, 9998.2.5, 9998.10, and 9998.11 to, and to repeal and add Section 9998.2 of, the Business and Professions Code, relating to foreign labor contractors.

LEGISLATIVE COUNSEL’S DIGEST

SB 516, as amended, Steinberg. Foreign labor contractors: registration.

Existing federal law permits certain aliens to engage in employment in the United States under specified conditions. Existing state law regulates the services of foreign labor contractors, as defined, with regard to contracts, recruitment procedures and representations, and information as to terms and conditions of employment. Existing law provides that any person who violates the latter provisions is guilty of a misdemeanor. Existing law also permits any person aggrieved by a violation of these provisions to bring an action for injunctive relief or damages, or both, and authorizes recovery of damages, costs, and reasonable attorney’s fees, in an amount not less than $500, if the aggrieved person prevails on the action.

Under existing state law, the Division of Labor Standards Enforcement in the Department of Industrial Relations, under the direction of the Labor Commissioner, enforces and administers the licensing and supervision of farm labor contractors, as defined.

This bill would begin insert change the definition of a foreign labor contractor to mean a person who performs foreign labor contracting activity, as defined, and would end insert require a foreign labor contractor to register with the Labor Commissioner and pay a specified fee, upon satisfying specified conditions. The bill would require the commissioner to enforce and administer the registration and supervision of foreign labor contractors. The bill would prohibit a person from begin insert knowingly end insert entering into an agreement for the services of a foreign labor contractor that is not registered with the commissioner. The bill would also require foreign labor contractors to disclose specified information and deposit with the commissioner a surety bond in a specified amount, for payment of any amount adjudicated against the foreign labor contractor, as a condition of registration, as specified. The bill would further require persons using the services of foreign labor contractors to obtain foreign workers to disclose specified information begin delete and deposit with the commissioner a surety bond in a specified amount, for payment of any amount adjudicated against that person, as specified end delete begin insert to the commissioner end insert .

The bill would require a foreign labor contractor to disclose in writing to each foreign worker who is recruited for employment certain information, as specified. The bill would prohibit a foreign labor contractor and its agent from assessing a fee or cost to a foreign worker for begin delete employment services, as defined end delete begin insert foreign labor contracting activities end insert . The bill would also prohibit charging a foreign worker with any costs or expenses not customarily assessed against similarly situated workers, and would limit the amount of housing costs charged to the foreign worker to the market rate for similar housing. The bill would prohibit requiring a foreign worker to pay any costs or expenses prior to commencement of work. The bill would prohibit additional requirements or changes to the terms of the contract originally signed by the foreign worker, unless the foreign worker is provided at least 48 hours to review and consider the additional requirements or changes, and would require the specific consent of the foreign worker, as provided, to each additional requirement or change.

The bill would authorize a civil penalty for violations of these provisions, begin delete and end delete would authorize the commissioner or a person aggrieved by a violation of these provisions to bring an action for injunctive relief or damages, or both, and would authorize recovery of damages, costs, and reasonable attorney’s fees, as specified, including enforcement of liability against the begin delete bonds end delete begin insert bond end insert deposited with the commissioner. The bill would provide for the joint and several liability of foreign labor contractors and persons using the foreign labor contractors’ services begin insert if specified conditions are met end insert . The bill would further authorize a person who, upon information and belief, claims a violation of these provisions has been committed to bring a civil action for injunctive relief on behalf of the general public and, upon prevailing, recover reasonable attorney’s fees and costs. Because this bill would expand the scope of the provisions regulating foreign labor contractors, a violation of which is a misdemeanor, this bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: yes.

The people of the State of California do enact as follows:

SECTION 1.  

The Legislature finds and declares all of the
following:

(a) Foreign labor contractors are increasingly relied upon to
facilitate the movement of labor from one country to another.
California is the leading destination state in the United States for
temporary foreign workers. As of January 2011, there were 130,000
temporary foreign workers in California.

(b) While many foreign labor contractors behave ethically and
are engaged in lawful conduct, some foreign labor contractors are
often complicit with, or are directly involved in, the illegal
trafficking of foreign workers.

(c) Unscrupulous foreign labor contractors often charge
exorbitant fees for their services, force foreign workers into debt
bondage, falsify documents, and deceive foreign workers about
the terms and conditions of work, thereby increasing their
vulnerability to human trafficking.

(d) The incidence of known human trafficking cases involving
foreign labor recruiters is increasing dramatically in the United
States. Stricter regulation of foreign labor contractors will ensure
the integrity of the Californian economy, which is undermined
when unregulated persons conspire to fraudulently deceive foreign
workers about the terms and conditions of work.

(e) California already regulates farm labor contractors through
a comprehensive licensing system and provides some oversight
of the activities of foreign labor contractors. This bill expands
regulation of the activities of foreign labor contractors by the
following:

(1) Requiring foreign labor contractors to register with the
appropriate state agency.

(2) Requiring disclosure of the use of foreign labor contractors,
and their agents, by persons seeking to employ foreign workers.

(3) Imposing penalties on a person using an unregistered foreign
labor contractor to obtain foreign workers or employees.

(4) Expanding the remedies available to foreign workers
aggrieved by the actions of foreign labor contractors and those
acting in concert with them.

SEC. 2.  

Section 9998.1 of the Business and Professions Code
is amended to read:

9998.1.  

The following definitions are applicable to this chapter:

(a) “Person” includes any natural person, company, firm,
partnership or joint venture, association, corporation, limited
liability company, or sole proprietorship.

begin delete

(b) “Compensation” means all forms of remuneration or
consideration for the provision of employment services to foreign
workers by a foreign labor contractor.

(c) “Employment services” includes, but is not limited to,
procuring employment, marketing labor, processing visa
applications, or otherwise arranging the employment or
transportation, housing, and other living accommodations for
foreign workers either on behalf of those foreign workers or on
behalf of another person, including services performed outside the
United States. “Employment services” does

end delete

begin insert (b) end insert begin insert   end insert begin insert “Foreign labor contracting activity” means recruiting,
soliciting, or related activities with respect to a foreign worker
who resides outside of the United States in furtherance of that
worker’s employment in California, including when that activity
occurs wholly outside the United States. “Foreign labor
contracting activity” does end insert 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.

begin delete

(d)

end delete

begin insert (c) end insert  “Foreign worker” means any person seeking employment
who is not a United States citizen begin insert or permanent resident end insert 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 Section 101(a)(15)(H)(ii)(b) of
the federal Immigration and Nationality Act (8 U.S.C. begin insert Sec. end insert
1101(a)(15)(H)(ii)(b)).

begin delete

(e)

end delete

begin insert (d) end insert  “Foreign labor contractor” means any person begin delete who for
compensation agrees to assist in securing or who actually secures
for or provides employment services to foreign workers end delete begin insert who
performs foreign labor contracting activity, including any person
who performs foreign labor contracting activity wholly outside
the United States, except that the term does not include any entity
of federal, state, or local government end insert . “Foreign labor contractor”
does not include a person licensed by the Labor Commissioner as
a talent agency under Chapter 4 (commencing with Section 1700)
of Part 6 of Division 2 of the Labor Code.

SEC. 3.  

Section 9998.1.5 is added to the Business and
Professions Code, to read:

9998.1.5.  

(a) On and after July 1, 2015, a person acting as a
foreign labor contractor shall register with the Labor Commissioner
in accordance with the terms and procedures for registration
established by the commissioner by January 1, 2015. On and after
August 1, 2015, the commissioner shall post on its Internet Web
site the names and contact information for all registered foreign
labor contractors and a list of the names and contact information
for any foreign labor contractors denied renewal or registration.

(b) 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:

(1) The person has executed a written application in a form
prescribed by the commissioner, subscribed and sworn to by the
person, and containing all of the following:

(A) A statement by the person of all facts required by the
commissioner concerning the applicant’s character, competency,
responsibility, and the manner and means by which the person
proposes to conduct operations as a foreign labor contractor if
registered.

(B) The names and addresses of all persons, except bona fide
employees on stated salaries, financially interested, either as
partners, associates, or profit sharers, in the proposed operation as
a foreign labor contractor, together with the amount of their
respective interests.

(C) A declaration consenting to the designation by a court or
the commissioner as an agent available to accept service of
summons in any action against the registrant, if the registrant has
left the jurisdiction in which the action is commenced or otherwise
has become unavailable to accept service.

(2) The commissioner, after investigation, is satisfied as to the
character, competency, and responsibility of the person.

(3) (A) The person has deposited with the commissioner a
surety bond in an amount based on the size of the person’s annual
gross receipts from operations as a foreign labor contractor, as
follows:

(i) For gross receipts up to five hundred thousand dollars
($500,000), a begin delete twenty-five-thousand-dollar ($25,000) end delete begin insert end insert
begin insert fifty-thousand-dollar ($50,000) end insert bond.

(ii) For gross receipts of five hundred thousand dollars
($500,000) to two million dollars ($2,000,000), a
begin delete fifty-thousand-dollar ($50,000) end delete begin insert one-hundred-thousand-dollar
($100,000) end insert bond.

(iii) For gross receipts greater than two million dollars
($2,000,000), a begin delete seventy-five-thousand-dollar ($75,000) end delete
begin insert one-hundred-fifty-thousand-dollar ($150,000) end insert bond.

(B) If the foreign labor contractor has been the subject of a final
judgment in a year in an amount equal to that of the bond required,
that contractor shall be required to deposit an additional bond
within 60 days. The bond shall be payable to the people of the
State of California and shall be conditioned on the foreign labor
contractor complying with all the terms and provisions of this
chapter and paying all damages occasioned to any person by failure
to do so, or by any violation of this chapter, or false statements or
misrepresentations made in the registration process. The bond shall
also be payable for interest on wages and for any damages arising
from violation of applicable orders of the Industrial Welfare
Commission, and for any other monetary relief awarded to a
foreign worker as a result of a violation of law by the foreign labor
contractor.

(4) The person has paid to the commissioner a registration fee
of five hundred dollars ($500) plus a filing fee of ten dollars ($10).

(c) The commissioner may not register a person as a foreign
labor contractor, if the person was found by a court, the Secretary
of Labor, or the commissioner to have violated any of the following
provisions:

(1) The federal Trafficking Victims Protection Act of 2000
(Division A, Public Law 106-386), as amended.

(2) Sections 1682 to 1699, inclusive, of the Labor Code.

(3) Section 236.1 of the Penal Code.

(4) An applicable guest worker program.

SEC. 4.  

Section 9998.2 of the Business and Professions Code
is repealed.

SEC. 5.  

Section 9998.2 is added to the Business and Professions
Code, to read:

9998.2.  

(a) On and after July 1, 2015, a person using the
services of a foreign labor contractor to procure foreign workers
or employees begin insert pursuant to subdivision (b) of Section 9998.1 end insert shall
disclose this information to the Labor Commissioner in accordance
with the terms and procedures established by the commissioner
by January 1, 2015.

(b) The disclosure shall include, but is not limited to, the
following:

begin delete

(1) The names and addresses of all persons, except bona fide
employees on stated salaries, financially interested, either as
partners, associates, or profit sharers, in the person’s business
enterprise, together with the amount of their respective interests.

end delete begin insert

(1) The name, address, and contact information of the person
designated by the employer to work with a foreign labor contractor.

end insert

(2) A declaration consenting to the designation by a court of
the commissioner as an agent available to accept service of
summons in any action against the person, if the person has left
the jurisdiction in which the action is commenced or otherwise
has become unavailable to accept service.

begin delete

(3) A copy of the foreign labor contractor’s disclosure as
required under Section 9998.2.5 to all foreign workers or
employees obtained by the person through the services of the
foreign labor contractor or its agents.

(4) Information about the steps the person has taken to verify
the accuracy of the information provided in the foreign labor
contractor’s disclosure under Section 9998.2.5 and submitted under
paragraph (3).

end delete

(c) A person may not knowingly enter into an agreement for
the services of a foreign labor contractor that is not registered under
this chapter.

begin delete

(d) (1) A person using or anticipating using the services of a
foreign labor contractor to obtain workers or employees shall
deposit with the commissioner a surety bond in an amount based
on the size of the person’s annual payroll for all employees, as
follows:

(A) For payrolls up to five hundred thousand dollars ($500,000),
a twenty-five-thousand-dollar ($25,000) bond.

(B) For payrolls of five hundred thousand dollars ($500,000)
to two million dollars ($2,000,000), a fifty-thousand-dollar
($50,000) bond.

(C) For payrolls greater than two million dollars ($2,000,000),
a seventy-five-thousand-dollar ($75,000) bond.

(2) If the person has been the subject of a final judgment in a
year in an amount equal to that of the bond required, that person
shall be required to deposit an additional bond within 60 days. The
bond shall be payable to the people of the State of California and
shall be conditioned on the person complying with all the terms
and provisions of this chapter and paying all damages occasioned
to any person by failure to do so, or by any violation of this chapter,
or false statements or misrepresentations made in complying with
this section. The bond shall also be payable for interest on wages
and for any damages arising from violation of applicable orders
of the Industrial Welfare Commission, and for any other monetary
relief awarded to a foreign worker as a result of a violation of law
by the person.

end delete

SEC. 6.  

Section 9998.2.5 is added to the Business and
Professions Code, to read:

9998.2.5.  

(a) A foreign labor contractor shall ascertain and
disclose in writing to each foreign worker who is recruited for
employment in English and in the primary language of the foreign
worker being recruited, at the time of the foreign worker’s
recruitment, the following information:

(1) The identity of the employer and the identity of the person
conducting the recruiting on behalf of the employer, including any
subcontractor or agent involved in the recruiting.

(2) A signed copy of the work contract, including all assurances
and terms and conditions of employment, from the prospective
employer for whom the foreign worker is being recruited, including
the compensation to be paid, the place and period of employment,
a description of the type and nature of employment activities, any
withholdings or deductions from compensation, and any penalties
for terminating employment.

(3) The type of visa under which the foreign worker is to be
employed, the length of time the visa is valid, and the terms and
conditions under which the visa will be renewed with a clear
statement of whether the employer will secure renewal of the visa
or if renewal must be obtained by the foreign worker, and any
expenses associated with securing or renewing the visa.

(4) An itemized list of any costs or expenses to be charged to
the foreign worker, including, but not limited to, the costs of
housing or accommodation, transportation to and from the worksite,
meals, medical examinations, health care or safety equipment
costs, and any other costs, expenses, or deductions to be charged
the foreign worker.

(5) A statement, in a form specified by the Labor Commissioner,
that does each of the following:

(A) States that no foreign labor contractor, or agent or employee
of a foreign labor contractor, can lawfully assess any fee, including
visa fees, processing fees, transportation fees, legal expenses,
placement fees, and other costs to a foreign worker for begin delete employment
services end delete begin insert foreign labor contracting activities end insert , and that the employer
may bear the costs or fees for the foreign labor contractor, but that
these fees cannot be assessed to the foreign worker.

(B) Explains that no additional requirements or changes may
be made to the terms of the contract originally signed by the foreign
worker, unless the foreign worker is provided at least 48 hours to
review and consider the additional requirements or changes and
the foreign worker gives specific consent, voluntarily and without
threat of penalty, to each additional requirement or change.

(C) Describes the protections afforded the foreign worker by
this chapter and by the federal Trafficking Victims Protection Act
of 2000 (Division A, Public Law 106-386), as amended, and any
applicable guest worker program, including relevant information
about the procedure for filing a complaint under this chapter, and
the telephone number for the national human trafficking resource
center hotline.

(6) Any education or training to be provided or required,
including the nature, timing, and cost of training and the person
who will pay training costs, whether the training is a condition of
employment, continued employment, or future employment, and
whether the foreign worker will be paid or remunerated during the
training period, including the rate of pay or remuneration.

(7) Any other information that the commissioner may require
by regulation.

begin insert

(b) The foreign labor contractor shall file the disclosure
required under subdivision (a) with the Labor Commissioner within
72 hours of providing it to the foreign worker.

end insert begin delete

(b)

end delete

begin insert (c) end insert  A foreign labor contractor, or the agent, subcontractor, or
employee of a foreign labor contractor, or a person using the
services of a foreign labor contractor to obtain foreign workers or
employees, may not assess 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
begin delete employment services end delete begin insert foreign labor contracting activities end insert .

begin delete

(c)

end delete

begin insert (d) end insert  A foreign worker may not be required to pay any costs or
expenses that are not customarily assessed against all workers
similarly employed begin insert in the United States end insert . No costs or expenses shall
be required to be paid by the foreign worker prior to the
commencement of work. The amount charged for providing
housing to the foreign worker shall be limited to market rate for
similar housing.

begin delete

(d)

end delete

begin insert (e) end insert  Additional requirements or changes shall not be made to the
terms of the contract originally signed by the foreign worker, unless
the foreign worker is provided at least 48 hours to review and
consider the additional requirements or changes and the foreign
worker gives specific consent, voluntarily and without threat of
penalty, to each additional requirement or change.

SEC. 7.  

Section 9998.6 of the Business and Professions Code
is amended to read:

9998.6.  

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 the foreign
worker’s exercise of any right under this chapter.

SEC. 8.  

Section 9998.8 of the Business and Professions Code
is amended to read:

9998.8.  

(a) A person who violates this chapter or who causes
or induces another to violate this chapter 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. begin insert end insert begin insert An employer shall be not liable under this
subdivision if the employer only used services provided by a foreign
labor contractor registered with the Labor Commissioner pursuant
to Section 9998.1.5. end insert

(b) A person who violates any provision of this chapter shall
be subject to a civil penalty of no less than one thousand dollars
($1,000) and no more than twenty-five thousand dollars ($25,000)
per violation, in addition to any other civil remedies available to
the Labor Commissioner or an aggrieved person.

(c) The commissioner or a person aggrieved by a violation of
this chapter may do all of the following:

(1) Bring an action for injunctive relief against a person who
violates this chapter and, upon prevailing, recover costs and
reasonable attorney’s fees.

(2) Bring an action for damages, against a person who violates
this chapter to recover the greater of all of his or her actual damages
or five hundred dollars ($500) per employee per violation for an
initial violation, and one thousand dollars ($1,000) per employee
for each subsequent violation, and, upon prevailing in an action
brought pursuant to this section, recover costs and reasonable
attorney’s fees.

(3) Enforce the liability on the bonds required under Section
9998.1.5 begin delete or 9998.2 end delete .

begin delete

(d) Foreign labor contractors and those persons using their
services to obtain foreign workers or employees are jointly and
severally liable for violations of this chapter.

end delete begin insert

(d) (1) A person using the services of a foreign labor contractor
is jointly and severally liable for any violation of this chapter by
a foreign labor contractor unless both of the following are true:

end insert begin insert

(A) The person only used services provided by a foreign labor
contractor registered with the Labor Commissioner pursuant to
Section 9998.1.5.

end insert begin insert

(B) The person has made a good faith effort to ensure
compliance of this chapter by the foreign labor contractor.

end insert begin insert

(2) For purposes of this subdivision, “good faith effort” means
all reasonable and feasible efforts by the person using the services
of the foreign labor contractor to ensure the foreign labor
contractor has not committed any violations of this chapter. An
evaluation of a person’s good faith effort may include, but is not
limited to, the following factors:

end insert begin insert

(A) The extent to which the person has informed the foreign
labor contractor of its obligations and liabilities under this chapter.

end insert begin insert

(B) The extent to which the person has periodically reviewed
the foreign labor contractor’s recruiting and contracting practices,
including reports by foreign workers of practices that may violate
this chapter.

end insert begin insert

(C) Whether the person has obtained and reviewed copies of
disclosure statements or other documentation required to be
provided by the foreign labor contractor to the foreign worker by
this chapter.

end insert

(e) Nothing in this section shall be construed to preempt or alter
any other rights or remedies, including any causes of action,
available under any other federal or state law.

SEC. 9.  

Section 9998.10 is added to the Business and
Professions Code, to read:

9998.10.  

The Labor Commissioner and the deputies and
representatives authorized by the commissioner in writing may
take assignments of actions on the bonds required under Section
9998.1.5 begin delete or 9998.2 end delete by aggrieved persons and may prosecute the
actions on behalf of persons who, in the judgment of the
commissioner, are financially unable to employ counsel, in the
same manner that claims are prosecuted under Section 98 of the
Labor Code.

SEC. 10.  

Section 9998.11 is added to the Business and
Professions Code, to read:

9998.11.  

A person who, upon information and belief, claims
a violation of this chapter has been committed may bring a civil
action for injunctive relief on behalf of the general public and,
upon prevailing, shall recover reasonable attorney’s fees and costs.

SEC. 11.  

No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of
the Government Code, or changes the definition of a crime within
the meaning of Section 6 of Article XIII B of the California
Constitution.