Amended in Assembly September 4, 2013

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 begin insert or induces a violation of end insert 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 change the definition of a foreign labor contractor to mean a person who performs foreign labor contracting activity, as defined, and would 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 begin insert , and would authorize end insert begin insert the commissioner to adopt regulations or policies and procedures to implement these provisions end insert . The bill would prohibit a person from knowingly 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 begin insert knowingly end insert using the services of foreign labor contractors to obtain foreign workers to disclose specified information to the commissioner.

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 foreign labor contracting activities. 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 begin insert provided to and end insert 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, 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 bond deposited with the commissioner. The bill would begin delete provide for the end delete begin insert exempt a person from end insert joint and several liability begin delete of end delete begin insert for an act or omission by a end insert foreign labor begin delete contractors and persons end delete begin insert contractor if the person is end insert using begin delete the end delete begin insert a registered end insert foreign labor begin delete contractors’ end delete begin insert contractor’s end insert services begin delete if specified conditions are met. 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 end delete . begin insert The bill would also exempt a person who uses the services of a registered foreign labor contractor from misdemeanor liability for an act or omission by the foreign labor contractor. end insert 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.

begin insert

(f) It is the intent of the Legislature that the Labor Commissioner
proceed as expediently as possible in reviewing applications for
foreign labor contractor registration to ensure that workers may
come to the United States for legitimate employment without undue
delay.

end insert

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.

(b) “Foreign labor contracting activity” means begin delete recruiting,
soliciting, or related activities with respect to end delete begin insert recruiting or
soliciting for compensation end insert 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 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 begin delete use, and are provided without
the participation of any foreign labor contractor. end delete begin insert use. end insert

(c) “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 temporary
nonagricultural labor pursuant to Section 101(a)(15)(H)(ii)(b) of
the federal Immigration and Nationality Act (8 U.S.C. Sec.
1101(a)(15)(H)(ii)(b)).

(d) “Foreign labor contractor” means any person 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. “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 begin insert , or a person who
obtained and maintains full written designation from the United
States Department of State under Part 62 of Title 22 of the Code
of Federal Regulations end insert .

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 fifty-thousand-dollar ($50,000) bond.

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

(iii) For gross receipts greater than two million dollars
($2,000,000), a one-hundred-fifty-thousand-dollar ($150,000)
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 begin insert who knows or
should have known that the person is end insert using the services of a foreign
labor contractor to procure foreign workers or employees pursuant
to subdivision (b) of Section 9998.1 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:

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

(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.

(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.

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 foreign
labor contracting activities, 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 begin insert provided by the
foreign labor contractor and end insert 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.

begin delete

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

end delete

(b) The foreign labor contractor shall file the disclosure required
under subdivision (a) with the Labor Commissioner within begin delete 72
hours end delete begin insert seven business days end insert of providing it to the foreign worker.

(c) 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 foreign
labor contracting activities.

(d) A foreign worker may not be required to pay any costs or
expenses that are not customarily assessed against all workers
similarly employed in the United States. 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.

(e) Additional requirements or changes shall not be made to the
terms of the contract originally begin insert provided by the foreign labor
contractor and end insert 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 delete 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 delete begin insert A person shall not be liable under
this subdivision for any act or omission by a foreign labor
contractor engaged by the person if the foreign labor contractor
was registered with the Labor Commissioner pursuant to Section
9998.1.5 no later than the first day of engagement. 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

(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:

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

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

(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:

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

(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.

(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 delete begin insert

(d) A person shall not be jointly and severally liable for any act
or omission by a foreign labor contractor engaged by the person
if the foreign labor contractor was registered with the Labor
Commissioner pursuant to Section 9998.1.5 no later than the first
day of engagement.

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 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:

begin delete

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.

end delete begin insert

begin insert 9998.11. end insert   

The Labor Commissioner may adopt regulations or
policies and procedures to implement the provisions of this chapter.

end insert

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.