BILL ANALYSIS Ó
SB 516
Page A
Date of Hearing: August 30, 2013
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Mike Gatto, Chair
SB 516 (Steinberg) - As Amended: August 20, 2013
Policy Committee: Labor and
Employment Vote: 5-0
Judiciary 7-3
Urgency: No State Mandated Local Program:
No Reimbursable: No
SUMMARY
This bill requires, on or after July 1, 2015, a person acting as
a foreign labor contractor (FLC) to register with the Labor
Commissioner (LC) in accordance with procedures established by
the LC by January 1, 2015. Specifically, this bill:
1)Defines FLC as any person who performs foreign labor
contracting activity, including a person who performs the
activity wholly outside the U.S. Specifies this term does not
apply to any entity of the federal, state, or local
government, or a person licensed by the LC as a talent agent.
2)Defines foreign labor contracting activity as recruiting,
soliciting, or related activities with respect to a foreign
worker who resides outside of the U.S. in furtherance of
employment in California, as specified.
3)Requires the LC, on or after August 1, 2015, to post on its
Internet website the names/contact information of all
registered FLC and a list of the names/contact information for
any FLC denied renewal or registration.
4)Prohibits the LC from registering a person as a FLC, including
registration renewal, until specified conditions are met
related to an application, company disclosure, an
investigation of submitted information, and ensuring the
proposed FLC has issued a surety bond in a specified amount
(depending on the size of the proposed annual gross receipts
from operation).
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5)Establishes a registration fee of $500 and a filing fee of
$10.
FISCAL EFFECT
Administrative costs, of approximately $900,000 (special fund),
to the Department of Industrial Relations (DIR) to establish a
FLC enforcement program. Of this cost, approximately $200,000
is one-time to develop a database for online registration and
renewal similar to the farm labor contractor enforcement
program. This measure establishes a registration and filing fee
to offset implementation costs. DIR estimates these fees will
only partially offset costs and the department will likely incur
annual on-going, special fund costs of approximately $450,000.
SUMMARY CONTINUED
6)Requires, on or after July 1, 2015, a person using the
services of a FLC to procure foreign workers or employers to
disclose this information to the LC in accordance with the
terms and procedures established by the LC, as specified.
7)Requires a FLC to provide the following written disclosures to
each foreign worker and file the disclosure with the LC within
72 hours of providing it to the worker:
a) Specified information - work contract (including
compensation information), visa information, and
costs/expenses charged to the worker.
b) A statement indicating no FLC can lawfully assess any
fee to a foreign worker for foreign labor contracting
activities, as specified.
No additional requirements or changes may be made to the
terms of the contract originally signed by the foreign
worker, unless the worker is provided at least 48 hours to
review and give consent to the changes, as specified.
1)Prohibits a FLC from assessing any fee, including visa fees,
to a foreign worker for foreign labor contracting activities.
Further prohibits a foreign worker from paying any costs or
expenses not customarily assessed against all similar U.S.
employed workers.
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2)Establishes a civil penalty of no less than $1,000 and no more
than $25,000 per violation of this measure. Further
authorizes the LC or a person aggrieved by a violation of this
measure to bring an action of injunctive relief and an action
of damages against a person who violates this measure, as
specified.
COMMENTS
1)Background . Existing law defines a foreign worker as 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 as defined Title 8 of the federal Immigration and
Nationality Act. Likewise, statute defines a FLC as any
person who for compensation agrees to assist in securing or
who actually secures for or provides employment services to
foreign workers
Current law 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. Statute also prohibits
a FLC 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 or places of employment.
Existing law 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
$1,000, or imprisonment in the county jail for not more than
six months, or both. Statute further allows any person
aggrieved by a violation to bring an action for injunctive
relief damages, or both.
This bill proposes to expand statute governing FLCs with the
purpose of protecting foreign workers.
2)Purpose . 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
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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.
According to the author, "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.
"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."
This bill establishes a FLC enforcement program, as specified.
3)Opposition . Opponents of this measure, including the
California Chamber of Commerce, the California Restaurant
Association, the California Hotel and Lodging Association, the
Motion Picture Association of America, TechAmerica, TechNet,
and the Silicon Valley Leadership Group, argue the definition
of foreign labor contracting activities is too broad and will
lead to the unintended consequence of harming legitimate
business that utilize foreign labor in a legal and humane way.
Specifically, they state:
"Any person or company that assists in securing or actually
secures or provides employment to foreign workers for
compensation is FLC, and as such, any employer who hires a
foreign worker would be subject to the requirements of the
--------------------------
<1>Office of Immigration Statistics, 2011 Yearbook of
Immigration Statistics, U.S. Dept. of Homeland Security (Sept.
2012)
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bill. Accordingly, this sweeping definition appears to include
employers of all foreign workers who enter the U. S.
legitimately through different types of visas. These workers
are often assisted by a variety of entities, or recruited by
the employer, all of which under this bill will be designated
as foreign labor contractors. Examples of included foreign
employees:
a) Engineers, architects, doctors, nurses, medical
specialists, and researchers.
b) International college students that come out in groups
to perform seasonal work in theme parks and resorts.
c) Hospitality workers for hotels and restaurants.
d) Actors and other professionals for movie and television
production, athletes, symphonies, ballet troupes."
The opponents of this measure further argue the issue of
regulating FLCs falls under the immigration issues currently
being debated at the federal law and this bill may supersedes
this discussion.
Analysis Prepared by : Kimberly Rodriguez / APPR. / (916)
319-2081