BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                            



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                                    THIRD READING


          Bill No:  SB 556
          Author:   Corbett (D)
          Amended:  5/29/13
          Vote:     21


           SENATE JUDICIARY COMMITTEE  :  5-1, 5/7/13
          AYES:  Evans, Corbett, Jackson, Leno, Monning
          NOES:  Anderson
          NO VOTE RECORDED:  Walters

           SENATE LABOR & INDUSTRIAL RELATIONS COMMITTEE  :  4-0, 5/8/13
          AYES:  Lieu, Leno, Padilla, Yee
          NO VOTE RECORDED:  Wyland


           SUBJECT  :    Agency:  ostensible

           SOURCE  :     California Labor Federation
                      California Professional Firefighters
                      Consumer Federation of California


           DIGEST  :    This bill provides that a public agency that  
          contracts for labor or services with a contractor is jointly and  
          severally liable for any damages caused during or in connection  
          with the performance of work performed under the contract if  
          certain circumstances exist that cause a member of the public to  
          believe that the contractor or his/her employee was an agent of  
          the public agency.

           Senate Floor Amendments of 5/29/13  , specify that the provisions  
          of this bill apply only to public agencies that contract for  
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          labor or services with a contractor and specify that both are  
          jointly and severally liable for any damages caused.  Amendments  
          also specify that "public agency" does not include the state.

           ANALYSIS  :    Existing law:
           
           1.Provides numerous comprehensive requirements, rights, and  
            remedies relating to the employer-employee relationship,  
            including, but not limited to, wages and other compensation,  
            hours, workers' compensation, labor code violation actions,  
            employment contracts, and standards for working conditions.

          2.Defines "employee" to mean every person in the service of an  
            employer under any appointment or contract of hire or  
            apprenticeship, express or implied, oral or written, whether  
            lawfully or unlawfully employed, as specified.  (Labor Code  
            Sec. 3351)  But excludes specified individuals such as someone  
            who is employed by his/her parent, spouse or child.  (Labor  
            Code Sec. 3352)

          3.Defines "independent contractor" to mean any person who  
            renders service for a specified recompense for a specified  
            result, under the control of his/her principal as to the  
            result of his/her work only and not as to the means by which  
            such result is accomplished.  (Labor Code Sec.3353)  The  
            contract of employment is a contract by which one, who is  
            called the employer, engages another, who is called the  
            employee, to do something for the benefit of the employer or a  
            third person.  (Labor Code Sec. 2750)

          4.Specifies that it is unlawful for any person doing business in  
            California and advertising to consumers to make any false or  
            misleading advertising claims.  Includes claims that purport  
            to be based on factual, objective, or clinical evidence;  
            compare the product's effectiveness or safety to that of other  
            brands; or, purport to be based on any fact.  (BPC Sec. 17508)

          5.Authorizes an employer to prescribe the weight, color,  
            quality, texture, style, form and make of uniforms required to  
            be worn by his/her employees.  (Labor Code Sec. 452)
           
           This bill:

          1.Provides that a public agency that contracts for labor or  

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            services with a contractor is jointly and severally liable for  
            any damages caused during or in connection with the  
            performance of work performed under the contract if certain  
            circumstances exist that cause a member of the public to  
            believe that the contractor or his/her employee was an agent  
            of the public agency.
            Specifically, the public agency that enters into a contract  
            for labor services is held jointly and severally liable if  
            either of the following occurred:

             A.   The contractor or contractor's employee wore a uniform  
               that is substantially similar to the uniform of the public  
               agency so as to cause a member of the public to believe  
               that the contractor or contractor's employee was an agent  
               of the public agency.

             B.   The contractor or contractor's employee operated a  
               vehicle with the logo of the public agency and the vehicle  
               had an appearance that would cause a member of the public  
               to believe that the contractor or contractor's employee was  
               an agent of the public agency.

          1.Applies only to contracts entered into on or after January 1,  
            2014.

          2.Specifies that for the purposes of this bill, "public agency"  
            does not include the state.

           Background

           Under existing law, a contract of employment is a contract by  
          which one, who is called the employer, engages another, who is  
          called the employee, to do something for the benefit of the  
          employer or a third person.  Existing law and regulations set  
          forth the conditions under which a person may be classified as  
          an independent contractor, and thus not subject to many wage,  
          overtime, working conditions, and various other labor standards.  
           The Employment Development Department (EDD), the Franchise Tax  
          Board, and the federal government are the primary entities that  
          have established criteria for making a determination as to  
          whether a person may be classified as an independent contractor.  
           EDD has developed a guide, worksheets, and forms to assist  
          businesses in determining whether a worker is an employee or  
          independent contractor.

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           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  No   Local:  
           No

           SUPPORT  :   (Verified  5/29/13)

          California Labor Federation (co-source)
          California Professional Firefighters (co-source)
          Consumer Federation of California (co-source)
          California Conference Board of the Amalgamated Transit Union
          California Conference of Machinists
          California Teamsters Public Affairs Council
          Engineers and Scientists of California 
          International Longshore & Warehouse Union 
          Professional & Technical Engineers, Local 21
          UNITE HERE! 
          United Food and Commercial Workers Union, Western States Council
          Utility Workers Union of America, Local 132

           OPPOSITION  :    (Reflects prior version of the bill)

          Associated General Contractors
          Building Owners and Managers Association of California
          California Ambulance Association
          California Business Properties Association
          California Chamber of Commerce
          California Chapter of American Fence Association  
          California Employment Law Council 
          California Fence Contractor's Association 
          California Hospital Association
          California Manufacturers and Technology Association
          California Restaurant Association
          California Trucking Association
          Civil Justice Association of California
          CSAC Excess Insurance Authority
          Engineering Contractor's Association
          Flasher Barricade Association
          International Council of Shopping Centers
          International Franchise Association
          International Warehouse Logistics Association 
          Marin Builders Association
          Messenger Courier Association of America
          NAIOP of California, the Commercial Real Estate Development  
          Association

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          National Federation of Independent Business
          Personal Insurance Federation of California
          Rural County Representatives of California
          Satellite Broadcasting & Communications Association
          Western Electrical Contractors Association


          AL:ej  5/29/13   Senate Floor Analyses 

                           SUPPORT/OPPOSITION:  SEE ABOVE

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