BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | SB 556| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- 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 CONTINUED SB 556 Page 2 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 CONTINUED SB 556 Page 3 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. CONTINUED SB 556 Page 4 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 CONTINUED SB 556 Page 5 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 **** END **** CONTINUED