BILL ANALYSIS                                                                                                                                                                                                    Ó






                 Senate Committee on Labor and Industrial Relations
                                 Ted W. Lieu, Chair

          Date of Hearing: April 24, 2013              2013-2014 Regular  
          Session                              
          Consultant: Alma Perez                       Fiscal:Yes
                                                       Urgency: No
          
                                   Bill No: SB 666
                                  Author: Steinberg
                        As Introduced/Amended: April 11, 2013
          

                                       SUBJECT
          
                              Employment: retaliation 


                                     KEY ISSUES

          Should the Legislature prohibit an employer from preventing, or  
          retaliating against, an employee for providing information to,  
          or testifying before, any public body conducting an  
          investigation, hearing, or inquiry?  

          Should a member of the State Bar be suspended, disbarred, or  
          disciplined for reporting [or threatening to report] the  
          immigration status of an employee because he/she exercises their  
          employment rights? 

          Should a business license be subject to suspension or revocation  
          when an employee attempts to exercise his/her employment rights  
          and, in reaction, the licensee threatens to retaliate [or  
          retaliates] based on their citizenship or immigration status?

          Should a corporation or limited liability company be subject to  
          a civil penalty for retaliating or taking adverse action against  
          any employee that exercises his/her employment rights? 


                                      ANALYSIS
          
           Existing state and federal law  contains provisions that define  
          unlawful discrimination and lawful employment practices by  
          employers and employment agencies to protect both prospective  
          and current employees against employment discrimination.









           
          Existing law, among other things, provides the following (Labor  
          Code §98.6):  
           
                  Prohibits an employer from discharging, or in any manner  
               discriminating against, any employee or applicant for  
               employment because he/she has engaged in prescribed  
               protected conduct relating to the enforcement of the  
               employee's or applicant's rights.  

                 Any employee that is discharged, threatened with  
               discharge, demoted, suspended, or in any other manner  
               discriminated against in the terms and conditions of his or  
               her employment because the employee engaged in any  
               protected conduct - such as making a bona fide complaint or  
               claim to the Division of Labor Standards Enforcement - is  
               entitled to reinstatement and reimbursement for lost wages  
               and work benefits. 

                 Any employer who willfully refuses to hire, promote, or  
               otherwise restore an employee or former employee who has  
               been determined to be eligible for rehiring or promotion by  
               a grievance procedure, arbitration, or hearing authorized  
               by law, is guilty of a misdemeanor.

           Regarding employee sharing of information with government  
          entities, existing law:
           (Labor Code§1102.5)  
                  Specifies that an employer may not make, adopt, or  
               enforce any rule, regulation, or policy preventing an  
               employee from disclosing information to a government or law  
               enforcement agency, where he/she has reasonable cause to  
               believe that the information discloses a violation or  
               noncompliance with state or federal law.  

                 Prohibits and employer from retaliating against an  
               employee for disclosing this type of information to a  
               government or law enforcement agency. 

                 Under existing law, in addition to other penalties, an  
               employer that is a corporation or limited liability company  
               is liable for a civil penalty not exceeding $10,000 for  
          Hearing Date:  April 24, 2013                            SB 666  
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               each violation of this section.

                 However, these provisions do not apply to rules,  
               regulations, or policies implementing the confidentiality  
               of the lawyer-client privilege, the physician-patient  
               privilege, or trade secret information.
           
          The existing Fair Employment and Housing Act (FEHA)  prohibits  
          harassment and discrimination in employment because of race,  
          color, religion, sex, sexual orientation, marital status,  
          national origin, ancestry, mental and physical disability,  
          medical condition, age (40 and above), pregnancy, denial of  
          medical and family care leave, or pregnancy disability leave  
          and/or retaliation for protesting illegal discrimination related  
          to one of these categories. (Government Code §12940, 12945,  
          12945.2)

           Under existing California law  , all protections, rights, and  
          remedies available under state law, except any reinstatement  
          remedy prohibited by federal law, are available to all  
          individuals regardless of immigration status who have applied  
          for employment, or who are or have been employed in the state.   
          In addition, for purposes of enforcing state labor and  
          employment laws, a person's immigration status is irrelevant to  
          the issue of liability or in proceedings, where no inquiry is  
          permitted into a person's immigration status except where the  
          person seeking the inquiry has shown, by clear and convincing  
          evidence, that the inquiry is necessary in order to comply with  
          federal immigration law.  (Labor Code §1171.5; Civic Code §3339;  
          Health and Safety Code §24000; Government Code §7285) 

           Existing law establishes grounds for suspension or revocation of  
          certain business and professional licenses.

           Under the existing  State Bar Act, specific causes are  
          established for the disbarment or suspension of a member of the  
          State Bar.

           
            This Bill  would strengthen labor law protections against threats  
          and intimidation by employers, or any person acting on behalf of  
          the employer, for employees who engage in protected activity.  
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           Specifically, this bill would:
           
             1.   Prohibit any person acting on behalf of the employer  
               [current law already prohibits employers] from making,  
               adopting, or enforcing any rule, regulation, or policy  
               preventing an employee from disclosing information to a  
               government or law enforcement agency.

             2.   Prohibit an employer or any person acting on behalf of  
               the employer from preventing, or retaliating against, an  
               employee for providing information to [or testifying  
               before] any public body conducting an investigation,  
               hearing, or inquiry.  

             3.   Prohibit an employer from retaliating or taking adverse  
               action against [current law protects against discharge or  
               discrimination] any employee or applicant for employment  
               because he/she has engaged in protected conduct (such as  
               rights under the jurisdiction of the Labor Commissioner). 

                  o         The bill would expand the protected conduct to  
                    include a written or oral complaint by an employee  
                    that he or she is owed unpaid wages. 

                  o         The bill would subject an employer that is a  
                    corporation or limited liability company to a civil  
                    penalty of up to $10,000 per violation of these  
                    provisions.

             1.   Make it a cause for suspension, disbarment, or other  
               discipline for any member of the State Bar to report, or  
               threaten to report, the immigration status of a witness or  
               party to a civil or administrative action -or his or her  
               family member- to a federal, state, or local agency because  
               the witness or party exercises a right related to his or  
               her employment. 

             2.   Specify that a business license is subject to suspension  
               or revocation if a current, former, or prospective employee  
               of the licensee attempts to exercise a right related to  
               his/her employment or any terms, conditions, or benefits  
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               protected by state law and, in reaction, the licensee  
               threatens to retaliate or retaliates based on the  
               employee's citizenship or immigration status.

             3.   Provide that it is not necessary for an individual to  
               exhaust administrative remedies or procedures in order to  
               bring a civil action under Labor Code, unless the code  
               section under which the action is brought expressly  
               requires exhaustion.

             4.   Specify that reporting [or threatening to report] an  
               employee's, former employee's, or prospective employee's  
               citizenship or immigration status, or that of his/her  
               family member, to a federal, state, or local agency because  
               he/she exercises a protected right would constitute an  
               adverse action for purposes of establishing a violation of  
               the designated right. 


                                      COMMENTS


          1.  Hiring Process - Federal Law: 

            Under existing law, it is illegal for a person or other entity  
            to "knowingly" hire, recruit, or refer for employment an  
            unauthorized individual or any individual without complying  
            with specified employment verification procedures. Among other  
            things, the law requires employers to verify that every new  
            hire is either a U.S. citizen or authorized to work in the  
            United States.  All employers are required to have new  
            employees complete form I-9, Employment Eligibility  
            Verification, upon hire.  New employees, within three days of  
            being hired, must show their employers documentation  
            establishing identity and eligibility to work in the U.S. 

            The E-Verify Program is an internet-based system, operated by  
            the U.S. Citizenship and Immigration Service in partnership  
            with the Social Security Administration, which enables  
            participating employers to use the program, on a voluntary  
            basis, to verify that the employees they hire are authorized  
            to work in the U.S.  The effectiveness of E-Verify, however,  
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            has been the subject of concern for many including the U.S.  
            Government Accountability Office (GAO).  A 2010 GAO report,  
            titled "Employment Verification: Federal Agencies Have Taken  
            Steps to Improve E-Verify, but Significant Challenges Remain,"  
            found that the system still faces challenges, including the  
            rate of tentative non-confirmation letters (TNCs) that may  
            occur because of an employee's failure to update his/her  
            nationalization status in SSA databases, failure to report a  
            change in his/her name to SSA or an employer's error in  
            entering the employee's data into the system.  The GAO report  
            notes that of the 22,512 TNCs resulting from name mismatches  
            in 2009; approximately 76 percent were for citizens and  
            approximately 24 percent for noncitizens.  

            Both state and federal law contain various provisions  
            prohibiting employment discrimination on different bases,  
            including, but not limited to, the race, color, sex, religion,  
            or marital status of a person.  In addition, existing federal  
            law pertaining to E-Verify specifies that, among other things,  
            employers may not use E-Verify to discriminate against any job  
            applicant or new hire on the basis of his/her national origin,  
            citizenship, or immigration status; employers may not use the  
            system to pre-screen applicants for employment; employers may  
            not verify newly hired employees selectively; and employers  
            cannot take any adverse action against an employee based upon  
            E-Verify unless the program issues a Final Non-confirmation.




          2.  Background on California's Immigrant Workforce:

            Immigrants comprise a growing part of the United States labor  
            force.  Immigrant workers, both documented and undocumented,  
            are a significant presence in California's workplace and  
            economy. According to a National Employment Law Project (NELP)  
            report, in 2010, 23.1 million foreign-born persons  
            participated in the civilian labor force. Of these workers,  
            5.2 percent (about eight million) form part of the U.S.  
            undocumented labor force.  An estimated 2.6 million  
            undocumented immigrants reside in California- approximately  
            seven percent of the State's total population and one-fourth  
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            of the population of undocumented immigrants nationwide.   
            Almost one in every ten workers in California is undocumented.  
             ("Workers' Rights on ICE: How Immigration Reform Can Stop  
            Retaliation and Advance Labor Rights," NELP, February 2013) 

            Most undocumented immigrants work in traditionally low-wage  
            occupations such as agriculture, construction, manufacturing,  
            and service industries, where workers face the greatest risk  
            for exploitation and are more likely to experience violations  
            of wage and hour laws. A landmark study of low-wage workers in  
            Los Angeles ("Wage Theft and Workplace Violations in LA: The  
            Failure of Employment and Labor Law for Low-Wage Workers,"  
            UCLA 2010) found that almost 76 percent of undocumented  
            workers had worked off-the-clock without pay and over 85  
            percent had not received overtime pay. The study also found  
            that undocumented workers experienced these violations at  
            rates higher than their native-born counterparts.  Moreover,  
            immigrant workers are disproportionately likely to be injured  
            or killed on the job.  

            The NELP report found that employers and their agents have far  
            too frequently shown that they will use immigration status as  
            a tool against worker exercising their employment rights. The  
            report offers several examples, including one in which the  
            Labor Commissioner found that a San Jose, California employer  
            owed an immigrant worker $50,000 for unpaid wages. Upset with  
            the ruling, the employer harassed the worker in his home and  
            threatened to report him to immigration.

          3.  Need for this bill?

            California's labor market, although improving at a 9.4  
            unemployment rate, remains weak.  According to the National  
            Employment Law Project, three unemployed workers compete for  
            every available job in the United States. Some worker  
            advocates have argued that this imbalance has given employers  
            an advantage at setting the terms and conditions of employment  
            - even if these violate employee rights. The reports  
            highlighted above have found that this is especially the case  
            in low-wage industries where workplace abuse is rampant. 

            California has made it clear that "all protections, rights,  
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            and remedies available under state law, except any  
            reinstatement remedy prohibited by federal law, are available  
            to all individuals regardless of immigration status who have  
            applied for employment, or who are or who have been employed,  
            in this state." (Labor Code §1171.5; Civic Code §3339; Health  
            and Safety Code §24000; Government Code §7285)

            While fear and threats of job loss have an especially serious  
            consequence in this job market, an employer's threat to alert  
            immigration or local law enforcement of an immigrant worker's  
            legal status in the United States carries added force.  And  
            although our state and national labor and employment laws  
            protect undocumented workers - just like any other worker -  
            against abuse, the reality is that our workers continue to  
            suffer at the hands of unscrupulous employers.  

            This bill is necessary to strengthen the retaliation laws that  
            currently protect all workers while emphasizing that reports  
            or threats against a worker based on his or her immigration  
            status are not acceptable and will place the employer, or  
            his/her representative, at risk of incurring civil penalties,  
            potential loss of their business license or, if an attorney,  
            disbarment. By incorporating these provisions into current  
            law, this bill would ensure adequate protections are in place  
            against retaliation or threats allowing all workers -  
            regardless of immigration status - to exercise their  
            employment rights without fear. 

          4.  Proponent Arguments  :
            
            According to the author, there are countless examples of  
            immigrant workers attempting to exercise their employment  
            rights only to have their employer threaten to report them or  
            actually report them or their family members to immigration or  
            law enforcement under false charges. The reality, proponents  
            argue, is that immigration-related retaliation and threats  
            undermine workers' rights for all workers. Those who might be  
            willing to act as whistleblowers and expose unfair and illegal  
            treatment worry they will be the cause of serious harm to  
            their co-workers for calling attention to abuses.  Meanwhile,  
            employers who are following the law are at a competitive  
            disadvantage against those that exploit workers. 
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            Additionally, proponents argue that unscrupulous attorneys  
            representing these law-breaking employers have also used these  
            immigration related threats to keep people from testifying or  
            showing up to depositions in support of workers trying to  
            enforce their rights.  Proponents argue that our current  
            statutory scheme does little to deter a law-breaking business  
            from using the immigration status of the worker, co-worker, or  
            family member to create an atmosphere of fear that prevents  
            workers from demanding their rights in the workplace.  They  
            argue that this bill is needed to empower workers to exercise  
            their rights under California law without fear that employers  
            will retaliate by reporting their immigration status or that  
            of their family members to government officials. Proponents  
            contend that this bill will not only deter unscrupulous  
            employers from violating the rights of immigrant workers, but  
            will also lift the veil of silence in the workplace.  

            Overall, proponents argue that the state has both a right and  
            an obligation to protect workers and to ensure that basic  
            labor laws can be enforced. Employers who engage in these  
            forms of retaliation must be held accountable. They argue that  
            this bill will clarify, strengthen and expand existing  
            retaliation statutes to better address the realities of  
            workplace retaliation, especially as it affects immigrant  
            workers. 




          5.  Opponent Arguments  :

            Opponents argue that this bill would subject employers to  
            significant penalties, loss of their business license, and  
            costly litigation for complying with federal law, as well as  
            circumventing the exhaustion of administrative remedies under  
            the Fair Employment and Housing Act ("FEHA").  They argue that  
            currently, the federal Immigration and Control Act of 1968  
            (ICRA) precludes any employer from knowingly hiring or  
            continuing to employ an individual that is not authorized to  
            work in the United States.  An employer that violates this  
            provision is subject to hefty penalties and may be subject to  
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            criminal sanctions.  ICRA also prevents an employer from  
            discriminating against an employee who provides valid  
            documentation that he/she is authorized to work in the United  
            States. 

            According to opponents, this bill exposes employers to  
            significant fines, costly litigation, and loss of their  
            business license if the employer complies with federal law and  
            terminates or refuses to hire an employee it discovers is  
            unauthorized to work in the U.S.  They argue that with this  
            bill, if an employer learns through the I-9 process within  
            three days of hire that the individual is not eligible to work  
            and terminates him/her as a result as required by federal law;  
            the employer could lose its business license.  Additionally,  
            that same employer would also be exposed to costly litigation  
            under the Private Attorney General Act ("PAGA"). They also  
            argue that this bill would add a potential $10,000 statutory  
            penalty against an employer who allegedly retaliates against  
            an employee that files a PAGA claim, thereby layering the  
            potential penalties against employers simply complying with  
            federal law.  

            Additionally, opponents are also concerned regarding the  
            provision in the bill which extends PAGA to include  
            retaliation/discrimination claims that are generally pursued  
            through FEHA and subject to the exhaustion of administrative  
            remedies.  Specifically, instead of filing a retaliation claim  
            through FEHA based upon race or national origin, this bill  
            would allow an employee to side step the exhaustion of  
            administrative remedies that FEHA requires and pursue a PAGA  
            claim for retaliation that allows the employee to obtain  
            statutory penalties, as referenced above, as well as employee  
            only attorney's fees.  They believe that discrimination and  
            retaliation type claims that are based on a protected class  
            should be mandated to comply with the administrative process  
            first by submitting such claims to the Department of Fair  
            Employment and Housing ("DFEH") for review.  

          6.  Double Referral  :

            This bill has been double referred and, if approved by this  
            committee, it will be sent to the Senate Judiciary Committee  
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            for a hearing. 
         
          7.  Prior or Related Legislation  :

            AB 263 (R. Hernandez) of 2013: Pending before Assembly  
            Judiciary Committee 
            AB 263 is very similar to this bill and would, among other  
            things, prohibit an employer from retaliating or taking  
            adverse action against an employee or applicant because he/she  
            engaged in a protected activity.  


            AB 1236 (Fong) of 2011: Chaptered  
            AB 1236 enacted the Employment Acceleration Act to prohibit  
            the state, or a city, county, city and county, or special  
            district, from requiring an employer to use an electronic  
            employment verification system except when required by federal  
            law or as a condition of receiving federal funds.  
          
            AB 1288 (Fong) of 2009 and AB 2076 (Fuentes) were almost  
            identical to AB 1236 dealing with electronic employment  
            verification systems.  


                                       SUPPORT
          
          California Labor Federation - Sponsor
          California Employment Lawyers Association 
          California Immigrant Policy Center
          California Rural Legal Assistance Foundation 
          Mexican American Legal Defense and Educational Fund  
          National Employment Law Project
          Service Employees International Union California
          United Farm Workers
          
                                     OPPOSITION
          
          California Chamber of Commerce  




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          Hearing Date:  April 24, 2013                            SB 666  
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