BILL ANALYSIS Ó
Senate Committee on Labor and Industrial Relations
Senator Ben Hueso, Chair
Date of Hearing: April 24, 2014 2013-2014 Regular
Session
Consultant: Gideon L. Baum Fiscal:Yes
Urgency: No
Bill No: SB 1087
Author: Monning
As Introduced/Amended: April 21, 2014
SUBJECT
Farm labor contractors.
KEY ISSUE
Should the Legislature strengthen Farm Labor Contractor
standards by, among other things, increasing bonding
requirements and raising licensure fees for Farm Labor
Contractor licensure enforcement?
Should the Legislature prohibit Farm Labor Contractors who
engage in sexual harassment from being issued a Farm Labor
Contractor's license or renewing the license?
Should the Legislature require a Farm Labor Contractor to
produce a written contract or agreement between the grower
and/or another Farm Labor Contractors in response to a subpoena
or discovery request?
ANALYSIS
Existing law defines a "farm labor contractor" as any person
who, for a fee, employs or recruits workers to render personal
services in connection with the production or growing of any
farm products to and who, for a fee, provides in connection
therewith one or more of the following services: furnishes
board, lodging, or transportation for those workers; supervises,
times, checks, counts, weighs, or otherwise directs or measures
their work; or disburses wage payments to these persons. (Labor
Code §1682)
Existing law prohibits any person from acting as a farm labor
contractor until a license to do so has been issued to him by
the Labor Commissioner and such license is in full effect and is
in his possession. The penalties for acting as a farm labor
contractor without a license are:
(A) For any initial citation, one hundred dollars ($100) for
each farmworker employed by the unlicensed person, plus one
hundred dollars ($100) for each calendar day that a violation
occurs, for a total penalty not to exceed ten thousand dollars
($10,000).
(B) For a second citation, two hundred dollars ($200) for each
farmworker employed by the unlicensed person, plus two hundred
dollars ($200) for each calendar day that a violation occurs,
for a total penalty not to exceed twenty thousand dollars
($20,000).
(C) For a third or subsequent citation, five hundred dollars
($500) for each farmworker employed by the unlicensed person,
plus five hundred dollars ($500) for each calendar day that a
violation occurs, for a total penalty not to exceed fifty
thousand dollars ($50,000).
(Labor Code §1683)
Existing law requires that the Labor Commissioner shall not
issue or renew a farm labor contractor license, unless:
(1) The applicant has executed a written application in a
form prescribed by the Labor Commissioner, including, among
other things, a statement on the applicant's character and
operations and the names and addresses of financially
interested partners;
(2) The applicant has posted a surety bond of $25,000 for
payrolls up to $500,000 or a bond of $50,000 for payrolls
up to $2,000,000 or a bond of $75,000 for payrolls over
$2,000,000. This bond must be payable to the State of
California in the event of violations of California labor
law.
(3) The applicant has paid the appropriate fees and passed
an examination that covers the agricultural labor law,
including safety regulations, collective bargaining laws,
and wage and hour requirements; and
(4) The Labor Commissioner is, after investigation,
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satisfied with the character of the applicant.
These penalties are deposited into the Farmworker Remediation
Fund, which is used to pay damages due to unpaid wages that
exceed the amount of the licensee's surety bond.
(Labor Code §1684)
Existing law sets the licensure fee at $510 and the licensure
renewal fee at $500. $150 of the licensure and renewal fees go
to the Farmworker Remediation Fund. Existing law also sets the
examination fee at $100. (Labor Code §1684(b))
Existing law requires that farm labor contractors receive at
least 8 hours of continuing education classes each year. The
classes must be approved by the Labor Commissioner, in
consultation with other governmental entities. (Labor Code
§1684(b))
Existing law permits the Labor Commissioner to deny, revoke, or
refuse to renew a farm labor contractor's license for a variety
of different causes, including violating health and safety laws,
making misrepresentations in the application, failing to follow
licensure requirements, and failure to pay appropriate wages.
If a farm labor contractor's license is revoked, the Labor
Commissioner must wait at least three years before issuing
another license to the sanctioned farm labor contractor. (Labor
Code §§1685 & 1690)
Existing law requires that, if a farm labor contractor leaves
the state to avoid a service of summons due to a violation of
labor law, service must instead be made on the surety.
(Labor Code §1694)
Existing law requires farm labor contractors to make available
for inspection by his or her employees and by the grower with
whom he or she has contracted a written statement in English and
Spanish showing the rate of compensation the Farm Labor
Contractor receives from the grower and the rate of compensation
the Farm Labor Contractor is paying to his or her employees.
(Labor Code §1695)
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Existing law requires farm labor contractors, upon request of
the grower with whom the farm labor contractor has a contract,
to immediately furnish the grower with a payroll list of all the
contractor's employees working for the grower. (Labor Code
§1695.5)
Existing law provides that an aggrieved employee may bring a
civil action against a farm labor contractor for injunctive
relief or damages, and, upon prevailing, recover attorney's
fees. (Labor Code §1697)
Existing law requires that any farm labor contractor who
continues to provide farm labor contracting services after his
or her license has been suspended or revoked is guilty of an
offense punishable by a fine of not less than $1,000, but not
more than $5,000, and/or by an imprisonment of not less than 6
months, but not more than 1 year. (Labor Code §1697)
This bill would:
1) Require a farm labor contractor to provide a list of all
employees who provided farm labor contractor services on
behalf of the farm labor contractor;
2) Double bond requirements to $50,000 for payrolls up to
$500,000 or a bond of $100,000 for payrolls up to
$2,000,000 or a bond of $150,000 for payrolls over
$2,000,000;
3) Require the farm labor contractor to provide
documentation to the Labor Commissioner of the size of the
contractor's payroll with either Employment Development
Department, Franchise Tax Board, Internal Revenue Service,
or workers' compensation insurer documentation;
4) Increase the farm labor contractor licensure fee to
$600, with the additional $100 funding the Labor
Commissioner's Farm Labor Contractor Enforcement Unit and
the Farm Labor Contractor Verification Unit;
5) Increases the examination fee by $100 and adds the
Department of Fair Employment and Housing to the
organizations who must be consulted by the Labor
Commissioner when creating the exam;
6) Requires that a farm labor contractor must fully remit
all wage withholdings that are due by collective bargaining
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agreement or law prior to a license being issued or
renewed;
7) Expand circumstances where service to the surety is
appropriate to include if the farm labor contractor remains
in the State, but has fled the jurisdiction where the labor
law violation has occurred;
8) Require that the farm labor contractor fully document
net and gross hours worked and wages to a grower and
provides paystubs that fully comply with California Labor
Law to the contractor's employees;
9) Require the grower to retain contracts with farm labor
contractors for three years;
10) Allow for the collection of expert witness fees in the
event of successfully pursuing action against a farm labor
contractor; and
11) Increase fees for any farm labor contractor who
continues to provide farm labor contracting services after
his or her license has been suspended or revoked to not
less than $10,000, and also extend this penalty to farm
labor contractors who were denied a license.
12) Makes additional changes regarding compliance with
federal law and appropriate posting of a farm labor
contractor's license information.
This bill would also:
1) Expand the conditions upon which a farm labor
contractor's surety bond may be payable to include damages
due to sexual harassment specifically, or harassment
generally on the basis of race, religious creed, color,
national origin, ancestry, physical disability, mental
disability, medical condition, genetic information, marital
status, sex, gender, gender identity, gender expression,
age, sexual orientation, or military and veteran status.
2) Requires the addition of protection from sexual
harassment in the workplace as a topic for the farm labor
contractor written examination.
3) Increases annual continuing education for farm labor
contractors to 12 hours and requires it include prevention
training on sexual harassment.
4) Prohibits the Labor Commissioner from issuing a license
to a farm labor contractor who, within the three preceding
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years, committed sexual harassment or employed a supervisor
who the farm labor contractor knew, or should have known,
had been found to have committed sexual harassment of an
employee.
5) Allows the Labor Commissioner to revoke, suspend, or
refuse to renew the license of a farm labor contractor who,
within the three preceding years, committed sexual
harassment or employed a supervisor who the farm labor
contractor knew, or should have known, had been found to
have committed sexual harassment of an employee.
This bill would also:
1) Require a farm labor contractor to maintain copies of
any contract or agreement for labor of services with a
grower or another labor contractor for at least three years
after the completion date of the contract.
2) Requires a farm labor contractor to make those contracts
available to employees of the Division of Labor Standards
Enforcement (DLSE), and produce the contracts in response
to a discovery request or subpoena in any civil action or
claim for unpaid wages. This includes oral agreements for
labor.
3) Allow the farm labor contractor to only produce the
portions of the contracts which show the amount of the
commission or payment for the licensee for labor or
services provided under the agreement and how that payment
was calculated.
4) Requires a farm labor contractor makes the payroll list
of available to employees of the DLSE and produce the
payroll list in response to a discovery request of subpoena
in any civil action or claim for unpaid wages.
COMMENTS
1. Need for this bill?
SB 1087 is a wide-ranging, holistic reform of the farm labor
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contractor licensure requirements. However, there are three
dominant legislative goals which guide the legislation. These
will be discussed below.
Increasing Enforcement Capabilities
Despite ongoing enforcement efforts by the Division of Labor
Standards Enforcement, stakeholders in the agricultural
industry universally agree that bad actors in the Farm Labor
Contractor industry remain prevalent. This has remained an
enduring challenge in the agricultural industry, despite the
fact that farm labor contractors have been licensed since
1951. SB 1087 seeks to aid ongoing enforcement efforts by
increasing funding for farm labor contractor licensure
enforcement and verification, increase bonding requirements,
increase penalties for failure to comply with the law,
increase wage and hour reporting, and making it easier to
access the surety bond in the event of an absconding employer,
ensuring that aggrieved employees receive some of their wages.
Combating Sexual Harassment in the Fields
As was recently documented in a Frontline documentary, sexual
harassment and sexual assault are a significant problem in
California's agricultural industry. SB 1087 combats this with
new examination requirements (funded with increased
examination fees) on preventing sexual harassment in the
workplace, allowing claims against the farm labor contractor's
surety bond in the event of a successful sexual harassment or
discrimination claim, and creating licensure penalties for a
farm labor contractor or the contractor's employees if
convicted in a court or administrative hearing of sexual
harassment.
Maintenance and Discovery of Farm Labor Contracts
Currently, existing law is silent on the length of time a farm
labor contractor needs to maintain a copy of a concluded
contract. Additionally, while most judges apparently view
such contracts as discoverable in wage and hour disputes,
stakeholders report that other judges disagree. SB 1087 would
require that these contracts must be maintained for three
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years from the conclusion date, and state that these contracts
are discoverable in a wage and hour dispute.
2. Staff Comments:
One technical issue that may be a source of concern down the
road is with the penalty structure. On page 14, lines 1-7, SB
1087 requires any farm labor contractor who continues to
provide farm labor contracting services after his or her
license has been suspended, revoked or denied to pay a penalty
of not less than $10,000. This increase has not been objected
to by any stakeholders.
However, one possible area of concern is that this would
increase penalties above what an unlicensed farm labor
contractor would pay on the first violation - a penalty capped
at $10,000. The author may want to consider increasing
penalties for unlicensed Farm Labor Contractors in order to
ensure that an incentive is not created to simply not apply
for a license and act as an unlicensed farm labor contractor.
Particularly in cases of perpetrators of sexual harassment,
this incentive could be quite pernicious.
3. Proponent Arguments :
Proponents argue that SB 1087 is an important step in
protecting the lives of farm workers in the fields.
Proponents note that SB 1087 does not expand liability for
farm labor contractors, but rather ensures that farm labor
contractors are sufficiently bonded to protect the needs of
farm workers, as well as increases funds available for the
purposes of licensure enforcement. Additionally, proponents
note that sexual harassment and assault in a serious and
significant problem in California's agricultural industry.
Proponents argue that additional training and surety bond
claims will provide needed protection to female farm workers
from the current injustices under which they currently suffer.
4. Opponent Arguments :
Opponents, taking an 'oppose unless amended' position, fully
recognize and respect the intent of the author to protect the
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safety and well-being of agricultural workers. However,
opponents have two concerns which they seek amendments to
address. The first concern is that opponents believe that the
language in SB 1087 makes contracts between farm labor
contractors and growers automatically discoverable, which
under existing law are treated on a case-by-case basis by
courts. Opponents believe that this violates due process and
should be removed. Secondly, opponents believe that the
"known or should have known" standard for a farm labor
contractor to lose his or her license due to a supervisor's
sexual harassment of an employee should be clarified.
5. Prior Legislation :
SB 168 (Monning), Chapter 715, Statutes of 2013, makes a farm
labor contractor successor to any predecessor farm labor
contractor that owed wages or penalties to a former employee
of the predecessor, whether the predecessor was a licensee or
not, liable for those wages and penalties, if the successor
farm labor contractor meets specified criteria.
SUPPORT
California Rural Legal Assistance Foundation (Sponsor)
American Federation of State, County and Municipal Employees,
AFL-CIO
California Labor Federation, AFL-CIO
The California Applicant Attorneys Association
The National Association of Social Workers, California Chapter
OPPOSITION
Agricultural Council of California
California Association of Nurseries and Garden Centers
California Association of Winegrape Growers
California Chamber of Commerce
California Citrus Mutual
California Civil Justice Association of California
California Cotton Ginners Association
California Cotton Growers Association
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California Farm Bureau Federation
California Grape and Tree Fruit League
Nisei Farmers League
Western Agricultural Processors Association
Western Growers Association
Wine Institute
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