BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                            



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                                    THIRD READING


          Bill No:  SB 1087
          Author:   Monning (D), et al.
          Amended:  5/5/14
          Vote:     21

           
           SENATE LABOR & INDUSTRIAL RELATIONS COMMITTEE  :  4-1, 4/24/14
          AYES:  Hueso, Leno, Padilla, Mitchell
          NOES:  Wyland

           SENATE APPROPRIATIONS COMMITTEE  :  5-2, 5/19/14
          AYES:  De León, Hill, Lara, Padilla, Steinberg
          NOES:  Walters, Gaines


           SUBJECT  :    Farm labor contractors

           SOURCE  :     California Rural Legal Assistance Foundation


           DIGEST  :    This bill strengthens the farm labor contractor (FLC)  
          standards by, among other things, increasing bonding  
          requirements and raising licensure fees for FLC licensure  
          enforcement, as specified; prohibits the FLC who engage in  
          sexual harassment from being issued a FLC's license or renewing  
          the license, as specified; and requires a FLC to produce a  
          written contract or agreement between the grower and/or another  
          FLC in response to a subpoena or discovery request, as  
          specified.

           ANALYSIS  :    

          Existing law defines a "FLC" as any person who, for a fee,  
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          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.  

          Existing law prohibits any person from acting as a FLC until a  
          license to do so have been issued to him by the Labor  
          Commissioner (Commissioner) and such license is in full effect  
          and is in his possession.  The penalties for acting as a FLC  
          without a license are:

          1. For any initial citation, $100 for each farmworker employed  
             by the unlicensed person, plus $100 for each calendar day  
             that a violation occurs, for a total penalty not to exceed  
             $10,000;

          2. For a second citation, $200 for each farmworker employed by  
             the unlicensed person, plus $200 for each calendar day that a  
             violation occurs, for a total penalty not to exceed $20,000;  
             or

          3. For a third or subsequent citation, $500 for each farmworker  
             employed by the unlicensed person, plus $500 for each  
             calendar day that a violation occurs, for a total penalty not  
             to exceed $50,000.

          Existing law requires that the Commissioner shall not issue or  
          renew a FLC license, unless:

          1. The applicant has executed a written application in a form  
             prescribed by the 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 million or a bond of $75,000 for payrolls over $2  
             million.  This bond must be payable to the State of  
             California in the event of violations of California Labor  
             Law;

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          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 Commissioner is, after investigation, 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.

          Existing law sets the licensure fee at $510 and the licensure  
          renewal fee at $500.  $150 of the licensure and renewal fees  
          goes to the Farmworker Remediation Fund. Existing law also sets  
          the examination fee at $100.  

          Existing law requires that FLCs receive at least eight hours of  
          continuing education classes each year.  The classes must be  
          approved by the Commissioner, in consultation with other  
          governmental entities.  

          Existing law permits the Commissioner to deny, revoke, or refuse  
          to renew a FLC'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 FLC's license is revoked, the Commissioner must wait at  
          least three years before issuing another license to the  
          sanctioned FLC.  

          Existing law requires that, if a FLC leaves the state to avoid a  
          service of summons due to a violation of labor law, service must  
          instead be made on the surety.   

          Existing law requires FLCs to make available for inspection by  
          his/her employees and by the grower with whom he/she has  
          contracted a written statement in English and Spanish showing  
          the rate of compensation the FLC receives from the grower and  
          the rate of compensation the FLC is paying to his/her employees.  


          Existing law requires FLCs, upon request of the grower with whom  

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          the FLC has a contract, to immediately furnish the grower with a  
          payroll list of all the contractor's employees working for the  
          grower.  

          Existing law provides that an aggrieved employee may bring a  
          civil action against a FLC for injunctive relief or damages,  
          and, upon prevailing, recover attorney's fees.  

          Existing law requires that any FLC who continues to provide  
          FLC's services after his/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 six months, but not more than one year.  


          This bill:

          1. Requires a FLC to provide a list of all employees who  
             provided FLC services on behalf of the FLC, as specified. 

          2. Requires a double bond requirement to $50,000 for payrolls up  
             to $500,000 or a bond of $100,000 for payrolls up to $2  
             million or a bond of $150,000 for payrolls over $2 million.

          3. Requires the FLC to provide documentation to the Commissioner  
             of the size of the contractor's payroll with either the  
             Employment Development Department, Franchise Tax Board,  
             Internal Revenue Service, or workers' compensation insurer  
             documentation.

          4. Increases the FLC licensure fee to $600, with the additional  
             $100 funding the Commissioner's FLC Enforcement Unit and the  
             FLC Verification Unit.

          5. Requires an applicant for licensure as a FLC to provide a  
             written statement verifying that the person's supervisorial  
             employees have been trained in the prevention of sexual  
             harassment, as specified.

          6. Increases the examination fee by $100 and adds the Department  
             of Fair Employment and Housing to the organizations that must  
             be consulted by the Commissioner when creating the exam.

          7. Requires that a FLC must fully remit all wage withholdings  

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             that are due by collective bargaining agreement or law prior  
             to a license being issued or renewed.

          8. Expands circumstances where service to the surety is  
             appropriate to include if the FLC remains in the State, but  
             has fled the jurisdiction where the labor law violation has  
             occurred.

          9. Requires that the FLC 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.

          10.Requires the grower to retain contracts with FLCs for three  
             years.

          11.Allows for the collection of expert witness fees in the event  
             of successfully pursuing action against a FLC.

          12.Increases fees for any FLC who continues to provide FLCs  
             services after his/her license has been suspended or revoked  
             to not less than $10,000, and also extend this penalty to  
             FLCs who were denied a license.

          13.Makes additional changes regarding compliance with federal  
             law and appropriate posting of a FLC's license information.

          14.Expands the conditions upon which a FLC'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.

          15.Requires the addition of protection from sexual harassment in  
             the workplace as a topic for the FLC written examination.

          16.Increases annual continuing education for FLCs to 12 hours  
             and requires it to include prevention training on sexual  
             harassment.

          17.Prohibits the Commissioner from issuing a license to a FLC  

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             who, within the three preceding years, committed sexual  
             harassment or employed a supervisor who the FLC knew, or  
             should have known, had been found to have committed sexual  
             harassment of an employee.

          18.Allows the Commissioner to revoke, suspend, or refuse to  
             renew the license of a FLC who, within the three preceding  
             years, committed sexual harassment or employed a supervisor  
             who the FLC knew, or should have known, had been found to  
             have committed sexual harassment of an employee.

          19.Requires a FLC 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.

          20.Requires a FLC to make those contracts available to employees  
             of the Division of Labor Standards Enforcement (DLSE), and  
             produces 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.

          21.Allows the FLC 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.

          22.Requires a FLC 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.

           Prior Legislation  

          SB 168 (Monning, Chapter 715, Statutes of 2013), makes a FLC  
          successor to any predecessor FLC 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 FLC meets specified criteria.

           FISCAL EFFECT  :    Appropriation:  Yes   Fiscal Com.:  Yes    
          Local:  Yes



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          According to the Senate Appropriations Committee:


           The Department of Industrial Relations indicates it would  
            incur a one-time cost of $58,000 for rulemaking (Special  
            Fund).

           The Department of Fair Employment Housing indicates minimal  
            costs from the bill.

           SUPPORT  :   (Verified  5/20/14)

          California Rural Legal Assistance Foundation (source)
          American Federation of State, County and Municipal Employees,  
          AFL-CIO
          California Applicant Attorneys Association
          California Catholic Conference, Inc.
          California Labor Federation, AFL-CIO
          California Teamsters Public Affairs Council
          Justice for Working People
          National Association of Social Workers, California Chapter
          United Farm Workers

           OPPOSITION  :    (Verified  5/20/14)

          Agricultural Council of California
          Association of Nurseries and Garden Centers
          Association of Winegrape Growers
          California Chamber of Commerce
          California Citrus Mutual
          California Cotton Ginners Association
          California Cotton Growers Association
          California Farm Bureau Federation
          California Grape and Tree Fruit League
          Civil Justice Association of California
          Family Winemakers of California
          Nisei Farmers League
          Western Agricultural Processors Association
          Western Growers Association
          Wine Institutes

           ARGUMENTS IN SUPPORT  :    Proponents argue that this bill is an  
          important step in protecting the lives of farm workers in the  
          fields.  Proponents note that this bill does not expand  

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          liability for FLCs, but rather ensures that FLCs 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.

           ARGUMENTS IN OPPOSITION  :    Opponents taking an 'oppose unless  
          amended' position, fully recognize and respect the intent of the  
          author to protect the 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 this bill makes contracts between  
          FLCs 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 FLC to lose his/her license due to a  
          supervisor's sexual harassment of an employee should be  
          clarified.  
           

          PQ:d  5/21/14   Senate Floor Analyses 

                           SUPPORT/OPPOSITION:  SEE ABOVE

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