BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | SB 1087| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- 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, CONTINUED SB 1087 Page 2 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; CONTINUED SB 1087 Page 3 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 CONTINUED SB 1087 Page 4 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 CONTINUED SB 1087 Page 5 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 CONTINUED SB 1087 Page 6 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 CONTINUED SB 1087 Page 7 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 CONTINUED SB 1087 Page 8 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 **** END **** CONTINUED