BILL ANALYSIS Ó
AB 202
Page 1
Date of Hearing: April 21, 2015
ASSEMBLY COMMITTEE ON ARTS, ENTERTAINMENT, SPORTS, TOURISM, AND
INTERNET MEDIA
Ian Charles Calderon, Chair
AB 202
(Gonzalez) - As Amended April 15, 2015
SUBJECT: Professional sports teams: cheerleaders: employee
status.
SUMMARY: Would, for purposes of all of the provisions of state
law that govern employment, deem a cheerleader utilized by a
California-based professional sports team during its exhibitions
or games as an employee. The bill would also require the
professional sports team to ensure that the cheerleader is
classified and treated as an employee. Specifically, this bill:
1)Provides, notwithstanding any other law, for purposes of all
of the provisions of state law that govern employment,
including this code, the Unemployment Insurance Code, and the
California Fair Employment and Housing Act (Part 2.8
(commencing with Section 12900) of Division 3 of Title 2 of
the Government Code), a cheerleader who is utilized by a
California-based professional sports team during its
exhibitions or games, shall be deemed to be an employee.
2)Further provides that the professional sports team shall
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ensure that the cheerleader is classified and treated as an
employee.
3)Contains the following definitions:
a) "California-based team" means a team that plays a
majority of its home games in California.
b) "Cheerleader" means an individual who performs
acrobatics, dance, or gymnastics exercises on a recurring
basis. This term shall not include an individual who is not
otherwise affiliated with a California-based professional
sports team and is utilized during its exhibitions or games
no more than one time in a calendar year.
c) "Professional sports team" means a team at either a
minor or major league level in the sport of baseball,
basketball, football, ice hockey, or soccer.
FISCAL EFFECT: Unknown
COMMENTS:
1)Author and supporter's statement of need for legislation.
According to the author, "It takes a lot of time and hard work
to be a cheerleader, including an initial financial investment
along with a commitment to practice just in order to have an
opportunity to professionally dance and cheer for a sports
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team.
"Cheerleaders are required to attend and participate in
practices, mandatory rehearsals, fittings, preparations,
drills, photo sessions, meetings, and workouts. Cheerleaders
are required to finance their business expenditures, including
travel and investment in their physical appearance by
purchasing required cosmetics, in the normal course of their
cheerleading duties.
"During a sporting event, professional cheerleaders are
performing and cheering. It is a product of hours upon hours
of rehearsing dance routines, gymnastics and stunts. Cheer
athletes practice their routines at least 2 to 5 times a week.
They must get physically fit in order to carry out intense
dance routines and stunts in cheerleading. On game days, a
cheerleader's performance can consist of motivating players
along with a combination of dance and music, gymnastics and
acrobatics. As frontline team ambassadors, they're valuable
contributors that add significant value to the entertainment
product and fan experience.
"Cheerleaders are featured prominently in advertising and
game-day coverage, especially leading in and out of every
commercial break on the nationally broadcasted television
programs. Prior to each sports season, selected cheerleaders
have training camps and practice, photo shoots and swimsuit
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calendars obligations. Throughout the year, they have non-game
day annual responsibilities, such as guest appearances at
schools, charity events, or conferences. These are all
employee obligations imposed by an employer?
"?After examining numerous factors, it's clear that a
cheerleader's position constitutes an employee status. For
instance, once cheerleaders are selected to work for a sports
franchise, the control over their work time ends. The
organization's management directs the set work hours, payment
schedules, dress codes and standards for behavior, among other
work conditions."
2)Recent amendments.
Last week AB 202 was heard in the Committee on Labor &
Employment, where issues arose as to the meaning of certain
provisions. The author agreed to make the following amendments
in order to provide greater clarity and specificity:
(b) Notwithstanding any other law, for purposes of all of the
provisions of state law that govern employment, including this
code, the Unemployment Insurance Code, and the California Fair
Employment and Housing Act (Part 2.8 (commencing with Section
12900) of Division 3 of Title 2 of the Government Code), a
cheerleader who is utilized by a California-based professional
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sports team directly or through a labor contractor during its
exhibitions, events or games, shall be deemed to be an employee.
(c) The professional sports team shall ensure that the
cheerleader is classified and treated as an employee.
3)Origin of legislation: lawsuits filed by NFL cheerleaders.
ESPN reports that the Oakland Raiders are being sued by
current and former cheerleaders claiming wage theft and other
unfair employment practices. According to the filing, Raiders
cheerleaders are paid $1,250 per season, which amounts to less
than $5 per hour for the time they spend rehearsing,
performing and appearing at events for which they are not
compensated. In the article, Lacy T., identified only by her
first name, in accordance with Raiderettes policy for security
reasons, was quoted as saying, "The club controls our
hairstyle and makeup, and we have to foot the bill," she said.
"We also have to pay the costs for traveling to all kinds of
events, including photo shoots...I love the Raiders and I love
being a Raiderette, but someone has to stand up for all of the
women of the NFL who work so hard for the fans and the teams."
An attorney representing the cheerleaders claims, "the Raiders
owe thousands of dollars in unpaid wages to women who worked
as Raiderettes in previous seasons, while owing thousands of
dollars in penalties to the women who worked this season."
Perhaps adding insult to injury, the cheerleader's lawyer says
NFL teams' male mascots are treated as paid employees with
benefits.
( http://espn.go.com/nfl/story/_/id/10334429/cheerleaders-file-s
uit-oakland-raiders-wage-theft-unfair-employment-practices ,
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accessed April 8, 2015)
Similar lawsuits have reportedly been filed against the Tampa
Bay Buccaneers, the New York Jets, the Buffalo Bills, the
Cincinnati Bengals, and the National Football League itself.
4)Background:
a) Misclassified employees. Employee misclassification has
become a serious problem in the United States, and
particularly in California. When companies misclassify
workers as independent contractors instead of as employees,
these workers do not receive worker protections, including
minimum wages, overtime pay, and health and vacation
benefits, to which they would otherwise be entitled.
Standard employee protections such as anti-discrimination
laws and safety regulations also do not apply to
independent contractors. Additionally, businesses do not
deduct taxes, 401(k), Social Security, or Medicare payments
from the paychecks of independent contractors, which
results in a loss of state tax income from the businesses
as well as a potential loss of income from the individual
worker who may not properly report income. Because
employers do not pay unemployment taxes for independent
contractors, workers who are misclassified cannot obtain
unemployment benefits if they lose their jobs.
A number of reports in the last several years have chronicled
the societal consequences of and impacts upon American workers
of misclassification of workers as independent contractors
versus employees. The United States Government Accountability
Office conducted a study of misclassification of workers as
independent contractors and found that employee
misclassification cost the United States government $2.72
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billion in revenue from Social Security, unemployment and income
taxes in 2006 alone. (GAO, Employee Misclassifications: Improved
Outreach Could Help Ensure Proper Worker Classification,
GAO-07-859T (May 8, 2007), pg. 1.)
Similarly, the California Employment Development Department
(EDD) reported that the number of misclassified employees
increased 54% from 2005 to 2007, reaching 15,751 workers in
2007. During this 3-year period, the EDD recovered a total
of $111,956,556 in payroll tax assessments, $18,537,894 in
labor code citations, and $40,348,667 in assessments on
employment tax fraud cases. (See California Employment
Development Department, Annual Report: Fraud Deterrence and
Detection Activities, report to the California Legislature
(June 2008)) A Daily Journal article reported on the recent
increase in worker misclassification and one person
interviewed for the article noted that worker
misclassification is attractive to employers because they
can cut their labor costs by up to 30% by moving to an
independent contractor model. (Ho, Independent Contractor
Status Raises IRS Eyebrows: Contractor Status is Cheaper
for Employers; Some Workers are Crying Foul, Daily Journal
(May 17, 2010).)
b) Statutory employees. In general, most individuals are
determined to be employees under common law, which involves
evaluating a number of specific factors. However, a
"statutory employee" is defined as an employee by law under
a specific statute. For example, Unemployment Insurance
Code Section 621 deems certain groups of workers to be
employees for purposes of certain employment tax purposes.
These "statutory employees" include corporate officers,
specified agent/commission drivers, traveling salespersons,
certain home workers, and certain artists and authors.
5)Prior related legislation
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a) SB 459 (Corbett) Chapter 706, Statutes of 2011, which
established a scheme of regulatory enforcement and
significant civil penalties for the intentional
misclassification of employees.
b) AB 950 (John A. Pérez) of 2011, would have deemed port
drayage drivers to be employees for employment law
purposes, similar to the approach taken by the instant
measure, AB 202. Held on the Assembly Inactive File.
c) SB 1583 (Corbett) of 2008, would have provided
employment consultant liability for advising unlawful
conduct through employee misclassification. Vetoed
d) SB 1490 (Padilla) of 2008, would have required the
Employment Development Department to create a form,
including factors used by EDD in determining independent
contractor status, to be distributed by employers to
workers. SB 1490 was held in the Senate Committee on
Appropriations.
e) SB 622 (Padilla) of 2007, would have made it unlawful
for employers to willfully misclassify an employee as an
independent contractor. Vetoed
REGISTERED SUPPORT / OPPOSITION:
Support
AB 202
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CA Conference Board of the Amalgamated Transit Union
CA Conference of Machinists
California Labor Federation, AFL-CIO
California School Employees Association
California Teamsters Public Affairs Council
Consumer Attorneys of California
Engineers & Scientists of California
International Longshore & Warehouse Union
Jockeys' Guild
Professional & Technical Engineers
South Bay Labor Council
UNITE-HERE, AFL-CIO
Utility Workers Union of America
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Opposition
There is no opposition on file.
Analysis Prepared by:Dana Mitchell / A.,E.,S.,T., & I.M. / (916)
319-3450