BILL ANALYSIS                                                                                                                                                                                                    Ó





          SENATE COMMITTEE ON LABOR AND INDUSTRIAL RELATIONS
                             Senator Tony Mendoza, Chair
                                2015 - 2016  Regular 

          Bill No:               AB 202       Hearing Date:     June 10,  
          2015
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          |Author:    |Gonzalez                                             |
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          |Version:   |April 15, 2015                                       |
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          |Urgency:   |No                     |Fiscal:    |Yes              |
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          |Consultant:|Gideon Baum                                          |
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             Subject:  Professional sports teams: cheerleaders: employee  
                                       status.


          KEY ISSUE
          
          Should the Legislature define professional cheerleaders as an  
          employee for the purposes of California law? 

          ANALYSIS
          
           Existing law  provides specified timelines for final payment by  
          an employer to an employee due to discharge, quitting  
          employment, end of temporary employment assignment, or other  
          industry-specific pay timelines.  (Labor Code §§ 201, 201.3,  
          201.5, 202, & 205.5)
           
          Existing law  sets a minimum wage for all employees in  
          California, with limited exceptions, and prohibits employers,  
          unless specified, from paying less than the state minimum wage.   
          The current minimum wage is $9.00 per hour and will rise to  
          $10.00 per hour on January 1, 2016.  (Labor Code §1182.12)

           Existing law  permits an individual to seek recovery through a  
          civil suit of the unpaid balance of the minimum wage, including  
          interest, attorney fees, and costs of the suit.  








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          (Labor Code §1194) 

           Existing law  also requires that if an employee is found to have  
          been paid less than the minimum wage, that employee must be paid  
          liquidated damages in an amount that is equal to the wages  
          unlawfully unpaid, plus interest.  Existing Civil Code sets the  
          interest rate at 10 percent.  
          (Labor Code §1194.2 and Civil Code § 3289)

           Existing law  provides that if an employer demonstrates to the  
          satisfaction of the court that the failure to pay the minimum  
          wage was in good faith and that the employer had reasonable  
          grounds for believing that the act or omission was not a  
          violation of minimum wage law or regulations, the court may, in  
          its discretion, refuse to award liquidated damages or award a  
          lesser amount of liquidated damages to the employee.  (Labor  
          Code §1194.2)

           Existing law  provides that it is a violation of the law for any  
          employer or employing unit to willfully fail or refuse to make  
          any contributions which are due under the Unemployment Insurance  
          or Disability Insurance programs.  (Unemployment Insurance Code  
          §2108)

           Existing law  provides that any person or employer who,  with or  
          without intent to evade  ,
          fails to withhold or fails to pay over any personal income tax  
          withheld, is guilty of a misdemeanor and, upon conviction, shall  
          be fined an amount not to exceed one thousand dollars ($1,000),  
          or imprisoned for not more than one year, or both the fine and  
          imprisonment, at the discretion of the court.  (Unemployment  
          Insurance Code §2118)

           Existing law  creates the Department of Fair Employment and  
          Housing (DFEH) and declares its mission to protect and safeguard  
          the right and opportunity of all persons to seek, obtain, and  
          hold employment without discrimination or abridgment on account  
          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. (Government Code §§ 12900 and  
          12920)
           
          This bill  would:







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             1)   Provide that, notwithstanding any other law, for  
               purposes of the provisions of state law that govern  
               employment, a cheerleader that is utilized by a  
               California-based professional sports team during its  
               exhibitions or games shall be deemed to be an employee.
             2)   Define "cheerleader" to mean an individual who performs  
               acrobatics, dance or gymnastics exercises on a recurring  
               basis. However, the term does not include an individual who  
               is not otherwise affiliated with the sports team and is  
               utilized no more than one time in a calendar year.
             3)   Define "professional sports team" to mean a team at  
               either a minor or major league level in the sport of  
               baseball, basketball, football, ice hockey, or soccer.
             4)   Define "California-based team" to mean a team that plays  
               a majority of its home games in California.
             5)   Provide that the professional sports team shall ensure  
               that the cheerleader is classified and treated as an  
               employee.

          COMMENTS
          

          1.  A General Discussion on Employee Misclassification in  
            California:

            Employee misclassification occurs when employers illegally  
            classify employees as independent contractors, rather  
            employees. This allows employers to dodge tax payments,  
            workers' compensation premiums, and workplace protections.  
            Misclassification is a significant problem in California: in  
            the Employment Development Department's (EDD) 2013 annual  
            report, EDD reported $36,348,078 in payroll assessments and  
            $9,131,000 in tax fraud assessments in 2012 alone.

            For most employees, the deciding factor on if a worker is  
            either an employee or an independent contractor comes down to  
            the level of control the employer has over the worker, a  
            standard which dates back to English Common Law. While this is  
            determined by a multi-factor test, key determinants include  
            control over hours, equipment, and supervision. However, there  
            are also a small number of employees which are statutorily  
            classified as employees, irrespective of common law. 

            AB 202 would define professional cheerleaders as employees for  







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            the purposes of employment law, making a common law test for  
            employment unnecessary. 

          2.  The National Football League (NFL) and Cheerleader  
            Misclassification:  

            In 2014, the Oakland Raiders were sued by a group of current  
            and former cheerleaders who alleged that the Raiders refused  
            to pay minimum wage or overtime, made unlawful deductions, and  
            also refused to provide meal and rest breaks. According to the  
            filing, Raiderettes (the name of the cheerleading squad) were  
            paid a flat rate of $125 per game, irrespective of hours  
            worked. The filing also noted mandatory charity appearances  
            for the Raiderettes, for which no payment at all was received  
            by the cheerleaders.

            Similar lawsuits were filed against the Tampa Bay Buccaneers,  
            the New York Jets, the Buffalo Bills, and the Cincinnati  
            Bengals. During the Buffalo Bills lawsuit, a well-regarded  
            sports website known as Deadspin published the Buffalo Bills  
            cheerleader handbook. Reporting that the handbook was similar  
            to other cheer handbooks around the league, Deadspin detailed  
            the level of control the Buffalo Bills exerted over their  
            cheerleading squad. Examples included:

             -    Feminine hygiene;
             -    Appropriate use of tampons;
             -    Nail and hair grooming;
             -    Eating etiquette; and 
             -    Stringent rules of what jewelry can and cannot be worn.

            Despite this level of control, the Buffalo Bills argued their  
            cheerleaders were not employees, as did the other teams listed  
            above.

          3.  Proponent Arguments  :
            
            Supporters argue that this bill will would clarify that a  
            professional cheerleader is provided the same rights and  
            benefits of an employee under state law and is not improperly  
            misclassified as an independent contractor.  As a result,  
            professional sport cheerleaders would be guaranteed a legal  
            wage for attending and participating in team practices,  
            rehearsals, preparations, meetings and required workouts.  In  
            addition, they would also be covered for all required  







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            appearances at corporate, community and charity events.

          3.  Opponent Arguments  :

            None on file.

          4.  Prior Legislation  :

            AB 1309 (Perea), Chapter 653, Statutes of 2013, limited the  
            right of out-of-state athletes to file workers' compensation  
            claims in California.






          SUPPORT
          
          California Conference Board of the Amalgamated Transit Union
          California Conference of Machinists
          California Labor Federation, AFL-CIO
          California School Employees Association, AFL-CIO
          California Teamsters Public Affairs Council
          Consumer Attorneys of California
          Engineers & Scientists of California
          International Longshore & Warehouse Union
          Jockey's Guild
          Professional & Technical Engineers
          The South Bay AFL-CIO Labor Council
          UNITE-HERE, AFL-CIO
          Utility Workers Union of America
          
          OPPOSITION
          
          None on file. 

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