BILL ANALYSIS Ó
AB 621
Page 1
ASSEMBLY THIRD READING
AB
621 (Roger Hernández)
As Amended June 1, 2015
Majority vote
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|Committee |Votes |Ayes |Noes |
| | | | |
| | | | |
|----------------+------+--------------------+----------------------|
|Labor |5-2 |Roger Hernández, |Harper, Patterson |
| | |Chu, Low, McCarty, | |
| | |Thurmond | |
| | | | |
|----------------+------+--------------------+----------------------|
|Appropriations |12-5 |Gomez, Bonta, |Bigelow, Chang, |
| | |Calderon, Daly, |Gallagher, Jones, |
| | |Eggman, |Wagner |
| | | | |
| | | | |
| | |Eduardo Garcia, | |
| | |Gordon, Holden, | |
| | |Quirk, Rendon, | |
| | |Weber, Wood | |
| | | | |
| | | | |
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SUMMARY: Enacts a limited amnesty program with respect to the
misclassification of port drivers. Specifically, this bill:
AB 621
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1)Provides that, notwithstanding any law, a motor carrier
performing drayage services at one or more ports in this state
shall be relieved of liability for statutory or civil penalties
associated with misclassification of commercial drivers as
independent contractors if the motor carrier enters into a
consent decree with the Labor Commissioner whereby the motor
carrier agrees to convert all of its commercial drivers to
employees.
2)Provides that a consent decree entered into pursuant this bill
shall contain all of the following:
a) An agreement by the motor carrier to pay all wages,
benefits, and taxes owed, if any, to or in relation to all of
its converted commercial drivers covering the period of time
from the first date of misclassification to the date the
consent decree is entered into, but not exceeding the
applicable statute of limitations.
b) An agreement by the motor carrier to maintain any
converted commercial driver positions as employee positions.
c) An agreement by the motor carrier that any future
commercial drivers hired to perform the same or similar
duties shall be presumed to have employee status and that the
motor carrier shall have the burden to prove by clear and
convincing evidence that they are not employees in any
administrative or judicial proceeding in which their
employment status is an issue.
d) Any other provisions the Labor Commissioner deems
necessary to carry out the intent of this section or to
enforce the provisions of the consent decree.
3)Provides that a consent decree entered into may contain a
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provision authorizing the Labor Commissioner to recover from the
motor carrier an amount necessary to cover the Labor
Commissioner's reasonable costs associated with the review,
approval, and compliance with the consent decree.
4)Provides that this bill does not apply to a motor carrier that
has a pending civil lawsuit against it in state or federal court
alleging misclassification of commercial drivers where the
lawsuit was filed prior to January 1, 2015.
5)Provides that this bill shall apply only to consent decrees
entered into by the Labor Commissioner prior to January 1, 2017.
FISCAL EFFECT: According to the Assembly Appropriations
Committee, initial administrative costs of approximately $900,000
and ongoing costs of approximately $850,000 to the Department of
Industrial Relations Division of Labor Standards Enforcement
(DLSE) to review consent decrees. These costs may be offset to the
extent the consent decree process reduces individual wage claim
cases.
COMMENTS: This bill is sponsored by the California Teamsters
Public Affairs Council, who argues that nearly all of the
so-called "owner-operator" truck drivers that haul intermodal
freight to and from the ports of California have been
misclassified. In hundreds of recent cases and class action
lawsuits, the drivers have been determined to be employees. When
a driver has been misclassified, the employer is liable for back
wages, taxes, social security contributions, and potentially
massive penalties.
This bill creates a voluntary program (to be administered by the
Labor Commissioner) which would allow motor carriers who wish to
reclassify their drivers as employees and have the penalties
associated with their past unlawful conduct waived. The sponsor
argues that this bill is a way for port drayage motor carriers to
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"come in from the cold" in a way that will save them from paying
financially crippling penalties.
This bill is also supported by Total Transportation Services,
Inc., who states that it will provide welcome relief to port
drayage companies, like it, who wish to reclassify their drivers
from independent contractor to employee status but face
substantial penalties if they do so. They state further: "We
understand that some companies may not wish to avail themselves of
this amnesty program and we respect their decision not to do so.
However, we need this program and appreciate your willingness to
introduce this legislation."
The California Trucking Association writes that while it is
willing to work with the author to address the issues raised by
this bill, it nevertheless opposes this bill because it does not
address the "key issue" leading to drayage motor carriers facing
this situation in the first place - "misuse" of the DLSE's
administrative hearing process.
Analysis Prepared by:
Ben Ebbink / L. & E. / (916) 319-2091 FN: 0000575