BILL ANALYSIS                                                                                                                                                                                                    Ó






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          |SENATE RULES COMMITTEE            |                       AB 1509|
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                                   THIRD READING 


          Bill No:  AB 1509
          Author:   Roger Hernández (D)
          Amended:  8/31/15 in Senate
          Vote:     21  

           SENATE LABOR & IND. REL. COMMITTEE:  3-1, 6/10/15
           AYES:  Mendoza, Leno, Mitchell
           NOES:  Stone
           NO VOTE RECORDED:  Jackson

           SENATE JUDICIARY COMMITTEE:  5-2, 6/23/15
           AYES:  Jackson, Hertzberg, Leno, Monning, Wieckowski
           NOES:  Moorlach, Anderson

           SENATE APPROPRIATIONS COMMITTEE:  5-2, 7/13/15
           AYES:  Lara, Beall, Hill, Leyva, Mendoza
           NOES:  Bates, Nielsen

           ASSEMBLY FLOOR:  54-26, 5/14/15 - See last page for vote

           SUBJECT:   Employer liability


          SOURCE:    California Labor Federation, AFL-CIO

          DIGEST:   This bill extends current employment retaliation  
          protections to an employee who is a family member of a person  
          who engaged in, or is perceived to have engaged in, legally  
          protected conduct. This bill also exempts household goods  
          carriers from the client employer and labor contractor liability  
          provisions in law. 

          Senate Floor Amendments of 8/31/15 add an exemption for  








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          household goods carriers from the client employer and labor  
          contractor liability provisions enacted last year. 

          ANALYSIS:
               
          Existing law: 

          1)Contains provisions that define unlawful discrimination and  
            lawful employment practices by employers and employment  
            agencies to protect both current and prospective employees  
            against employment discrimination.

          2)Prohibits an employer from discharging, or in any manner  
            discriminate, retaliate, or take any adverse action against,  
            any employee or applicant for employment because he/she has  
            engaged in prescribed protected conduct relating to the  
            enforcement of the employee's or applicant's rights.  

          3)States that such protected conduct includes, among others,  
            making an oral or written complaint that he/she is owed unpaid  
            wages or claims regarding the employee's safety or health. 

          4)Provides that any employee that is discharged, threatened with  
            discharge, demoted, suspended, retaliated against, subjected  
            to an adverse action, or in any other manner discriminated  
            against because he/she engaged in any protected conduct - such  
            as making a bona fide complaint or claim to the Division of  
            Labor Standards Enforcement - is entitled to reinstatement and  
            reimbursement for lost wages and benefits. 

          5)Provides that any employer, who willfully refuses to hire,  
            promote, or otherwise restore a current or former employee  
            found to be eligible for rehiring or promotion by a grievance  
            procedure, arbitration, or hearing authorized by law, is  
            guilty of a misdemeanor.

          6)Provides that in addition to other remedies available, an  
            employer who violates these provisions is liable for a civil  
            penalty not exceeding $10,000 per employee for each violation,  
            to be awarded to the employee(s) who suffered the violation. 

          7)Requires a client employer to share with a labor contractor  
            all civil legal responsibility and civil liability for all  
            workers supplied by that labor contractor for both a) the  







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            payment of wages, and b) failure to secure valid workers'  
            compensation coverage. 

          8)Prohibits a client employer from shifting to the labor  
            contractor any legal duties or liabilities, as defined.  
            However, existing law, specifies that these provisions shall  
            not be interpreted to impose liability on (among others) a  
            client employer that is a motor carrier of property  
            subcontracting with, or otherwise engaging, another motor  
            carrier to provide transportation services using its own  
            employees and commercial motor vehicles.

          This bill:

          1)Prohibits an employer, or a person acting on behalf of the  
            employer, from retaliating against an employee because he/she  
            is a family member of a person who has, or is perceived to  
            have, engaged in any protected activity under existing law. 

          2)Provides that "employer" or "person acting on behalf of the  
            employer" for purposes of these employment retaliation  
            provisions includes a "client employer" or a "controlling  
            employer," as currently defined in law.

          3)Specifies that these provisions do not apply to claims that  
            are a result of demotion, suspension, or discharge from  
            employment for lawful conduct occurring during nonworking  
            hours away from the employer's premises, unless the lawful  
            conduct involves the exercise of employee rights otherwise  
            covered in law.

          4)Exempts from liability a client employer that is not a  
            household goods carrier based solely on the employer's use of  
            a third-party household goods carrier permitted by the Public  
            Utilities Commission, pursuant to specified code sections, to  
            move household goods. 

          5)Exempts from liability a client employer that is a household  
            goods carrier permitted by the Public Utilities Commission,  
            pursuant to specified code sections, subcontracting with, or  
            otherwise engaging, another permitted household goods carrier  
            to provide transportation of household goods using its own  
            employees and motor vehicles, as defined. 








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          Background
          
          In 2013, the Labor Commissioner received 3,514 complaints of  
          employer retaliation, a number that is likely understated  
          because it only represents those workers who were courageous  
          enough to come forward and file a claim. Immigrant workers are  
          particularly vulnerable to employer retaliation and abuse.  A  
          2013 report by the National Employment Law Project stated,  
          "Silencing or intimidating a large percentage of workers in any  
          industry means that workers are hobbled in their efforts to  
          protect and improve their jobs. As long as unscrupulous  
          employers can exploit some low-wage workers with impunity, all  
          low-wage workers suffer compromised employment protections and  
          economic security. Law-abiding employers are forced to compete  
          with illegal practices, perpetuating low-wages in a whole host  
          of industries." (Workers' Rights on ICE: How Immigration Reform  
          Can Stop Retaliation and Advance Labor Rights) 

          Recent cases and examples highlight several major gaps in  
          existing California statutes that prohibit retaliation against  
          employees for engaging in protected activity.  For example,  
          existing law does not address retaliation protections in cases  
          where multiple family members work for the same employer.   
          According to the author, situations have arisen in which one  
          employee will engage in protected activity, but the employer  
          will retaliate against the employee's family member (such as  
          terminating the family member in retaliation for the others  
          employee's protected activity).  Existing law is unclear about  
          whether such conduct is unlawful.  In at least one recent case  
          (Su v. Siemens) the Court held that existing law did not extend  
          protection in such a situation.  In that case, a construction  
          foreman made several safety-related complaints, and the employer  
          terminated the employer's son, who also happened to be employed  
          by the same employer. 

          Another gap in existing law exists with respect to the category  
          of employer that may be cited for unlawful retaliation. In the  
          same case cited above (Su v. Siemens), an employee foreman made  
          safety-related claims both to a subcontractor (his direct  
          employer) and the general contractor that had overall  
          responsibility for the worksite. When the employee was  
          terminated, he alleged retaliation against both the  
          subcontractor and the general contractor. However, the Court  
          held that the occupational safety and health retaliation statute  







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          applied only to "direct employers" of the complaining employee,  
          and dismissed the claims against the general contractor.  This  
          is despite the fact that existing California law already  
          recognizes the general contractor as a "controlling employer"  
          that may be cited for workplace safety violations (AB 1897,  
          Hernandez, Chapter 728, Statutes of 2014).  

          This bill strengthens current employment retaliation provisions  
          to address both of these gaps in existing law by, 1) providing  
          that an employer shall not retaliate against an employee because  
          the employee is a family member of a person who has engaged in  
          protected activity; and 2) providing that prohibitions against  
          retaliation apply to a "client employer" or a "controlling  
          employer."

          Recent amendments address an issue having to do with the client  
          employer and labor contractor relationship as established by AB  
          1897.  AB 1897 defined a "client employer" to mean a business  
          entity that obtains or is provided workers to perform labor  
          within its usual course of business from a labor contractor.   
          Under these provisions, a client employer is required to share  
          with a labor contractor all civil legal responsibility and civil  
          liability for all workers supplied by that labor contractor for  
          both 1) the payment of wages, and 2) failure to secure valid  
          workers' compensation coverage. However, existing law exempts  
          certain employers from these provisions including a motor  
          carrier of property subcontracting with, or otherwise engaging,  
          another motor carrier to provide transportation services using  
          its own employees and commercial motor vehicles.  

          The recent amendments to this bill further exempt from liability  
          household goods carriers.  According to the author, these  
          amendments attempt to clarify the provisions enacted last year  
          which had a limited exemption for certain subcontracting work  
          performed by "motor carriers." The author intended to exempt  
          household goods movers (moving companies) and had assumed the  
          provisions enacted last year covered them; however, they are  
          regulated by the Public Utilities Commission under a different  
          code section so the motor carrier provision did not technically  
          cover them.  The author wishes to further clarify in Labor Code  
          that these companies are included under the exemption by  
          replicating the motor carrier exemption but makes the  
          appropriate reference to "household goods carriers."








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          Prior/Related Legislation
          
          AB 1897 (Hernandez, Chapter 728, Statutes of 2014) establishes  
          specified liability for client employers that obtain workers  
          from third-party labor contractors. 

          AB 263 (Hernandez, Chapter 732, Statutes of 2013) prohibits an  
          employer or any other person or entity to engage in, or to  
          direct another to engage in, unfair immigration-related  
          practices against any person for the purpose of, or with the  
          intent of, retaliating against him/her for exercising any  
          lawfully protected right.

          AB 666 (Steinberg, Chapter 577, Statutes of 2013) prohibits  
          retaliation against employees and others on the basis of  
          citizenship and immigration status. It also strengthens  
          anti-retaliation laws by protecting an employee who provides  
          information to, or testifies before, any public body conducting  
          an investigation, hearing, or inquiry into improper employer  
          conduct, as specified.

          FISCAL EFFECT:   Appropriation:    No          Fiscal  
          Com.:YesLocal:   No


          According to the Senate Appropriations Committee, the Department  
          of Industrial Relations indicates that it would incur  
          administrative costs (special funds) of $120,000 in the first  
          year, and $112,000 ongoing to implement the provisions of this  
          bill.




          SUPPORT:   (Verified8/31/15)


          California Labor Federation, AFL-CIO (source)
          American Federation of State, County and Municipal Employees 
          California Employment Lawyers Association
          California Moving and Storage Association 
          California Professional Firefighters
          California Rural Legal Assistance Foundation
          Consumer Attorneys of California 







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          OPPOSITION:   (Verified8/31/15)


          None received


          ARGUMENTS IN SUPPORT:     According to proponents, although  
          California law contains a strong public policy to protect  
          employees from retaliation for exercising their rights, recent  
          cases and examples highlight several major gaps in existing law  
          that prohibit retaliation against employees for engaging in  
          protected activity. In the temporary employment setting, for  
          example, temporary workers by definition have no guarantee of  
          work so a worker can easily be punished for speaking out.   
          Employers use the threat of terminating the contract with the  
          staffing agency or contractor if workers exercise protected  
          labor rights. These types of retaliation are hard to prove and  
          hard to remedy.  


          In addition, supporters contend that family retaliation is an  
          especially common practice employed against immigrant workers,  
          who frequently find work alongside family members in the fields,  
          warehouses, and hotels.  Proponents argue that such retaliation  
          must clearly be prohibited to ensure that workers can speak out  
          about unlawful practices without fear of reprisals against  
          family members. The author and proponents believe that this bill  
          will fill in the gaps in the law of retaliation by clarifying  
          that existing prohibitions against retaliation apply to a  
          "client employer" or a "controlling employer." In addition, it  
          will clarify that an employer cannot retaliate against a worker  
          because that worker is related to another worker who engaged in  
          protected activity.


          Additionally, recent amendments to the bill address a technical  
          correction in provisions enacted last year which the California  
          Moving and Storage Association support. Specifically, they state  
          that the limited exemption for certain subcontracting work in  
          the transportation industry was supposed to include the moving  
          and storage industry; unfortunately, due to an unintended  
          omission, the specific provisions in the Public Utilities Code  







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          governing the regulation of the moving and storage industry by  
          the Public Utilities Commission were not included in the  
          language. This technical amendment correctly references this  
          industry and they support this bill.   



          ASSEMBLY FLOOR:  54-26, 5/14/15
          AYES:  Alejo, Bloom, Bonilla, Bonta, Brown, Burke, Calderon,  
            Campos, Chau, Chiu, Chu, Cooley, Cooper, Dababneh, Daly, Dodd,  
            Eggman, Frazier, Cristina Garcia, Eduardo Garcia, Gatto,  
            Gipson, Gomez, Gonzalez, Gordon, Gray, Hadley, Roger  
            Hernández, Holden, Irwin, Jones-Sawyer, Lackey, Levine, Lopez,  
            Low, McCarty, Medina, Mullin, Nazarian, O'Donnell, Perea,  
            Quirk, Rendon, Ridley-Thomas, Rodriguez, Salas, Santiago, Mark  
            Stone, Thurmond, Ting, Weber, Williams, Wood, Atkins
          NOES:  Achadjian, Travis Allen, Baker, Bigelow, Brough, Chang,  
            Chávez, Dahle, Beth Gaines, Gallagher, Grove, Harper, Jones,  
            Kim, Linder, Maienschein, Mathis, Mayes, Melendez, Obernolte,  
            Olsen, Patterson, Steinorth, Wagner, Waldron, Wilk

          Prepared by:Alma Perez / L. & I.R. / (916) 651-1556
          9/1/15 21:20:05


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