BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | AB 1509| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- 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 AB 1509 Page 2 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 AB 1509 Page 3 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. AB 1509 Page 4 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 AB 1509 Page 5 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." AB 1509 Page 6 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 AB 1509 Page 7 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 AB 1509 Page 8 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 **** END ****