BILL ANALYSIS                                                                                                                                                                                                    Ó






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          Date of Hearing:  April 20, 2016


                     ASSEMBLY COMMITTEE ON LABOR AND EMPLOYMENT


                               Roger Hernández, Chair


          AB 1978  
          (Gonzalez) - As Amended April 13, 2016


          SUBJECT:  Employment: property service workers


          SUMMARY: Enacts a number of requirements related to the  
          janitorial industry.   Specifically, this bill:


          1)Defines "covered worker" to mean a janitor, including any  
            individual working, whether as an employee, independent  
            contractor, or a franchisee, as a janitor.  If an individual's  
            work duties are predominantly those of a janitor, that person  
            shall be deemed as janitor for purposes of this bill.


          2)Defines "employer" to mean any person or entity that employs  
            at least one employee and one or more covered workers and that  
            enters into contracts, subcontracts, or franchise agreements  
            to provide janitorial services.


          Workplace Sexual Violence and Sexual Harassment


          3)Requires the Department of Industrial Relations (DIR), no  
            later than July 1, 2017, to do all of the following:












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             a)   Develop worker and supervisor agendas, handouts,  
               facilitation guides, and other materials for a four-hour  
               training regarding sexual harassment, sexual violence, and  
               human trafficking that are appropriate for the janitorial  
               industry and the languages and literacy levels of covered  
               workers, as specified.  DIR shall provide these materials  
               in all languages that are the language spoken at home of at  
               least 500 janitors who reside in the state, and shall  
               update these materials on or before July 1 of each year

             b)   Establish requirements that employers shall require all  
               covered workers and supervisors, to at least annually,  
               receive comprehensive, accurate and appropriate in-person  
               training lasting at least four hours regarding sexual  
               harassment and sexual assault that provides an opportunity  
               for interactive questions and answers, as specified.



             c)   Establish minimum qualification standards for trainers  
               who may deliver such training, including but not limited  
               to, a minimum of five (5) years of experience conducting  
               adult education with the demographics of the janitorial  
               workforce.  The collective bargaining agent that represents  
               the employer's covered workers or the designee of the  
               collective bargaining agent may deliver such trainings.



             d)   Establish requirements for employers to maintain  
               accurate records of training, as specified.



             e)   Establish a toll-free hotline for the reporting of  
               complaints and incidents of workplace sexual harassment,  
               assault, and human trafficking.












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             f)   Require employers to post and display prominently a  
               notice that informs covered workers of their rights under  
               the sexual harassment and human trafficking laws, contain  
               examples of illegal employer conduct, provide the hotline  
               number and provide the contact information for local  
               resources to assist those who have experienced sexual  
               harassment and human trafficking.



             g)   Appoint an advisory group of stakeholders, including  
               representatives from a non-profit organization that  
               advocates for standards to protect workers in the  
               janitorial industry from workplace sexual harassment and  
               assault and from a labor organization that represents  
               covered workers.



             h)   Issue such regulations as are necessary to carry out  
               this bill.



          4)Requires the Occupational Safety and Health Standards Board  
            (Standards Board), no later than July 1, 2017, to adopt  
            standards that require an employer to adopt a workplace sexual  
            violence and sexual harassment prevention plan, as a part of  
            its injury and illness prevention plan, to protect covered  
            workers from sexual violence and harassment, and that includes  
            specified elements.

          5)Provides that this bill shall not be interpreted to preclude  
            the Standards Board from adopting standards that require other  
            employers to adopt plans to protect employees from workplace  
            violence or harassment, nor shall it be interpreted to  
            preclude the Standards Board from adopting standards that  











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            require an employer subject to this bill, or any other  
            employer, to adopt a workplace violence or harassment  
            prevention plan that includes elements or requirements  
            additional to, or broader in scope than, those described in  
            this bill.


          Registration of Janitorial Contractors


          6)Provides that on and after January 1, 2018, no employer may  
            conduct any janitorial business without a valid registration  
            and all employers must be registered with DIR.



          7)Provides that, in order to qualify for a certificate of  
            registration or renewal, an employer shall:



             a)   Beginning July 1, 2017, register with DIR and pay an  
               initial application fee of $1,000 and an annual renewal fee  
               of $1,000.

             b)   Execute a written application, sworn to by the employer  
               under penalty of perjury, that contains specified  
               information.



             c)   Provide evidence, disclosures under penalty of perjury,  
               or releases as are necessary to establish specified  
               information.



             d)   Designate a qualifying individual to take a written  
               examination that demonstrates an essential degree of  











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               knowledge of the current state laws and regulations that  
               apply to employers, as specified.  To successfully complete  
               the examination, the qualifying individual must correctly  
               answer at least 85 percent of the questions, and the  
               examination may only be taken a maximum of three times per  
               calendar year.



          8)Establishes specified posting and recordkeeping requirements  
            for covered employers.

          9)Provides that DIR shall not grant registration or renewal of  
            registration to specified employers, including to any employer  
            who has a record of serious, repeated, willful or pervasive  
            violations of specified laws, including any covered successor  
            employer, as defined.



          10)Authorizes DIR to revoke, suspend, or place a registration on  
            probation if specified requirements are met.



          11)Requires DIR to establish a Property Services Compliance Unit  
            to enforce the requirements of this bill.



          12)Provides that whenever an employer has a record of serious,  
            willful or pervasive violations of the laws or has violated  
            the provisions of this bill, DIR may seek to negotiate and  
            enter into a labor compliance agreement with the employer,  
            including appropriate remedial measures, compliance  
            assistance, and any steps to resolve issues to increase  
            compliance with covered laws, as specified.  Covered affected  
            workers, collective bargaining agents, and labor-management  
            cooperation committees shall have an opportunity to  











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            participate in the development and monitoring of such labor  
            compliance agreements.



          13)Establishes specified civil penalties.



          14)Authorizes the Labor Commissioner, as specified, to issue a  
            stop order against an employer that is conducting business  
            without a valid registration.



          15)Requires DIR to maintain on its website an updated list of  
            known janitorial employers, and to select employers as audit  
            subjects for the purpose of determining compliance with this  
            bill, as specified, and shall select each employer on this  
            list at least once every five years.



          16)Establishes specified criminal penalties for an employer that  
            conducts any janitorial business after its registration has  
            been suspended, revoked, or denied reissuance, and for an  
            employer, director, officer, or managing agent who fails to  
            observe a stop order.



          17)Provides that, after January 1, 2018, any person or entity  
            that hires an employer that does not have a valid registration  
            shall share with that employer all civil responsibility and  
            civil liability for all violations of specified laws dealing  
            with employment discrimination, harassment, and other matters.














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          18)Establishes specified whistleblower and anti-retaliation  
            protections for individuals.



          19)Establishes the State Janitorial Contractor Registration Fund  
            (Fund), to be funded by registration fees and civil penalties.  
             Moneys in the Fund shall only be used for administering the  
            registration of janitorial contractors and the administration  
            and enforcement of the requirements of this bill.






          20)Requires DIR, by July 1, 2017, to develop standards and  
            procedures for:



             a)   The determination whether administrative determinations,  
               arbitral awards or decisions, or civil or criminal  
               judgments are for serious, repeated, willful or pervasive  
               violations, as specified.

             b)   A covered worker, a collective bargaining agent, or a  
               labor-management cooperation committee to file a complaint  
               regarding an employer's failure to comply with the  
               requirements of this bill, and for DIR to investigate and  
               issue a written determination regarding each complaint.



             c)   Other specified matters.


          Online Posting of Janitorial Contractor Registry and Database












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          21)Provides that, after February 1, 2018, DIR's website shall  
            include a regularly updated, searchable database of registered  
            covered employers.  The database will have the capability to  
            search all data for at least the past ten years, and will  
            include specified information.

          22)Provides that after July 1, 2018, DIR's website shall include  
            a searchable database regarding its compliance and enforcement  
            activities.  The database will have the capability to search  
            all data for at least the past ten years, and will include  
            specified information.  



          23)Contains related legislative findings, declarations and  
            statements of intent.


          FISCAL EFFECT:  Unknown


          COMMENTS:  This bill establishes various requirements for the  
          janitorial industry, including a registration requirement and  
          protections against workplace sexual violence and harassment.   
          The bill contains a number of legislative findings and  
          declarations that set forth the intent of the bill, including  
          the following:


                 "Workers are widely victimized by wage theft, sexual  
               harassment and assault, failure to provide workers  
               compensation insurance and other low road practices  
               perpetrated by unscrupulous employers that fail to comply  
               with existing labor standards laws."
                 "While some high-road employers comply with labor  
               standards laws and invest in training and retaining a more  
               skilled workforce, these employers are undercut by low-road  
               competitors in a continual race to the bottom."











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                 "It is in the public interest that employers compete  
               primarily on the basis of quality, efficiency and  
               innovation, and not through a race to the bottom that  
               perpetuates substandard working conditions and lack of  
               compliance with labor standards laws."


                 "Workers in janitorial occupations often work alone at  
               night, making them vulnerable to sexual violence and  
               harassment while on the job, a condition that is  
               exacerbated by low pay, low job mobility and poor training.  
                Adopting standards to protect workers from sexual violence  
               and sexual harassment must be an obligation of all  
               janitorial industry employers."  





          According to the author, among the purpose of this bill is to  
          lower instances of sexual harassment, sexual violence, and human  
          trafficking in the property services industry, where it is  
          particularly prevalent. 


          The author argues that, most janitors and security officers work  
          alone in empty buildings at night.  This isolation is a major  
          risk factor for sexual harassment and assault.  Employers in the  
          property services industry typically service a large number of  
          worksites.  As a result, janitors and security officers  
          generally do not have day-to-day contact with anyone  
          representing the employer, other than the supervisor who may be  
          harassing them.  Being isolated from co-workers and the public  
          reduces the likelihood that anyone will intervene or serve as  
          witnesses and allows supervisors to exert greater control over  
          workers.  The author cites a survey which reported that 85  
          percent of workers who were raped in the workplace reported  











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          working alone. 


          Background on Workplace Violence Prevalence Among the Contracted  
          & Subcontracted Property Services Workforce


          According to worker advocates, few employers in the low-wage  
          economy are equipped to prevent or stop harassment. Sexual  
          harassment policies are not in place or are inadequate or  
          unenforced.  Workers may not know to whom they can report  
          harassment, even if they know harassment is illegal.   
          Supervisors are often not trained on how to respond and end up  
          doing nothing.  Other employers dismiss claims as problems that  
          should be handled by the criminal justice system.  Even worse,  
          workers are frequently retaliated against after reporting  
          harassment; almost half of women who complain of sexual  
          harassment are retaliated against in some way 


          The top concern of many Latina workers is "keeping their jobs,  
          even at the expense of their health or accepting unfair  
          treatment at work"; the threat of retaliation keeps workers from  
          reporting and increases the harassers' confidence that they will  
          not be caught. 


          A recent UC Berkeley Labor Center report<1>, titled "Race to the  
          Bottom: How Low-Road Subcontracting Affects Working Conditions  
          in California's Property Services Industry," reported on the  
          conditions faced by property service workers and shows that  
          workers in this industry face distinct challenges. Issues of  
          wage theft, misclassification, sexual harassment and sexual  
          violence are just some of the challenges facing these workers.   
          Much of this is driven by the fact that this is a subcontracted  
          ---------------------------


          <1> UC Berkeley Labor Center report, March 2016.  
          http://laborcenter.berkeley.edu/pdf/2016/Race-to-the-Bottom.pdf   










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          industry with a high percentage of labor costs, which creates an  
          incentive to cut corners in order to win contracts.  The report  
          noted a survey which found that 32 percent of workers in the  
          property services industry were paid less than minimum wage, and  
          80 percent were not paid the legally required overtime when they  
          worked more than 40 hours a week.  The same survey also found  
          that Janitors and security officers are disproportionately  
          workers of color and immigrants; more than 70 percent of  
          contracted janitors were born outside the U.S.


          The report cited specific conditions in the property services  
          industry which make workers more vulnerable to sexual  
          harassment, sexual violence, and wage theft. Among those  
          factors, isolation in particular increases the vulnerability to  
          sexual assault.  Additionally, the report found that other  
          factors such as gender, ethnicity, and immigration status all  
          make workers in the property services industry particularly  
          vulnerable.  The threat of retaliation makes it less likely that  
          a worker would report sexual harassment, sexual assault, wage  
          theft, or other workplace misconduct. 


          "A boom in companies trying to cut costs by contracting out  
          janitorial and security jobs has led to large pay disparities  
          between workers doing the same jobs," according to the UC  
          Berkeley report as cited by the Los Angeles Times<2>? "Many  
          contractors, especially smaller companies, also do not pay  
          overtime or even minimum wage, Sara Hinkley, the report's  
          coauthor said.  They often misclassify workers as independent  
          contractors, thereby avoiding making Social Security  
          contributions and sometimes even pocketing taxes that would  
          normally be deducted from paychecks." 


          "Janitors who work for California contractors earn on average  

          ---------------------------


          <2>  
          http://www.latimes.com/business/la-fi-contract-janitors-story.htm 
          l 








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          $10.31 an hour, or 20% less than janitors who work directly for  
          a company that uses their services", according to the report,  
          prepared by the university's Center for Labor Research and  
          Education 



          In June of 2015, Reveal News wrote an investigative piece<3>  
          titled, "Under cover of darkness female janitors face rape and  
          assault."  The piece states that, "In Massachusetts, seven  
          female janitors cleaning universities and office buildings for a  
          company called UGL Unicco sued their employer after they said  
          their supervisor touched and harassed them.  The case settled in  
          2002 for $1 million; the company did not admit wrongdoing.   
          Janitors have sued the company five times in federal courts  
          since then.  In Minnesota, a janitor filed a lawsuit in 2009  
          that claimed she was raped repeatedly by her boss while on the  
          clock cleaning a shopping mall.  When it got notice of her  
          complaint, cleaning company Service Management Systems asked the  
          accused manager to gather evidence for the case.  The company  
          settled the case and later said this was against its protocol.   
          The janitor now works uneventfully for ABM."


          The piece continues and tells several deeply troubling stories  
          of pervasive workplace fear and violence.  "Operations like  
          these do the thankless work of keeping everyone's office space  
          clean and humming.  The very fact that their workers are  
          supposed to remain unseen in an industry that takes all comers  
          mean that when it comes to sexual violence on the job, almost  
          everything that could go wrong does." 


          Arguments in Support



          ---------------------------
          <3>  
          https://www.revealnews.org/article/under-cover-of-darkness-female 
          -janitors-face-rape-and-assault/ 










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          This bill is sponsored by SEIU California.

          They and other supporters of the bill argue that a recent report  
          by the UC Berkeley Labor Center reported on the conditions in  
          the property services industry.  The report noted a survey which  
          found that 32 percent of workers in the property services  
          industry were paid less than minimum wage, and 80 percent were  
          not paid the legally required overtime when they worked more  
          than 40 hours a week.  The same survey also found that janitors  
          and security officers are disproportionately workers of color  
          and immigrants; more than 70 percent of contracted janitors were  
          born outside the U.S.  The report also cited specific conditions  
          in the property services industry which make workers more  
          vulnerable to sexual harassment, sexual violence, and wage  
          theft. Among those factors, isolation in particular increases  
          the vulnerability to sexual assault. 
           
          Supporters state that it is clear that the property services  
          industry is in need of regulation in order to protect vulnerable  
          workers. In fact, there are five main industries in California  
          operate almost exclusively through contracting and  
          subcontracting, including construction, garment manufacturing,  
          farm labor, long-term care, and property services.  Not  
          coincidentally, basic labor violations plague these industries;  
          labor scholars and enforcement agencies continually observe that  
          contracted labor frustrates wage enforcement.  Contracting  
          disrupts the direct relationship between employers and  
          employees.  Workers hired by contractors and subcontractors are  
          often ignorant of the identity of, or have little access to,  
          their true employer.

          Among these five industries, all have a registry or licensing,  
          except for property services.  And the laws regulating farm  
          labor contractors require mandatory sexual harassment training  
          for both employees and supervisors.  In addition to these  
          industries, the car wash industry also requires employers to  











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          register with the state and pay a bond.

          They argue that the state has acted to regulate other industries  
          with similar risk factors, similar worker populations, and  
          similar contracted labor.  They believe the time has come to  
          similarly regulate the property services industry. 
          


          Arguments in Opposition





          The California Chamber of Commerce (CalChamber) opposes this  
          bill unless amended.  They state that the business community has  
          repeatedly participated in efforts to address the underground  
          economy.  Employers who intentionally disregard the law not only  
          hurt employees, but other businesses in the industry who are  
          trying to comply with the myriad of California labor and  
          employment laws, tax laws, licensing requirements, etc.   
          However, they state that this bill proposes unprecedented  
          standards that simply far exceed the need to address issues in  
          the underground economy.  They are concerned that some of the  
                                 provisions in this bill are so extreme, it will either: (1)  
          limit the participation of good acting businesses in the  
          industry; or, (2) encourage those unlawful actors to continue to  
          operate in the underground economy, as the cost of compliance is  
          too high.

          They express particular concern that the provision providing for  
          joint liability for certain provisions of the law related to  
          discrimination and harassment are unprecedented and  
          inappropriate.  They contend that there is no basis as to why a  
          business that contracts for janitorial services should be deemed  
          statutorily liable for all protections listed in this section of  
          the Government Code when there is absolutely no way in which  
          that contractor can engage or force the janitorial company to  











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          comply with provisions of the law.  Moreover, they argue that  
          this statutory mandate ignores and disrupts current law that  
          already provides liability for a business who is acting as a  
          "joint employer."

          CalChamber also argues that the enforcement mechanism and  
          penalties proposed in this bill are overly punitive and  
          unprecedented.  While they appreciate the intent of this bill to  
          create a disincentive for unlawful behavior, such a list of  
          penalties and enforcement will likely have the opposite impact  
          of discouraging good actor businesses from engaging in the  
          industry and drive bad actor businesses further into the  
          underground economy.  This list of proposed penalties and  
          enforcement is also entirely unprecedented for any other  
          industry engaged in the underground economy.

          Finally, CalChamber argues that several of the other provisions  
          of this bill are overbroad, unprecedented, and too onerous.
          


          REGISTERED SUPPORT / OPPOSITION:




          Support


          CLEAN Carwash Campaign


          Koreatown Immigrant Workers Alliance


          Maintenance Cooperation Trust Fund 


          SEIU California (sponsor)











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          UFCW Western States Council


          Wage Justice Center




          Opposition


          California Chamber of Commerce




          Analysis Prepared by:Taylor Jackson/Ben Ebbink / L. & E. / (916)  
          319-2091