BILL ANALYSIS Ó AB 1978 Page 1 Date of Hearing: May 11, 2016 ASSEMBLY COMMITTEE ON APPROPRIATIONS Lorena Gonzalez, Chair AB 1978 (Gonzalez) - As Amended April 13, 2016 ----------------------------------------------------------------- |Policy |Labor and Employment |Vote:|5 - 2 | |Committee: | | | | | | | | | | | | | | ----------------------------------------------------------------- Urgency: No State Mandated Local Program: YesReimbursable: No SUMMARY: This bill enacts a number of requirements related to the janitorial industry including, sexual harassment and sexual violence standards and training tailored to this industry, and the creation of a contractor registration program. Specifically, this bill: 1)Requires the Department of Industrial Relations (DIR), no later than July 1, 2017, to do the following: AB 1978 Page 2 a) Develop materials, employer requirements, and minimum training requirements around the provision of 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. b) Establish a toll-free hotline for the reporting of complaints and incidents of workplace sexual harassment, assault, and human trafficking. c) 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. d) Issue such regulations as are necessary to carry out this bill. 2)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, as specified. 3)Prohibits employers from conducting any janitorial business without a valid registration with DIR, as specified, starting January 1, 2018. Establishes an initial application fee of $1,000 and an annual renewal fee of $1,000. Authorizes DIR to adjust this fee, no more than annually, to support the registration program. AB 1978 Page 3 4)Prohibits DIR from granting registration or renewal of registration to any employer who has a record of serious, repeated, willful or pervasive violations of specified laws, including any covered successor employer, as defined. 5)Requires DIR to establish a Property Services Compliance Unit to enforce the requirements of this bill. 6)Provides DIR and the Labor Commissioner with several enforcement and compliance mechanisms, and establishes civil penalties for violations of provisions of this bill. 7)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. 8)Establishes specified whistleblower and anti-retaliation protections for individuals. 9)Establishes the State Janitorial Contractor Registration Fund, supported with registration fees and civil penalties. Requires fees to be set in amounts sufficient to support the annual appropriation approved by the Legislature. Authorizes the Department of Finance to approve a short-term loan from AB 1978 Page 4 the Labor and Workforce Development Fund to cover up to 50% of administrative costs in a fiscal year, if necessary for cash flow purposes, as specified. 10)Requires DIR to develop standards and procedures for implementing the requirements of this bill, as specified, by July 1, 2017. 11)Requires, after February 1, 2018, DIR's website to include a regularly updated, searchable database of registered covered employers as well as 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. FISCAL EFFECT: The Department of Industrial Relations estimates costs of $3.2 million initially and approximately $2 million ongoing. These costs will be offset by the $1,000 registration fee and civil penalties proposed in the bill. It is difficult to estimate how many employers would be required to register and if the fees generated would fully cover the costs of the program. DIR has the authority to increase fees if necessary. COMMENTS: 1)Purpose. This bill, sponsored by SEIU California, addresses issues raised by a UC Berkeley Labor Center report on working conditions in the property services industry. The report found conditions in the property services industry that make workers AB 1978 Page 5 more vulnerable to sexual harassment, sexual violence, and wage theft. Among those factors, isolation in particular increases the vulnerability to sexual assault. Supporters state it is clear that the property services industry is in need of regulation in order to protect vulnerable workers. There are five main industries in California that operate almost exclusively through contracting and subcontracting, including construction, garment manufacturing, farm labor, long-term care, and property services. Among these five industries, all have a registry or licensing, except for property services. In recognition that the state has acted to regulate other industries with similar risk factors, similar worker populations, and similar contracted labor, SEIU believes the time has come to similarly regulate the property services industry. 2)Comment. As noted in the fiscal effect, this bill will create significant new workload for DIR. Administrative costs to the DIR include the establishment of a hotline and coordinating communications from workers and concerned parties with the Department of Fair Employment and Housing and the National Human Trafficking Center. Significant one-time resources are needed to establish a registry for janitorial employers. Ongoing support would also be needed to support staff to run the registration, review documents, and conduct audits. The bill would also require the DIR to create training materials to educate workers and supervisors about a comprehensive series of issues affecting janitorial workers. DIR would likely contract with a provider to help develop such materials. Additional resources are needed for DIR to convene an ongoing advisory group and to help administer labor compliance programs. Fees in the bill are intended to fully cover these administrative costs. 3)Opposition. The California Chamber of Commerce opposes this bill. The opposition is concerned that the bill proposes unprecedented standards that 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 AB 1978 Page 6 encourage unlawful actors to continue to operate in the underground economy, as the cost of compliance is too high. They state the enforcement mechanism and penalties proposed in the bill are overly punitive and unprecedented. Analysis Prepared by:Misty Feusahrens / APPR. / (916) 319-2081