BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    AB 1978


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          Date of Hearing:  May 11, 2016


                        ASSEMBLY COMMITTEE ON APPROPRIATIONS


                               Lorena Gonzalez, Chair


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


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          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:










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             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.








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          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  








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            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  








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            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  








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            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