BILL ANALYSIS Ó AB 1978 Page 1 ASSEMBLY THIRD READING AB 1978 (Gonzalez) As Amended May 31, 2016 Majority vote ------------------------------------------------------------------ |Committee |Votes|Ayes |Noes | | | | | | | | | | | | | | | | |----------------+-----+----------------------+--------------------| |Labor |5-2 |Roger Hernández, Chu, |Patterson, Linder | | | |McCarty, O'Donnell, | | | | |Thurmond | | | | | | | |----------------+-----+----------------------+--------------------| |Appropriations |14-6 |Gonzalez, Bloom, |Bigelow, Chang, | | | |Bonilla, Bonta, |Gallagher, Jones, | | | |Calderon, Daly, |Obernolte, Wagner | | | |Eggman, Eduardo | | | | |Garcia, Roger | | | | |Hernández, Holden, | | | | |Quirk, Santiago, | | | | |Weber, Wood | | | | | | | | | | | | ------------------------------------------------------------------ SUMMARY: Enacts a number of requirements related to the janitorial industry. Specifically, this bill: AB 1978 Page 2 1)Defines "covered worker" to mean a janitor, including any individual predominantly working, whether as an employee, independent contractor, or a franchisee, as a janitor. "Covered workers" does not include any individual whose work duties are predominantly the final cleanup of debris, grounds, and buildings near the completion of a construction, alteration, demolition, installation or repair work project. 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 Labor Commissioner (LC), no later than January 1, 2018, to do all of the following: a) Develop worker and supervisor agendas, handouts, trainer guides, and other materials for a four-hour training regarding sexual violence and sexual harassment and other specified information. The LC shall provide these materials in all languages that are the language spoken at home of at least 2,000 janitors who reside in the state, and shall update these materials on or before July 1 of each year b) Establish minimum qualification standards for trainers who may deliver such training, including but not limited to, a minimum of five 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. AB 1978 Page 3 c) Develop a specified notice to be posted by employers, as specified. 4)Requires employers, on and after July 1, 2018, to: a) Have a system to require all covered workers and supervisors to, at least annually, receive in-person training lasting at least four hours regarding workplace sexual violence and sexual harassment, as specified. b) Maintain accurate records for at least three years documenting training, as specified. c) Post and prominently display a specified notice. 5)Requires the LC and the Division of Occupational Safety and Health to appoint an advisory group of stakeholders, as specified, to assist in carrying out their respective responsibilities under this bill 6)Requires the Occupational Safety and Health Standards Board (Standards Board), no later than January 1, 2018, in consultation with the advisory group, 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 workplace sexual violence and sexual harassment, and that includes specified elements. 7)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 require an employer subject to this bill, or any other employer, to adopt a workplace violence or harassment AB 1978 Page 4 prevention plan that includes elements or requirements additional to, or broader in scope than, those described in this bill. Registration of Janitorial Contractors 8)Requires the LC, on and after January 1, 2018, to maintain an online registration system of employers. 9)Provides that on and after July 1, 2018, no employer may conduct any janitorial business without a current and valid registration and all employers must be registered with the LC. 10)Provides that, on and after January 1, 2018, in order to qualify for a certificate of registration or renewal, an employer shall: a) Register online with the LC 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) Execute a written report that provides evidence or disclosures under penalty of perjury as are necessary to establish specified information. 11)Establishes specified posting and recordkeeping requirements for covered employers. 12)Provides that the LC shall not grant registration or renewal of registration to any employer who meets specified criteria. AB 1978 Page 5 13)Requires the LC to suspend a registration if specified criteria are met. 14)Authorizes the LC to suspend a registration if specified requirements are met. 15)Specifies the conditions under which the LC may reissue a registration after suspension. 16)Requires the LC to establish a Property Services Compliance Unit to enforce the requirements of this bill. 17)Establishes specified civil penalties. 18)Authorizes the LC, as specified, to issue a stop order against an employer that is conducting business without a current and valid registration. 19)Authorizes the LC to select employers as audit subjects for the purpose of determining compliance with this bill, as specified. 20)Establishes specified criminal penalties for an employer that conducts any janitorial business after its registration has been suspended, revoked, or denied reissuance. 21)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 AB 1978 Page 6 registration of janitorial contractors and the administration and enforcement of the requirements of this bill. Online Posting of Janitorial Contractor Registry and Database 22)Provides that, after July 1, 2018, the LC shall maintain a regularly updated, searchable online database of all registered employers. The database will have the capability to search all data for at least the past ten years, and will include specified information. 23)Provides that after July 1, 2019, the LC shall maintain a searchable online 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. Other Provisions 24)Provides that for purposes of specified provisions of existing law dealing with whistleblowers, "employee" includes any covered worker as defined in this bill. 25)Provides that, on and after July 1, 2018, for purposes of provisions of the Fair Employment and Housing Act dealing with harassment, any person or entity that contracts with a janitorial employer who lacks a current and valid registration is an "employer" for purposes of those harassment provisions. A person or entity that contracts with a janitorial provider who has a current and valid registration is presumed not to be an "employer" for such purposes. AB 1978 Page 7 26)Contains related legislative findings, declarations and statements of intent. FISCAL EFFECT: According to the Assembly Appropriations Committee, the Department of Industrial Relations estimates costs of $3.2 million initially and approximately $2.0 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: This bill establishes various requirements for the janitorial industry, including a registration requirement and protections against workplace sexual violence and harassment. 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. This bill is sponsored by SEIU California. They and other supporters of the bill argue that a recent report by the University of California, Berkeley, Labor Center reported on the conditions in the property services industry. The report noted a survey which found that 32% of workers in the property services industry were paid less than minimum wage, and 80% 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% of contracted janitors were born outside the United States. 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. They argue that the state has acted to regulate other industries with similar risk AB 1978 Page 8 factors, similar worker populations, and similar contracted labor. They believe the time has come to similarly regulate the property services industry. 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. CalChamber also argues that the enforcement mechanism and penalties proposed in this bill are overly punitive and unprecedented. Finally, CalChamber argues that several of the other provisions of this bill are overbroad, unprecedented, and too onerous. Analysis Prepared by: Ben Ebbink / L. & E. / (916) 319-2091 FN: 0003299 AB 1978 Page 9