BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | AB 1978| |Office of Senate Floor Analyses | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- THIRD READING Bill No: AB 1978 Author: Gonzalez (D), et al. Amended: 6/22/16 in Senate Vote: 21 SENATE LABOR & IND. REL. COMMITTEE: 4-1, 6/29/16 AYES: Mendoza, Jackson, Leno, Mitchell NOES: Stone SENATE APPROPRIATIONS COMMITTEE: 5-2, 8/11/16 AYES: Lara, Beall, Hill, McGuire, Mendoza NOES: Bates, Nielsen ASSEMBLY FLOOR: 51-23, 6/2/16 - See last page for vote SUBJECT: Employment: property service workers SOURCE: Equal Rights Advocates Service Employees International Union DIGEST: This bill creates a registration process for janitorial employers and requires sexual harassment and violence prevention training for janitorial workers. ANALYSIS: Existing law: 1) Prohibits an employer, labor organization, employment agency, apprenticeship training program or any training AB 1978 Page 2 program leading to employment, from harassing an employee, an applicant, an unpaid intern or volunteer, or a person providing services pursuant to a contract by an employee. (Government Code §12940(j)) 2) Establishes the Displaced Janitor Opportunity Act, which requires that a successor contractor retains employment of the predecessor contractor's employees for a 60-day transition period. (Labor Code §§1060-1065) This bill creates the Property Services Workers Protection Act, which seeks to protect janitorial employees from wage theft and sexual harassment. 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 "covered 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. This includes successor employers. 3) Contains related legislative findings, declarations and statements of intent. Workplace Sexual Violence and Sexual Harassment 4) Requires the Division of Labor Standards Enforcement (DLSE), no later than January 1, 2018, to do all of the following: AB 1978 Page 3 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. DLSE 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 annually. 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 three years of experience conducting adult education with non-English speakers with a reading ability at or below the fifth grade level in the language spoken at home. 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) Require employers to post and display prominently a notice, developed by the DLSE and posted on its Web site, that informs covered workers of their rights under the sexual harassment and human trafficking laws, contain examples of illegal employer conduct, and provide the contact information for local resources to assist those AB 1978 Page 4 who have experienced sexual harassment and human trafficking. f) Appoint, along with the Division of Occupational Safety and Health, an advisory group of stakeholders to assist them in carrying out their respective responsibilities under this bill. The advisory group must include representatives from at least one nonprofit organization that advocates for policies and standards to prevent workplace sexual violence and harassment in the janitorial industry, and from a labor organization that represents covered workers. g) Issue such regulations as are necessary to carry out this bill. 5) Requires the Occupational Safety and Health Standards Board, no later than July 1, 2018, 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. 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 DLSE. 7) Provides that, in order to qualify for a certificate of registration or renewal, an employer shall: a) Beginning January 1, 2018, register with DLSE and pay an initial application fee of $500 and an annual renewal AB 1978 Page 5 fee of $500. b) Execute a written application, under penalty of perjury, that contains specified information, including an oath that the employer shall follow all applicable federal, state, and local laws. c) Provide evidence, disclosures, or releases under penalty of perjury, as are necessary to establish specified information, including proof of workers' compensation coverage and if the employer is liable for any delinquent liabilities, which includes unpaid wages and arbitration awards due to sexual harassment, including interest, fines, and penalties. 8) Establishes specified posting and recordkeeping requirements for covered employers. 9) Provides that DLSE shall not grant registration or renewal of registration to specified employers, including lacking workers' compensation coverage, making false statements or has not submitted the necessary application information, or has a delinquent liability to the state or a worker. 10)Authorizes DLSE to revoke, suspend, or place a registration on probation if specified requirements are met, including failing to maintain a bond for payment of a delinquent liability. Enforcement AB 1978 Page 6 11)Requires DLSE to establish a Property Services Compliance Unit to enforce the requirements of this bill. 12)Establishes civil penalties of $2,500 for failing to have a current and valid registration or violating the provisions of this act. 13)Establishes additional civil penalties against any employer that has been previously assessed civil penalties to an additional penalty of one hundred dollars ($100) for each calendar day that the employer conducts business in violation of Act, not to exceed one hundred thousand dollars ($100,000). 14)Authorizes DLSE to issue a stop order against an employer that is conducting business without a valid registration, and establishes criminal penalties for an employer that fails to observe a stop order. 15)Establishes the State Janitorial Contractor Registration 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. 16)Permits DLSE to audit employers in order to ensure compliance with this Act. AB 1978 Page 7 Online Posting of Janitorial Contractor Registry and Database 17)Provides that, after February 1, 2018, the Department of Industrial Relations (DIR) Web site 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 10 years, and will include specified information. 18)Provides that after July 1, 2018, DIR's Web site 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. Fair Employment and Housing Act (FEHA) Protections 19)Extends FEHA liability due to sexual harassment or violence by a janitorial employer or supervisor to a person or entity who contracts or subcontracts with a janitorial employer who lacks a current or valid registration. 20)Creates a presumption that a person or entity that contracts with a janitorial employer who has a current and valid registration is not liable for a FEHA violation due to sexual harassment or violence by a janitorial employer or supervisor against a janitorial worker. AB 1978 Page 8 FISCAL EFFECT: Appropriation: No Fiscal Com.:YesLocal: Yes According to the Senate Appropriations Committee, the DIR estimates that it would incur initial costs of $3.5 million and ongoing costs of $2.3 million to implement the provisions of this bill (special fund). These costs would be somewhat offset by this bill's proposed registration fee and civil penalties. It is difficult to estimate how many employers would be required to register and whether the fees generated would fully cover the costs of the program. DIR has the authority to increase fees if necessary. SUPPORT: (Verified8/12/16) Equal Rights Advocates (co-source) Service Employees International Union (co-source) Alliance San Diego Black Community Clergy and Labor Alliance Black Immigration Network California Democratic Party - African American Caucus California Domestic Workers Coalition California Employment Lawyers Association California Immigrant Policy Center California Labor Federation Carecen Clean Car Wash Campaign Clergy and Laity United for Economic Justice Coalition for Humane Immigrant Rights of Los Angeles Creating Justice LA East Bay Alliance for a Sustainable Economy Faith Alliance for a Moral Economy Holy Faith Episcopal Church Instituto de Educación Popular del Sur de California Jewish Labor Committee Los Angeles Airport Peace Officers Association Los Angeles Alliance for a New Economy Los Angeles County Federation of Labor Los Angeles Urban League AB 1978 Page 9 Methodist Federation for Social Action Multi-Faith ACTION Coalition National Action Network National Action Network Los Angeles North County Immigration Task Force Pacoima Beautiful Peace Over Violence Pilgrim United Church of Christ, Board of Social Justice PODER Restaurant Opportunities Center - Los Angeles San Diego Immigrant Rights Consortium San Francisco Living Wage Coalition SEIU Local 99 Southern Christian Leadership Conference The Row LA - Church Without Walls - Skid Row Ministries Unitarian Universalist Justice Ministry of California Unitarian Universalist Refugee & Immigrant Services & Education United Domestic Workers- AFSCME Local 3930 Us Organization Workers United Western States Regional Board OPPOSITION: (Verified8/12/16) Building Owners and Managers Association California Business Properties Association California Chamber of Commerce CAWA - Representing the Automotive Parts Industry International Council of Shopping Centers NAIOP - Commercial Real Estate Development Association National Federation of Independent Business Pacific Association of Building Service Contractors ARGUMENTS IN SUPPORT: The proponents note the findings of the recent report by the University of California, Berkeley Labor Center reported on the conditions in the property services industry. Specifically, the sponsor points to the report's survey, which found that 32 percent of workers in the property services industry were paid less than the minimum wage, and that 80 percent of workers were not paid the legally required overtime. Noting the report's finding that the property service industry has specific risk factors that make workers more AB 1978 Page 10 vulnerable to sexual harassment and violence, the proponents believe that additional workplace protections are necessary to protect workers in the janitorial industry. The proponents note that existing law already provides a registration process for other high hazard industries, such as farm labor contracting and garment manufacturing. Proponents believe that, by combining a registration process with sexual harassment and violence training and posting requirements to notify workers of their rights, AB 1978 will make significant progress in protecting vulnerable workers from sexual harassment, sexual violence, and other forms of exploitation. ARGUMENTS IN OPPOSITION: The California Chamber of Commerce and other opponents have taken an oppose unless amended position to AB 1978 (Gonzalez). First, the opponents note that the author has addressed their past concerns through amendments, and they appreciate the author's efforts to work with them on these issues. However, the opponents argue that AB 1978 includes other unprecedented standards that exceed the need to address issues in the underground economy, including penalties and suspension of a company's registration for poster and notice violations as well as stop orders. The opponents believe that the provisions in AB 1978 are so extreme that it will encourage unlawful actors to continue to participate in the underground economy, as the cost of compliance is too high. Opponents note that they are hopeful that they will be able to resolve these outstanding concerns with the author. ASSEMBLY FLOOR: 51-23, 6/2/16 AYES: Alejo, Arambula, Atkins, Bloom, Bonilla, Bonta, Brown, Burke, Calderon, Campos, Chau, Chiu, Chu, Cooley, Cooper, Dababneh, Daly, Dodd, Eggman, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gray, Roger Hernández, Holden, Irwin, Jones-Sawyer, Levine, Linder, Lopez, Low, McCarty, Medina, Mullin, Nazarian, O'Donnell, Quirk, Ridley-Thomas, Rodriguez, Salas, Santiago, Mark Stone, Thurmond, Ting, Weber, Williams, Wood, Rendon NOES: Achadjian, Travis Allen, Baker, Brough, Chang, Chávez, Dahle, Gallagher, Grove, Harper, Jones, Kim, Lackey, Maienschein, Mathis, Mayes, Melendez, Obernolte, Olsen, Patterson, Steinorth, Wagner, Wilk AB 1978 Page 11 NO VOTE RECORDED: Bigelow, Frazier, Beth Gaines, Gordon, Hadley, Waldron Prepared by:Gideon L. Baum / L. & I.R. / (916) 651-1556 8/15/16 20:17:24 **** END ****