BILL ANALYSIS Ó AB 1978 Page 1 CONCURRENCE IN SENATE AMENDMENTS AB 1978 (Gonzalez) As Amended August 19, 2016 Majority vote -------------------------------------------------------------------- |ASSEMBLY: |51-23 |(June 2, 2016) |SENATE: | 35-1 |(August 25, | | | | | | |2016) | | | | | | | | | | | | | | | -------------------------------------------------------------------- Original Committee Reference: L. & E. SUMMARY: Enacts a number of requirements related to the janitorial industry. The Senate amendments revise the bill to: 1)Provide that, effective July 1, 2018 every employer shall register with the Labor Commissioner (LC) annually. 2)Provide that the LC shall collect an initial nonrefundable application fee of $500 and an annual fee of $500, and may periodically adjust the registration fee, in an amount sufficient to fund all direct and indirect costs to administer and enforce this bill. 3)Provide that no employer may conduct any business without complying with the registration requirements of this bill. AB 1978 Page 2 The LC shall have authority to revoke a registration should an employer be found to be out of compliance with any of the requirements of this bill. 4)Provide that the LC may not approve the registration of any employer until specified conditions are satisfied. 5)Provide that the LC may not register or renew the registration of an employer in specified circumstances. 6)Provide that the LC shall maintain a public database of property service employers, on the Web site of the Department of Industrial Relations (DIR), including the name, address, registration number, and effective dates of registration. 7)Provide that an employer who fails to register is subject to a civil fine of $100 for each calendar day, not to exceed $10,000, that the employer is unregistered. 8)Provide that any person or entity that contracts with an employer who lacks a current and valid registration (as displayed on the online registration database) is subject to a civil fine of not less than $2,000 nor more than $10,000 in the case of a first violation, and a civil fine of not less than $10,000 nor more than $25,000 for a subsequent violation. 9)Provide that a successor employer is liable for any wages and penalties its predecessor employer owes to any of the predecessor employer's former employees, if the successor employer meets any of the following criteria: a) Uses substantially the same workforce to offer substantially the same services as the predecessor employer, as specified. b) Shares in the ownership, management, control of the AB 1978 Page 3 labor relations, or interrelations of business operations with the predecessor employer. c) Employs in a managerial capacity any person who directly or indirectly controlled the wages, hours, or working conditions of the affected employees of the predecessor employer. d) Is an immediate family member of any owner, partner, officer, or director of the predecessor employer of any person who had a financial interest in the predecessor employer. 10)Require the LC to establish a biennial in-person sexual violence and harassment prevention training requirement for employees and employers covered by this bill by January 1, 2019. 11)Require the Director of DIR to convene an advisory committee to recommend requirements for the sexual harassment prevention training program. 12)Specify that the advisory committee shall be composed of the Division of Labor Standards and Enforcement, the Division of Occupational Safety and Health, the Department of Fair Employment and Housing and include representatives from a recognized or certified collective bargaining agent that represents janitorial workers, employers, labor-management groups in the janitorial industry, sexual assault victims advocacy groups, and other related subject matter experts. 13)Require the Director of DIR to convene the advisory committee no later than July 1, 2017. 14)Require the LC to propose the requirements for the sexual violence and harassment prevention training requirement no later than January 1, 2018. AB 1978 Page 4 15)Provide that, effective January 1, 2020 all new applications for registration and renewal of registration must complete the sexual violence and harassment prevention training requirements described above. 16)Provide that, as of July 1, 2018 employers covered by this bill shall provide all new and current covered workers a copy of Department of Fair Employment and Housing's pamphlet DFEH-185, "Sexual Harassment" until the sexual violence and harassment prevention training requirement described above is established. 17)Contain other related provisions and procedures. FISCAL EFFECT: According to the Senate Appropriations Committee, DIR estimates that it would incur initial costs of $3.5 million and ongoing costs of $2.3 million to implement the provisions of the bill (special fund). These costs would be somewhat offset by the 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. 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. Supporters of the bill state, 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 AB 1978 Page 5 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 factors, similar worker populations, and similar contracted labor. They believe the time has come to similarly regulate the property services industry. Recent amendments taken in the Senate have removed all opposition to this bill. Analysis Prepared by: Ben Ebbink / L. & E. / (916) 319-2091 FN: 0004855