BILL ANALYSIS                                                                                                                                                                                                    ”

                                                                    AB 2261

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          Date of Hearing:  April 20, 2016


                               Roger HernŠndez, Chair

          AB 2261  
          (Roger HernŠndez) - As Introduced February 18, 2016

          SUBJECT:  Division of Labor Standards Enforcement:  duties

          SUMMARY:  Authorizes the Division of Labor Standards Enforcement  
          (DLSE), in addition to receiving employee complaints for  
          retaliation, to, with or without receiving a complaint from an  
          employee, commence an investigation, issue a citation, or bring  
          an action against an employer who discharges or otherwise  
          discriminates against an individual in violation of any law  
          under the jurisdiction of the Labor Commissioner (LC).

          EXISTING LAW:

          1)Prohibits an employer from discharging, discriminating or  
            retaliating against an employee for engaging in specified  
            protected activity, or for filing a claim related to his or  
            her rights that are under the jurisdiction of the LC.  (Labor  
            Code Section 98.6).

          2)Authorizes any person who believes that he or she has been  


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            discharged or otherwise discriminated against in violation of  
            any law under the jurisdiction of the LC to file a complaint,  
            as specified, with the DLSE.

          3)Provides that in the enforcement of these provisions, there is  
            no requirement that an individual exhaust administrative  
            remedies or procedures.

          FISCAL EFFECT:  Unknown

          COMMENTS:  Although certain provisions of law contain their own  
          anti-retaliation provisions, two specific provisions of the  
          California Labor Code provide general protection against  
          retaliation for engaging in certain protected activity.

          Existing Labor Code Section 98.6 prohibits an employer from  
          discharging, retaliating, or taking other adverse employment  
          action against an employee because the employee has engaged in  
          protected conduct, as specified, such as filing a complaint or  
          claim with the Labor Commissioner.

          The Labor Code also contains a "whistleblower" statute (Labor  
          Code Section 1102.5) which prohibits an employer from  
          retaliating against an employee for disclosing information to a  
          government or law enforcement agency, or to others, or for  
          participating in an investigation or hearing, if the employee  
          has reasonable cause to believe that the information discloses a  
          violation of or noncompliance with existing law.

          Claims alleging retaliation may be pursued via a civil action or  


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          by filing and administrative claim with the Labor Commissioner.   
          The LC currently lacks the authority to file an independent  
          citation alleging that an employer has unlawfully retaliated  
          against an employee or employees.


          Retaliation - An Ongoing Concern

          California law contains a strong public policy to protect  
          employees from retaliation for exercising their rights.  This is  
          an acknowledgement of the fact that substantive labor and  
          employment laws are meaningless if workers are reluctant to  
          exercise their rights for fear of employer retaliation.

          Despite this strong public policy and several existing statutes  
          that prohibit such retaliation, employer retaliation continues  
          to be of concern.  In 2014, the LC received 3,800 complaints of  
          employer retaliation.  Retaliation claims filed with the LC have  
          increased by 48 percent from 2011 to 2014, an increase of 16  
          percent per year.  

          In reality, this figure likely represents only a fraction of the  
          true picture because it only represents those brave workers who  
          were courageous enough to come forward a file a claim with the  
          Labor Commissioner.

          In acknowledgement of the increase in retaliation claims and the  
          importance of this issue, the Governor's current budget proposal  
          requests 19.5 additional positions for the Labor Commissioner's  
          Retaliation Complaints Investigation (RCI) unit.

          Immigrant workers are particularly vulnerable to employer  


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          retaliation and abuse.  A 2013 report<1> by the National  
          Employment Law Project (NELP) stated, "Silencing or intimidating  
          a large percentage of workers in any industry means that workers  
          are hobbled in their efforts to protect and improve their jobs.   
          As long as unscrupulous employers can exploit some low-wage  
          workers with impunity, all low-wage workers suffer compromised  
          employment protections and economic security.   Law-abiding  
          employers are forced to compete with illegal practices,  
          perpetuating low-wages in a whole host of industries."

          Stated Need for the Bill

          According to the author, under existing law, in order to pursue  
          an administrative claim for retaliation, an employee must come  
          forward and file a claim with the LC.  The LC currently does not  
          have the authority to independently cite an employer for  
          retaliation, even if the LC, for example, comes across evidence  
          of retaliation during an investigation by the Bureau of Field  
          Enforcement (BOFE).

          This can be a particular barrier in retaliation cases, since the  
          employee complaint model forces an employee who has already been  
          retaliated against to come forward and individually complain,  
          often risking further retaliation by the employer.

          According to the author, this bill will simply provide the LC  
          with the authority to independently cite an employer for  
          unlawful retaliation.



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          Arguments in Support

          This bill is sponsored by the California Labor Federation,  
          AFL-CIO, who argues that workers who speak out against common  
          workplace abuses face reduced hours, harassment, and termination  
          as a means of intimidating other workers from coming forward.   
          Just as important, many workers never make complaints in the  
          first place, often because they fear retaliation by their  
          employer.  A NELP study of immigrant hotel workers, Workers'  
          Rights on ICE, found that only 20% of those who had experienced  
          work-related pain had filed workers' compensation claims for  
          fear of getting "in trouble" or being fired.

          The sponsor argues that, as long as unscrupulous employers can  
          retaliate against workers by disciplining, demoting, or firing  
          them for voicing concerns about wages and workplace safety  
          issues with impunity, labor laws will go unenforced and all  
          workers will suffer. Furthermore, good employers are forced to  
          compete against bad actors that perpetuate low-wages and illegal  

          Over the last few years, California has implemented new laws to  
          increase worker protections against retaliation.  None of these  
          reforms are meaningful if workers cannot enforce them. Most  
          low-wage workers rely on the LC's office.  Currently, the LC  
          does not have all the tools she needs to ensure that she can  
          protect workers from retaliation when investigating other wage  
          and hour violations.

          The sponsor states that this bill will strengthen the ability of  
          the LC to enforce retaliation laws in the most efficient way.   
          This increases protection for the most vulnerable in  


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          California's workforce and helps to level the playing field for  
          employers who follow the rules.

          Arguments in Opposition

          Opponents, including the California Chamber of Commerce, express  
          the following concerns with the bill:

            "Currently, Labor Code Section 98.7 sets forth a detailed  
            process regarding how employee complaints for alleged  
            retaliation are handled by the LC.  These procedures have  
            safeguards for all parties involved to ensure that there is  
            adequate opportunity to present evidence in a timely and  
            efficient manner and pursue an appeal or litigation if  
            necessary.  We are concerned with the language proposed in  
            [this bill] as it appears to eliminate the procedures and time  
            limitations set forth in Labor Code Section 98.7 and subject  
            employers to a constant threat of citation, investigation or  
            litigation for alleged discrimination and retaliation.  

            We appreciate the author's intent to protect employees from  
            retaliation in the workplace as well as his willingness to  
            work with the employer community on this issue.  We are  
            hopeful that, through further discussions, we may develop  
            amendments that create a balance between employers' concerns  
            and employee protections."


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          California Immigrant Policy Center

          California Labor Federation, AFL-CIO (sponsor)

          California Professional Firefighters

          California Rural Legal Assistance Foundation


          Acclamation Insurance Management Services
          African American Farmers of California
          Allied Managed Care 
          Associated Builders and Contractors of California
          Associated General Contractors
          California Association of Winegrape Growers
          California Chamber of Commerce
          California Chapter American Fence Association
          California Citrus Mutual
          California Farm Bureau Federation


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          California Fence Contractors Association
          California Fresh Fruit Association
          California Grocers Association
          California League of Food Processors
          California Newspaper Publishers Association
          California Pool and Spa Association
          California Restaurant Association
          California Retailers Association
          California Trucking Association
          Coalition of Small and Disabled Veteran Business
          CSAC Excess Insurance Authority
          Family Business Association
          Flasher Barricade Association
          League of California Cities
          Nisei Farmers League
          Western Carwash Association
          Western Plant Health Association
          Wine Institute

          Analysis Prepared by:Ben Ebbink / L. & E. / (916) 319-2091