BILL ANALYSIS Ó AB 2261 Page A Date of Hearing: April 20, 2016 ASSEMBLY COMMITTEE ON LABOR AND EMPLOYMENT Roger Hernández, Chair AB 2261 (Roger Hernández) - 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 AB 2261 Page B 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 AB 2261 Page C 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 AB 2261 Page D 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. --------------------------- <1> http://www.nelp.org/page/-/Justice/2013/Workers-Rights-on-ICE-Ret aliation-Report-California.pdf?nocdn=1 AB 2261 Page E 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 practices. 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 AB 2261 Page F 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." AB 2261 Page G REGISTERED SUPPORT / OPPOSITION: Support California Immigrant Policy Center California Labor Federation, AFL-CIO (sponsor) California Professional Firefighters California Rural Legal Assistance Foundation Opposition 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 AB 2261 Page H 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