BILL ANALYSIS                                                                                                                                                                                                    ”



                             SENATE JUDICIARY COMMITTEE
                         Senator Hannah-Beth Jackson, Chair
                             2015-2016  Regular  Session


          AB 2261 (Roger HernŠndez)
          Version: June 14, 2016
          Hearing Date:  June 28, 2016
          Fiscal: Yes
          Urgency: No
          ME


                                        SUBJECT
                                           
                  Division of Labor Standards Enforcement:  duties

                                      DESCRIPTION  

          This bill would authorize the Division of Labor Standards  
          Enforcement (DLSE) to, with or without receiving a complaint  
          from an employee, commence an investigation of an employer that  
          it suspects to have discharged or otherwise discriminated  
          against an individual in violation of any law under the  
          jurisdiction of the Labor Commissioner.   This bill would  
          require the assigned investigator to prepare and submit an  
          investigation report to the Labor Commissioner based on its  
          findings.  Moreover, this bill would require the DLSE in  
          investigating employers under this provision, to follow the  
          existing processes and requirements for employee initiated cases  
          of unlawful discharge or discrimination.  

                                      BACKGROUND  

          California has a strong public policy to protect workers against  
          discrimination, discharge, retaliation or any other adverse  
          action by their employer if the employee is attempting to  
          exercise their employment rights.  For example, an employer  
          cannot retaliate or take any adverse action against an employee  
          if that employee made a complaint that he or she was owed unpaid  
          wages.  A person who believes that he or she has been terminated  
          or otherwise discriminated against in violation of any law under  
          the jurisdiction of the Labor Commissioner can file a complaint  
          with the Division of Labor Standards and Enforcement and have  
          that complaint investigated.  

          One population that is hesitant to file complaints against  
          employers is undocumented Californians.  In California, there  
          are approximately 2.6 million undocumented individuals.  (Cho  








          AB 2261 (Roger HernŠndez)
          PageB of? 

          and Smith, Workers' Rights on ICE:  How Immigration Reform Can  
          Stop Retaliation and Advance Labor Rights, National Employment  
          Law Project (Feb. 2013)  
           [as of June 18, 2016],  
          p. 2.)  "Most undocumented immigrants work in traditionally  
          low-wage occupations such as agriculture, construction,  
          manufacturing, and service industries, where workers face the  
          greatest risk for exploitation.  Undocumented workers are far  
          more likely to experience violations of wage and hour laws."   
          (Id.)  Many undocumented workers do not file claims against  
          their employers out of fear of "'getting in trouble' or being  
          fired."  (Id.) Undocumented workers also do not bring claims  
          against employers out of fear of having their status being  
          reported to immigration or law enforcement.  (Id. at pp. 2-3.)
          Accordingly, this bill would authorize the Division of Labor  
          Standards Enforcement to, with or without receiving a complaint  
          from an employee, commence an investigation of an employer that  
          it suspects to have discharged or otherwise discriminated  
          against an individual in violation of any law under the  
          jurisdiction of the Labor Commissioner.  

                                CHANGES TO EXISTING LAW
           
           Existing law  provides that a person shall not discharge an  
          employee, or in any manner discriminate, retaliate, or take any  
          adverse action against any employee or applicant for employment  
          because:
           the employee or applicant engaged in protected conduct, as  
            specified;
           the employee or applicant for employment filed a bona fide  
            complaint or claim or instituted or caused to be instituted  
            any proceeding under or relating to his or her rights that are  
            under the jurisdiction of the Labor Commissioner;
           made a written or oral complaint that he or she is owed unpaid  
            wages;
           the employee has initiated any action or notice pursuant to  
            the Labor Code Section 2699, or has testified or is about to  
            testify in a proceeding pursuant to that section;
           the employee or applicant for employment exercised on behalf  
            of himself, herself, or others any rights afforded him or her.  
             (Lab. Code Sec. 98.6(a).)

           Existing law  authorizes, in addition to any other remedies  









          AB 2261 (Roger HernŠndez)
          PageC of? 

          available, a civil penalty, not to exceed $10,000 per employee  
          for each violation, to be imposed against the employer.  (Lab.  
          Code Sec. 98.6(b)(3).)
          
           Existing law  prohibits employers from withholding an employee's  
          wages and prohibits discrimination, retaliation, and adverse  
          actions by an employer against an employee or job applicant who  
          exercises his or her rights under the law.  (Lab. Code Sec. 200  
          et seq.)  

           Exiting law  provides that any person who believes that he or she  
          has been discharged or otherwise discriminated against in  
          violation of any law under the jurisdiction of the Labor  
          Commissioner may file a complaint with the division, as  
          specified.  The complaint shall be investigated, as specified.   
          (Lab. Code Sec. 98.7(a)(1).)

           This bill  would authorize the Division of Labor Standards  
          Enforcement to, with or without receiving a complaint from an  
          employee, commence an investigation of an employer that it  
          suspects to have discharged or otherwise discriminated against  
          an individual in violation of any law under the jurisdiction of  
          the Labor Commissioner.  
          
          
           
          This bill  would require the assigned investigator to prepare and  
          submit an investigation report to the Labor Commissioner based  
          on its findings. 

           This bill  would require the DLSE in investigating employers  
          under this provision, to follow the existing processes and  
          requirements for employee initiated cases of unlawful discharge  
          or discrimination. 

                                        COMMENT
           
          1.    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 Labor Commissioner.  The Labor  









          AB 2261 (Roger HernŠndez)
          PageD of? 

             Commissioner currently lacks the authority to  
             independently cite an employer for retaliation.  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, risking further retaliation by the  
             employer.

             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 runs rampant.  In 2014, the Labor 
             Commissioner received 3,800 complaints of employer  
             retaliation.  Retaliation claims filed with the Labor  
             Commissioner have increased by 48 percent from 2011 to  
             2014, an increase of 16 percent per year.  In reality,  
             this figure represents only a fraction of the true picture  
             because it only represents those brave workers who were  
             courageous enough to come forward and file a claim with  
             the Labor Commissioner.

             Immigrant workers are particularly vulnerable to employer  
             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."

             ------------------------
          <1> (Cho and Smith, Workers' Rights on ICE:  How Immigration  
          Reform Can Stop Retaliation and Advance Labor Rights, National  
          Employment Law Project (Feb. 2013)  
           [as of June 18, 2016])









          AB 2261 (Roger HernŠndez)
          PageE of? 

             Currently, in order to pursue an administrative claim for  
             retaliation, a worker must come forward and file a claim  
             with the Labor Commissioner.  The Labor Commissioner does  
             not have the authority to independently cite an employer  
             for retaliation, even if the Labor Commissioner, for  
             example, comes across evidence of retaliation during an  
             investigation of the Bureau of Field Enforcement (BOFE).

             AB 2261 will simply provide the Labor Commissioner with  
             the authority to independently cite an employer for  
             unlawful retaliation.

          2.   Opposition Concerns  

          Writing in opposition, the California Chamber of Commerce and a  
          number of organizations write:

             Currently, Labor Code Section 98.7 sets forth a detailed  
             process regarding how employee complaints for alleged  
             retaliation are handled by the Labor Commissioner.  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.  While recent  
             amendments to AB 2261, appear to incorporate time  
             restrictions regarding events that may be considered for  
             purposes of retaliation, the bill still allows the Labor  
             Commissioner to unilaterally initiate an investigation of  
             an employer, even when no employee has submitted a  
             complaint.  We are concerned with the potential  
             harassment, disruption, and strain this will impose on  
             employers to be constantly subjected to random  
             investigations for alleged retaliation.

             Moreover, the Labor Code already provides numerous  
             anti-retaliation provisions that specifically protect an  
             employee against any adverse employment action for  
             exercising their rights under the Labor Code.  

          3.   Holding all employers accountable to comply with state laws  
          regardless of who they employ
           
          It is in the interest of all California businesses for  
          California's labor laws to be enforced.  Millions of  









          AB 2261 (Roger HernŠndez)
          PageF of? 

          Californians are living without lawful status because Congress  
          has failed to pass comprehensive immigration reform.  Fear of  
          deportation stops some undocumented Californians from filing  
          complaints with the Department of Labor Standards Enforcement  
          (DLSE) against employers that violate their labor rights.   
          Writing in support, the California Labor Federation, sponsor of  
          this bill writes:

             When workers complain about working conditions or try to  
             organize a union, employers often respond by retaliating  
             against them.  Workers who speak out against these 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.
             . . .
             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 Labor Commissioner's office.   
             Currently the Labor Commissioner does not have all the  
             tools she needs to ensure that she can protect workers  
             from retaliation when investigating other wage and hour  
             violations.

             AB 2261 will allow the Labor Commissioner to investigate  
             and directly cite employers for retaliation with or  
             without a worker complaint.  The Labor Commissioner,  
             CalOSHA and the Division of Workers' Compensation already  
             have similar authority for various meal and rest period  
             violation, wage theft violations, overtime violations,  
             health and safety violations, or workers compensation  
             violations.

          When nefarious employers steal the wages of undocumented workers  
          or retaliate against workers who speak out against workplace  
          abuses, the employers' businesses are subsidized by reduced cost  
          labor.  Employers that operate in compliance with state labor  
          laws and do not engage in wage theft or retaliation are  
          disadvantaged when they have to compete with businesses that  
          take advantage of fearful workers.  Accordingly, in an effort to  
          hold employers accountable when employees are unwilling to file  
          complaints with the DLSE, this bill would authorize the DLSE to,  









          AB 2261 (Roger HernŠndez)
          PageG of? 

          with or without receiving a complaint from an employee, commence  
          an investigation of an employer that it suspects to have  
          discharged or otherwise discriminated against an individual in  
          violation of any law under the jurisdiction of the Labor  
          Commissioner.  


           Support  :  California Immigrant Policy Center; California  
          Professional Firefighters; California Rural Legal Assistance  
          Foundation; California Teamsters Public Affairs Council

           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 Chapters of the  
          National Electrical Contractors Association (NECA); California  
          Citrus Mutual; California Farm Bureau Federation; California  
          Fence Contractors Association; California Fresh Fruit  
          Association; California Grocers Association; California League  
          of Food Processors; California Legislative Council of the  
          Plumbing, Heating and Piping Industry (CLC); 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; United Contractors; Western Carwash Association;  
          Western Plant Health Association; Wine Institute

                                        HISTORY
           
           Source  :  California Labor Federation, AFL-CIO (sponsor)

           Related Pending Legislation  :  None Known

           Prior Legislation  :

          AB 2751 (HernŠndez, Chapter 79, Statutes of 2014), among other  
          things, clarified that civil penalties against an employer who  
          discriminates, retaliates, or takes adverse action against any  
          employee or job applicant who has engaged in prescribed  









          AB 2261 (Roger HernŠndez)
          PageH of? 

          protected conduct are awarded to the employee or employees who  
          suffered the violation.

          SB 666 (Steinberg, Chapter 577, Statutes of 2013), among other  
          things, made it unlawful for an employer to retaliate or take  
          any adverse action against an employee who makes a written oral  
          complaint that he or she is owed unpaid wages and prohibited any  
          person acting on behalf of the employer from retaliating against  
          an employee for disclosing information to a government or law  
          enforcement agency.

          AB 263 (HernŠndez, Chapter 732, Statutes of 2013), among other  
          things, prohibited an employer or any other person or entity  
          from engaging in unfair immigration-related practices, as  
          defined, for the purpose of retaliation against any person who  
          exercises any rights under the Labor Code.  AB 263 also  
          clarified that an employer is prohibited from discriminating,  
          retaliating, or taking adverse action against an employee or job  
          applicant who has engaged in prescribed protected conduct  
          relating to the enforcement of the employee's or applicant's  
          rights, provided up to a $10,000 penalty for violations thereof,  
          and specified that an employee is not required to exhaust  
          administrative remedies or procedures to enforce this  
          prohibition.

           Prior Vote  :

          Assembly Floor (Ayes 49, Noes 31)
          Assembly Appropriations Committee (Ayes 14, Noes 6)
          Assembly Labor and Employment Committee (Ayes 5, Noes 2)

                                   **************