BILL ANALYSIS                                                                                                                                                                                                    Ó

          |SENATE RULES COMMITTEE            |                       AB 2261|
          |Office of Senate Floor Analyses   |                              |
          |(916) 651-1520    Fax: (916)      |                              |
          |327-4478                          |                              |

                                   THIRD READING 

          Bill No:  AB 2261
          Author:   Roger Hernández (D) 
          Amended:  6/14/16 in Senate
          Vote:     21 

           SENATE LABOR & IND. REL. COMMITTEE:  4-1, 6/22/16
           AYES:  Mendoza, Jackson, Leno, Mitchell
           NOES:  Stone

           SENATE JUDICIARY COMMITTEE:  5-2, 6/28/16
           AYES:  Jackson, Hertzberg, Leno, Monning, Wieckowski
           NOES:  Moorlach, Anderson


           ASSEMBLY FLOOR:  49-31, 6/1/16 - See last page for vote

           SUBJECT:   Division of Labor Standards Enforcement:  duties

          SOURCE:    California Labor Federation

          DIGEST:  This bill authorizes the Division of Labor Standards  
          Enforcement to commence an investigation, with or without  
          receiving a complaint from an employee, 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. 



                                                                    AB 2261  
                                                                    Page  2

          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 Labor  
            Commissioner (LC).  (Labor Code §98.6)

          2)Authorizes 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 LC to file a complaint  
            within six months of the occurrence, as specified, with the  
            Division of Labor Standards Enforcement (DLSE).  (Labor Code  

          3)Entitles employees discharged as a result of such protected  
            activity to reinstatement and reimbursement for lost wages and  
            interest thereon, as well as the payment of reasonable  
            attorney's fees associated with any hearing held in  
            investigating the complaint.  

          4)Establishes timelines for the submittal of such claims to the  
            division, as well as processes to be followed by the LC in  
            investigating these claims, including that of notifying the  
            respondent and employer of the pending investigation within a  
            specified timeframe. 

          5)Provides that in the enforcement of these provisions, there is  
            no requirement that an individual exhaust administrative  
            remedies or procedures before pursuing any other rights and  
            remedies under any other law.

          This bill:
           1)Authorizes the DLSE to, with or without receiving a complaint,  
            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 LC.  

          2)Requires the assigned investigator to prepare and submit an  
            investigation report to the LC based on its findings. 


                                                                    AB 2261  
                                                                    Page  3

          3)Requires the DLSE in investigating employers under this  
            provision, to follow the existing processes and requirements  
            for employee initiated cases of unlawful discharge or  

          California law contains several provisions emphasizing a strong  
          public policy to protect employees against 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. 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. Labor  
          Code §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 LC. The  
          Labor Code also contains a "whistleblower" statute (Labor Code  
          §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  
          by filing an administrative claim with the LC.  However,  
          according to the author, despite these laws providing protection  
          and encouraging the reporting of abuse, the reality is that many  
          workers do not report employer abuse out of fear of losing their  
          jobs. And the LC currently lacks the authority to take action or  
          file an independent citation alleging that an employer has  
          unlawfully retaliated against an employee or employees.  The  
          author believes this bill is necessary to give the DLSE the  
          authority to investigate employers, with or without receiving an  
          employee complaint, it suspects may have unlawfully discharged  
          or discriminated against an employee in violation of the law. 


                                                                    AB 2261  
                                                                    Page  4

          FISCAL EFFECT:   Appropriation:    No          Fiscal  
          Com.:YesLocal:   No

          SUPPORT:   (Verified8/2/16)

          California Labor Federation (source)
          California Faculty Association
          California Immigrant Policy Center
          California Professional Firefighters 
          California Rural Legal Assistance Foundation

          OPPOSITION:   (Verified8/2/16)

          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  
          California Citrus Mutual
          California Farm Bureau Federation
          California Fence Contractors Association
          California Fresh Fruit Association
          California Grocers Association
          California Joint Powers Authority
          California League of Food Processors
          California Legislative Council of the Plumbing, Heating and  
          Piping Industry
          California New Car Dealers Association
          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
          Family Business Association


                                                                    AB 2261  
                                                                    Page  5

          Flasher Barricade Association
          League of California Cities
          Nisei Farmers League
          United Contractors
          Western Carwash Association
          Western Plant Health Association
          Wine Institute

          ARGUMENTS IN SUPPORT:     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. This, the  
          author argues, 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 investigate an employer for  
          unlawful retaliation.
          According to the author, in 2014, the LC received 3,800  
          complaints of employer retaliation. 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.  Proponents argue 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, they argue that good employers are forced to  
          compete against bad actors that perpetuate low-wages and illegal  

          ARGUMENTS IN OPPOSITION:     Opponents argue that this bill  
          expands the authority of the DLSE to investigate and cite an  
          employer for alleged retaliation, even without an employee  
          complaint.  Opponents argue that current procedures for employee  
          initiated complaints handled by the LC have safeguards for all  
          parties involved to ensure that there is adequate opportunity to  


                                                                    AB 2261  
                                                                    Page  6

          present evidence in a timely and efficient manner and pursue an  
          appeal or litigation if necessary.  They argue that while recent  
          amendments to the bill appear to incorporate time restrictions  
          regarding events that may be considered for purposes of  
          retaliation, the bill still allows the LC to unilaterally  
          initiate an investigation of an employer, even when no employee  
          has submitted a complaint.  

          Opponents are concerned with the potential harassment,  
          disruption, and strain that these LC initiated investigations  
          will impose on employers to be constantly subjected to random  
          investigations for alleged retaliation.  Moreover, they argue  
          that this bill is unnecessary because 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. 

          ASSEMBLY FLOOR:  49-31, 6/1/16
          AYES:  Alejo, Atkins, Bloom, Bonilla, Bonta, Brown, Burke,  
            Calderon, Campos, Chau, Chiu, Chu, Cooley, Cooper, Dababneh,  
            Daly, Dodd, Eggman, Frazier, Cristina Garcia, Eduardo Garcia,  
            Gatto, Gipson, Gomez, Gonzalez, Gordon, Roger Hernández,  
            Holden, Irwin, Jones-Sawyer, Levine, Lopez, McCarty, Medina,  
            Mullin, Nazarian, O'Donnell, Quirk, Ridley-Thomas, Rodriguez,  
            Salas, Santiago, Mark Stone, Thurmond, Ting, Weber, Williams,  
            Wood, Rendon
          NOES:  Achadjian, Travis Allen, Arambula, Baker, Bigelow,  
            Brough, Chang, Chávez, Dahle, Beth Gaines, Gallagher, Gray,  
            Grove, Hadley, Harper, Jones, Kim, Lackey, Linder, Low,  
            Maienschein, Mathis, Mayes, Melendez, Obernolte, Olsen,  
            Patterson, Steinorth, Wagner, Waldron, Wilk

          Prepared by:Alma Perez-Schwab / L. & I.R. / (916) 651-1556
          8/3/16 19:00:46

                                   ****  END  ****



                                                                    AB 2261  
                                                                    Page  7