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 SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8 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. ANALYSIS: 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 §98.7) 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 discrimination. Background 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 Association 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 practices. 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