BILL ANALYSIS                                                                                                                                                                                                    Ó





          SENATE COMMITTEE ON LABOR AND INDUSTRIAL RELATIONS
                             Senator Tony Mendoza, Chair
                                2015 - 2016  Regular 

          Bill No:               SB 548       Hearing Date:     April 29,  
          2015
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          |Author:    |De León                                              |
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          |Version:   |April 14, 2015                                       |
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          |Urgency:   |No                     |Fiscal:    |Yes              |
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          |Consultant:|Gideon Baum                                          |
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           Subject:  Child care:  family child care providers:  bargaining  
                                   representatives


          KEY ISSUE
          
          Should the Legislature exempt family child care providers from  
          antitrust laws and allow them to organize to negotiate over  
          wages, benefits, and other occupational matters?
          
          Should the Legislature state its intent to create additional  
          childcare slots for children living in extreme poverty?
          
          ANALYSIS
          
           Existing law  requires that all day care centers and family child  
          care homes, with certain exceptions, be licensed and registered  
          with the state.  The licensing fee is dependent on the number of  
          children that the centers or homes take care of.  Family child  
          care homes, where the child care is provided by someone who  
          resides in the home where the care is provided, may only take  
          care of up to 14 children, while day care centers may be  
          licensed for more.  
          (Health and Safety Code §§ 1596.78, 1596.80, and 1596.803)

           Existing law  exempts family child care providers from the  








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          licensing requirement if they meet certain circumstances.  These  
          include: 

             1)   The family day care home is providing care for only one  
               family in addition to the provider's own children;
             2)   Parents have come together for a cooperative arrangement  
               to combine their efforts for the care of all of their  
               children and no payment is involved;
             3)   The provider is taking care of a relative's child;
             4)   The family child care program operates only one day per  
               week for no more than four hours.  
          (Health and Safety Code §§ 1596.792 & 1597.53)
           
          Existing law  allows the Superintendent of Public Instruction to  
          develop standards for quality child care programs and to enter  
          into contracts with child care centers and family child care  
          homes.  Existing law also authorizes the Department of Education  
          to create alternative payment providers in each county to  
          establish a reimbursement system for subsidized child care in  
          which:

            a)   Eligible parents can choose a licensed day care center or  
            family child care home, and the state reimburses the provider  
            the same rate that the provider charges a family that is not  
            subsidized, up to a ceiling established by the state;

            b)   Eligible parents can choose a provider that is exempt  
            from the licensing requirements, and the state reimburses that  
            provider at a rate set within each county, based on the mean  
            cost of licensed care in the county;

            c)   Eligible parents can enroll their children in a center or  
            network of family child care homes that has a direct contract  
            with the State Department of Education.  Child care in these  
            programs is reimbursed at a daily rate established in the  
            contract.  For most contractors, the daily rate is the  
            Standard Reimbursement Rate, set in statute and adjusted by  
            the Legislature to reflect changes in the cost of living;

            d)   The daily rate for providers that contract directly with  
            the state is adjusted by a statutory formula for infants,  
            school-aged children, children with disabilities, and children  
            at-risk of abuse or neglect. 

          (Education Code §§ 8220-8227, 8263)







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          This bill  would give licensed and unlicensed child care  
          providers the right form a single, statewide child care provider  
          organization to negotiate collectively with the state.  
           
           Specifically, this bill would: 
          
             a)   State that the purpose of this bill would be to promote  
               quality, access, and stability in the child care system by  
               authorizing family child care providers to form a provider  
               organization and establish a training partnership with the  
               state;

             b)   Extend the state action antitrust exemption to the  
               activities of the family child care providers and their  
               representatives.  This bill also states, however, that the  
               status of family child care providers as independent  
               business owners does not change, nor does this bill  
               classify family child care providers as public employees;

             c)   Create a right for family child care providers to form  
               provider organizations.  Child care providers would retain  
               the right to join or not join such an organization;

             d)   Require that, within 10 days of receipt of a request  
               from a provider organization, the State Department of  
               Social Services must make available to that provider  
               organization information regarding licensed family child  
               care providers, including each provider's contact  
               information;

             e)   Require that, within 30 days of receipt of a request  
               from a provider organization, the Department of Education,  
               with the assistance of the relevant organization, must  
               collect information regarding family child care providers,  
               including each provider's contact information. The provider  
               organization must bear the reasonable costs of collecting  
               the information.

             f)   Require that, upon written request of a family child  
               care provider, the State Department of Education and the  
               State Department of Social Services must remove the family  
               child care provider's home address and telephone number  
               from the above-described lists.








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          This bill would also create a certification process as follows:
          
             a)   Provides that a unit of provider organizations may  
               choose to designate the provider organization that shall be  
               the exclusive representative for negotiations with the  
               state.  In order for a unit of provider organizations to be  
               considered appropriate, the unit must be statewide and  
               include all family child care providers.  

              b)   Provides that the Public Employment Relations Board  
               (PERB) must conduct an election to certify the provider  
               organization as the exclusive bargaining representative.   
               PERB is also required to receive and act upon challenges,  
               petitions for unit certification, and other representation  
               issues.  All provider organizations on the ballot must  
               share equally in the cost of the election;

             c)   Empowers PERB to contract with a neutral third party to  
               conduct all necessary elections and other representation  
               requests.
           
           This bill would also create a representation process as follows:  

          
             a)   Provides that the child care organization would  
               represent all child care providers in negotiations with the  
               Governor and state agencies on issues that fall within the  
               child care provider organization's scope of representation.  
                

             b)   Provide that issues within the scope of representation  
               include: 

               a)     The administration of laws and regulations governing  
                 licensing for providers;
               b)     Joint labor-management committees;
               c)     Contract grievance arbitration;
               d)     Expanded access to professional development and  
                 training opportunities for providers;
               e)     Benefits for providers;
               f)     Payment procedures for child care subsidy programs;
               g)     Reimbursement rates for providers participating in a  
                 child care subsidy program including, but not limited to,  
                 rate add-ons for providers who complete extra training;
               h)     Expanded access to and funding for food and  







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                 nutrition programs.
               i)     The deduction of membership dues and fair share  
                 fees.
               j)     Expanded access to state-funded child care program  
                 to families in need of subsidies.
               aa)    Any changes to current practice other than those  
                 listed in above that would improve recruitment and  
                 retention of child care providers, quality of child care  
                 programs, additional education of qualified child care  
                 providers, and the promotion the health and safety of  
                 providers and the children in their care.

             a)   Requires that The Governor, through the Department of  
               Personnel Administration, in consultation with the  
               Superintendent, other state agencies that administer  
               state-funded child care programs, and their contractors,  
               must meet and confer in good faith regarding on all matters  
               within the scope of representation with representatives of  
               a certified provider organization; 


             b)   Provides that if an agreement is reached between the  
               Governor, through the Department of Personnel  
               Administration, and the certified provider organization,  
               they jointly shall prepare a written memorandum of  
               understanding.  
           
              c)   Provide the child care provider organization with right  
               to enter an agreement with the state for the deduction of  
               membership dues and fair share fees from child care subsidy  
               payments made to providers.

             d)   Prohibit the child care provider organization from  
               directing or calling a strike.  These amendments would also  
               allow for disputes to be submitted to the California State  
               Mediation and Conciliation Service for mediation. 

           This bill would also  state that it is the intent of the  
          Legislature to create an unspecified number of additional slots  
          in alternative payment programs for children living in extreme  
          poverty, defined as 50% of the federal poverty level, if funding  
          is allocated in the budget.  

           This bill would create the following training provisions:
           







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              1)   Requires, if a family child care provider organization  
               is certified, the State and the certified provider  
               organization to establish a training partnership consisting  
               of a Joint Committee on Child Care Training, Education, and  
               Quality Improvement.  The membership of the Joint Committee  
               (training committee) is to include representatives of the  
               certified provider organization and designees of the  
               Governor.  

             2)   Requires the provider organization to establish a  
               training program that carries out the recommendations of  
               the training committee.

             3)   Requires the training committee to meet to identify gaps  
               in the training available to family child care providers  
               and barriers that prevent family child care providers from  
               gaining greater skills and accessing postsecondary  
               education, and issue recommendations on an annual basis to  
               improve the quality of care offered by licensed and  
               license-exempt family child care providers.

             4)   Requires the training committee to play a coordinating  
               role in ensuring that the training offered to providers  
               through the training program:

               a)     Meets the State's needs for the child care  
                 workforce.

               b)     Satisfies the health, safety and educational  
                 standards prescribed by the State.

               c)     Aligns with the State's quality rating systems. 

               d)     Identifies and works to eliminate barriers to  
                 providers accessing training.

             1)   Authorizes the training committee's recommendations to  
               include, but not be limited to:

               a)     Ways to access federal and private funding for  
                 training to expand capacity to existing State training  
                 resources, such as general education classes and English  
                 language learner classes.

               b)     Ways to support providers who seek to obtain  







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                 training or higher education credentials in child  
                 development.  

               c)     Ways for the training program to work with existing  
                 training providers and educational institutions,  
                 including but not limited to resource and referral  
                 networks, community colleges, and apprenticeship  
                 programs.  

               d)     Ways for the training program to make training and  
                 education available to child care workers and other  
                 workers employed by child care centers and schools.

             1)   States it is the intent of the Legislature to allocate  
               $1 million in the 2015 budget to carry out the initial  
               recommendations of the training committee, and that in  
               subsequent years, the recommendations of the training  
               committee be funded by contributions agreed to for that  
               purpose in the memorandum of understanding between the  
               provider organization and the Governor.  
           
          This bill would also  require the Governor or his designee to  
          conduct a study, as specified, of  best practices for engaging  
          families in their children's early care and education in family  
          child care settings, and of federal and other funding that could  
          support parental engagement efforts without reducing the  
          availability and affordability of child care.
          
           This bill would also  make legislative findings and declarations  
          on the need for quality and affordable child care and the risks  
          of turnover and instability in the child care system among child  
          care providers.


          COMMENTS
          

          1.  Need for this bill?

            According to the author, specific to the provisions of the  
            bill that are within the jurisdiction of this Committee, "The  
            current subsidized child care system encompasses more than 120  
            different agencies contracting with the state as middlemen,  
            who in turn administer access to the system for subsidized  
            families and reimburse providers who care for children whose  







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            families receive subsidies.  Low income children have uneven  
            access to quality child care.  Given low reimbursement rates  
            and a fragmented system, there is also extremely high turnover  
            among providers.  One of the primary work-related costs that  
            providers struggle to afford is higher education and training  
            to increase their knowledge of child development and stay  
            current on the latest theory and practice of early education  
            and care."



          2.  Antitrust Law and the "State Action" Doctrine  

            As family child care home providers are self-employed, any  
            arrangement where the providers would get together and fix  
            prices and level of services would immediately encounter  
            antitrust difficulties.  California state antitrust laws are  
            based on the federal Sherman Act of 1890, which prohibits  
            "every contract, combination, or conspiracy in restraint of  
            trade", as well as the Clayton Act of 1914.  However, court  
            decisions since the creation of these antitrust laws,  
            particularly Parker v. Brown (317 U.S. 341) in 1943, have  
            acknowledged that the federal government did not intend for  
            antitrust laws to apply to states and their agents when those  
            agents are engaged in activities that are tied to a state  
            policy and are under some management or supervision from the  
            state.  By explicitly stating that the formation of provider  
            organizations are exempted under the "state action" doctrine  
            in antitrust law, this bill exempts the activities of family  
            child care providers and their representatives from federal  
            and state antitrust laws.

          3.  Proponent Arguments  :
            
            The sponsors state that our current system of child care is  
            fragmented, standards vary greatly, and it is plagued by high  
            turnover among providers, as approximately 40% of providers  
            are leaving the profession each year.  In addition, sponsors  
            note that income inequality is at the forefront of the nation  
            and our state. Sponsors note that, according to data from the  
            U.S. Census Bureau, 47% of California's  poor children  live in  
            single-mother families and that the majority of California's  
            single-mother households earned less than 200% of the poverty  
            threshold. Noting these two factors, the sponsors argue that  
            California must implement policies that support families in  







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            achieving economic stability and ensure they can access a  
            stable, affordable, quality child care system so that they can  
            find work and stay employed.  Sponsors believe that SB 548  
            will help achieve this by creating more child care slots and  
            allowing childcare providers to organize, creating a more  
            stable workforce and allowing family child care providers to  
            join together on matters that affect their profession. 

          4.  Opponent Arguments  :

            The National Right to Work Committee opposes SB 548, arguing  
            that the bill would force childcare providers to join a union,  
            depriving childcare providers of the right to negotiate  
            workplace conditions for themselves.  The National Right to  
            Work Committee argues that allowing childcare workers to  
            organize will increase state costs and hurt taxpayers,  
            childcare providers, and the State of California.

          5.  Prior Legislation  :

            AB 101 (John Perez) of 2011 was very similar to this bill and  
            also authorized family child care providers to choose whether  
            to be represented by a single provider organization.  AB 101  
            was vetoed by the Governor, whose veto message read:

            Maintaining the quality and affordability of childcare is a  
            very important goal.  So too is making sure that working  
            conditions are decent and fair for those who take care of our  
            children.  Balancing these objectives, however, as this bill  
            attempts to do, is not easy or free from dispute. 

            Today California, like the nation itself, is facing huge  
            budget challenges.  Given that reality, I am reluctant to  
            embark on a program of this magnitude and potential cost.



          SUPPORT
          
          The American Federation of State, County and Municipal  
          Employees, AFL-CIO (Co-Sponsor)
          Service Employees International Union (Co-Sponsor)
          California Labor Federation, AFL-CIO
          California Women Lawyers
          Courage Campaign







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          Equal Rights Advocates
          National Council of Jewish Women California
          Special Needs Network
          Western Center on Law and Poverty
          9to5
          
          OPPOSITION
          
          National Right to Work Committee
                                          
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