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 ----------------------------------------------------------------- |Author: |De León | |-----------+-----------------------------------------------------| |Version: |April 14, 2015 | ----------------------------------------------------------------- ----------------------------------------------------------------- |Urgency: |No |Fiscal: |Yes | ----------------------------------------------------------------- ----------------------------------------------------------------- |Consultant:|Gideon Baum | | | | ----------------------------------------------------------------- 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 SB 548 (De León) Page 2 of ? 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) SB 548 (De León) Page 3 of ? 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. SB 548 (De León) Page 4 of ? 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 SB 548 (De León) Page 5 of ? 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: SB 548 (De León) Page 6 of ? 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 SB 548 (De León) Page 7 of ? 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 SB 548 (De León) Page 8 of ? 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 SB 548 (De León) Page 9 of ? 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 SB 548 (De León) Page 10 of ? 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 -- END --