BILL ANALYSIS Ó
SB 560
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Date of Hearing: August 19, 2015
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Jimmy Gomez, Chair
SB 560
(Monning) - As Amended August 17, 2015
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|Policy |Business and Professions |Vote:|14 - 0 |
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| |Insurance | | 13 -0 |
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Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY: This bill:
1)Prohibits a licensing board from processing an application for
an initial license unless the applicant provides his or her
social security number, individual taxpayer identification
number, or federal employer identification number where
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requested on the application.
2)Requires a licensing board, including the State Bar and the
Bureau of Real Estate, to provide personal information
regarding licensees to the Employment Development Department
(EDD) upon request.
3)Authorizes the Contractors State License Board's (CSLB)
Enforcement Division to issue a written notice to appear
before a court, to unlicensed individuals who fail to secure
workers' compensation insurance.
FISCAL EFFECT:
1)Minor and absorbable costs to the licensing boards to provide
information to EDD. Existing law requires licensing boards to
provide this information to the Franchise Tax Board.
2)Minor and absorbable costs to CSLB to enhance their
enforcement activities.
COMMENTS:
1)Purpose. This bill is sponsored by CSLB. According to the
author, "[This bill] would expand the jurisdiction of CSLB's
Enforcement Division to include ensuring payment for adequate
workers' compensation. Including workers' compensation
violations in the Notice to Appear will streamline the
referral of these cases to local district attorneys and place
an emphasis on the importance of obtaining workers'
compensation."
2)Background. CSLB's enforcement division, the Statewide
Investigative Fraud Team, enforces the prohibition against
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unlicensed contracting activity. According to the CSLB's 2014
Sunset Review Report, the enforcement division consists of
enforcement representatives, peace officers, and enforcement
supervisors. When the CSLB suspects serious or repeat
violations for unlicensed activity, it will assign the case to
one of its enforcement representatives or peace officers for
formal investigation. The cases are subject to review by
enforcement supervisors.
If an investigation uncovers evidence of a possible violation of
unlicensed activity, the CSLB may issue a warning letter,
issue a citation, or refer the case to the District Attorney
for criminal prosecution (issue a notice to appear). However,
the CSLB's enacting statute only permits the CSLB, when acting
alone, to take action for violations specific to the licensure
of contractors, which does not include the general obligation
to carry workers' compensation insurance under the Labor Code.
This bill will grant this additional authority.
3)Workers' Compensation Insurance Laws. In California, the
Division of Labor Standards Enforcement (DLSE) is authorized
to enforce the state's workers' compensation insurance laws.
When the DLSE suspects that an employer does not carry
workers' compensation, it will issue a stop order. The order
prohibits the employer from using employee labor until the
employer obtains coverage. A violation of the order is a
misdemeanor-punishable by imprisonment in the county jail for
up to 60 days and/or a fine of up to $10,000.
The DLSE assesses a penalty of $1,000 per employee on the
payroll at the time the stop order is issued and served, up to
$100,000. The DLSE may also elevate the citation to a
misdemeanor notice to appear in egregious cases.
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4)Prior Legislation.
a) AB 2554 (Berryhill), Chapter 85, Statutes of 2012,
provided CSLB enforcement representatives the authority to
issue a notice to appear for violations of contracting
laws.
b) SB 691 (Lieu), Chapter 832, Statutes of 2012, added CSLB
to the list of agencies approved to receive payroll
information from Employment Development Department.
Analysis Prepared by:Jennifer Swenson / APPR. / (916)
319-2081