BILL ANALYSIS
AB 3037
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Date of Hearing: March 31, 2004
ASSEMBLY COMMITTEE ON LABOR AND EMPLOYMENT
Paul Koretz, Chair
AB 3037 (Yee) - As Proposed to be Amended: March 31, 2004
SUBJECT : Employment: occupational safety and health
SUMMARY : Establishes new requirements related to an employer's
establishment of an injury and illness prevention program (IIPP)
in the workplace, and provides for a five percent discount on
workers' compensation premiums where an employer's program meets
certain criteria. Specifically, this bill :
1) Requires employers with 50 or more employees to include a
joint employer-employee occupational safety and health
committee ("committee") as part of their IIPP.
2) Requires employers with fewer than 50 employees to have at
least one employee and one employer representative as a
safety liaison team ("liaison") as part of their IIPP.
3) Provides an exemption to these requirements for an employer
where:
a) The employer has a workers' compensation experience
modification rating of less than 1.25; and
b) The employer is not in a high-hazard industry.
4) Provides an exemption to these requirements for small
employers who do not have sufficient workers' compensation
premiums to generate an experience modification rate where:
a) The employer has not had a work-related "serious injury
or illness" or an injury or illness which resulted in
"serious physical harm," as defined, within two years; and
b) The employer is not in a high-hazard industry.
5) Provides that no exemption will apply where an employer has
been cited for a work-related fatality within the last four
years.
6) Requires the duties of committee or liaison to include at
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least the following:
a) Review of the employer's IIPP;
b) Participation in any scheduled work-site inspections;
c) Participation in any investigation of incidents
involving near-misses or death, injury, illness, or
exposure to hazardous substances;
d) Participation in any investigation of any alleged
hazardous condition or complaints, and any related
follow-up;
e) Development of a system for encouraging employees to
bring complaints or problems to the committee or liaison;
f) Additional inspections and investigations by the
committee or liaison;
g) Making recommendations to the employer regarding
corrective actions to be implemented within a specified
time period;
h) Participation in quarterly meetings if the employer is
in a low-hazard industry or twice monthly meetings if the
employer is in a high-hazard industry or has a experience
modification rate of greater than 1.25;
i) Preparation of a written agenda for each meeting;
j) Preparation of complete documentation of the activities
of the committee or liaison;
aa) Posting of the committee or liaison meeting agenda,
action items, and members; and
bb) Authority to recommend that an employer stop an activity
if the committee or team believes the situation constitutes
an imminent hazard or serious menace to the lives or safety
of employees. If a recommendation is not followed, the
employer shall provide a written explanation to the
committee or liaison.
7) Establishes requirements for the structure of the committee
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or liaison that include, among other requirements, an equal
number of employer and employee representatives.
8) Establishes requirements for the selection of committee or
liaison members that include, among other requirements, the
following:
a) Where a collective bargaining agreement exists, the
employee representatives shall be selected according to
internal union procedures.
b) Where no collective bargaining agreement exists, the
employee representatives shall be selected either randomly
from all volunteers or pursuant to a secret ballot election
supervised by the State Mediation and Conciliation Service.
9) Establishes an initial training requirement for committee and
liaison members that includes a minimum of 32 hours of
training including hazard identification and control,
incident investigation techniques, principles of effective
worker training and education, mechanics of committee
operations, workers' rights with respect to occupational
safety and health, and an overview of all relevant standards.
10)Requires the Department of Industrial Relations to establish
a certificate of merit based on whether an employer has an
effective IIPP, including an effective committee or liaison.
11)Authorizes an employer to apply, under penalty of perjury,
for a certificate of merit that shall entitle an employer to
a five percent discount from the employer's insurance carrier
or group self-insurance fund.
12)Implements requirements related to bidders on public
contracts as follows:
a) Requires public entities to require bidders to be
responsible with respect to worker occupational safety and
health.
b) Requires public entities to obtain evidence of the
effectiveness of a bidder's IIPP that includes the
following:
i) A copy of the prospective bidder's IIPP.
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ii) The bidder's history of occupational safety and
health for the previous four-year period, including
information related to worker injuries and illnesses and
Cal/OSHA activity.
c) Entitles a bidder that obtains a certificate of merit to
a presumption of compliance with these requirements and the
ability to submit the certificate of merit in lieu of the
information enumerated above.
d) Authorizes a public entity to establish a
pre-qualification process for bidders with an appeal
procedure.
e) Requires public entities to include requirements for a
safe and healthful workplace in all contract language.
f) Requires the Department of Industrial Relations , in
collaboration with affected agencies and interested
parties, to develop model guidelines for such contractual
language.
13)Establishes a definition for "serious physical harm."
14)Makes related legislative findings and declarations.
EXISTING LAW :
1) Requires every employer to establish, implement and maintain
an effective injury prevention program.
2) Requires employers, as part of the program to train all
employees when the program is first established, train new
employees and those receiving new job assignments, and train
employees whenever a new hazard is introduced to the
workplace.
3) Permits, but does not require, an employer's injury
prevention program to include an employer and employee
occupational safety and health committee.
4) Establishes an alternative standard program, with fewer
reporting requirements, for the following:
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a) Employers with fewer than 20 employees who are in
industries that are not on a designated list of high hazard
industries and who have a workers' compensation experience
modification rate of 1.1 or less.
b) Employers with fewer than 20 employees who are in
industries that are on a designated list of low hazard
industries.
5) Requires the Division of Occupational Safety and Health to
prepare a Model Injury and Illness Prevention Program for
Non-High-Hazard Employment that, if adopted, prevents a civil
penalty for an initial workplace safety violation from being
assessed against an employer.
6) Requires the Division of Occupational Safety and Health to
prepare a Model Injury and Illness Prevention Program for
Employers with Industries with Intermittent Employment that,
if adopted, satisfies the requirements of existing law.
7) Requires workers' compensation insurers to review the injury
and illness prevention programs of employer insureds within
four months of the policy's implementation. The review must
include a written report specifying the findings and any
recommended changes.
FISCAL EFFECT : Unknown
COMMENTS : As introduced, this bill contains nearly identical
language to last year's AB 572 (Yee) relating to workplace
safety issues and retaliation. In addition, this measure
imposes new requirements related to IIPPs and mandates a
specified workers' compensation premium discount. However, the
author will be proposing to substantially amend the bill in
committee to delete the provisions from last year's AB 572.
Therefore, as proposed to be amended, this bill will only
contain the provisions related to IIPPs and the workers'
compensation premium discount.
Background on Injury Illness and Prevention Programs
In California, every employer is required to provide a safe and
healthful workplace for his or her employees. Since 1991,
California law also has required every employer to have a
written and effective injury and illness prevention program.
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The IIPP must include the following minimum elements:
(1) Responsibility - the IIPP must provide the
name of the person with the authority and
responsibility for its implementation.
(2) Compliance - a system must be set forth in
writing to ensure that employees comply with safe and
healthful work practices.
(3) Communication - a system for communicating
with employees about safety and health matters.
Employees must be encouraged to inform their employer
of hazards at the work site without fear of reprisal.
(4) Hazard assessment - procedures for identifying
and evaluating workplace hazards.
(5) Accident/exposure investigation - a procedure
to investigate workplace injuries or illnesses.
(6) Hazard correction - methods and procedures for
correcting any unsafe or unhealthful work conditions
in a timely manner.
(7) Training and instruction - an effective
program of instructing employees on general safe work
practices and hazards specific to each job assignment.
The general philosophy behind IIPPs is that such programs help
reduce the costs and risks associated with workplace injuries
and illnesses. These costs are borne both by the injured worker
(through job loss, serious injury or death) and by the employer
(increased workers' compensation costs and decreased
productivity). Proponents of IIPPs contend that such programs
help employers reduce costs by identifying what needs to be done
to promote safety and health at the workplace and outline
polices and procedures to achieve their safety and health goals.
Under existing law an employer is permitted, but not required,
to utilize joint employer-employee occupational safety and
health committees as part of their IIPP. Proponents generally
argue that such collaborative efforts provide employees with
meaningful participation in safety and health issues affecting
their workplace and can simultaneously reduce workplace deaths,
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injuries and illnesses.
Changes to Existing Law
This bill makes substantial changes to existing law. However,
these changes can generally be classified into three main
categories: (1) the requirement of joint committees or liaison
teams; (2) the corresponding certificate of merit and the
mandated five percent workers' compensation premium reduction;
and (3) new requirements related to bidding on public contracts.
Each of these main changes will be summarized below.
(1) Requirement of Joint Committee/Liaison Team as
Part of IIPP
The main thrust of this bill is the requirement that employers,
as part of their IIPP, establish joint employer-employee
occupational safety and health committees ("committees") or
safety liaison teams ("teams"). Specifically, this bill
requires employers with 50 or more employees to have committees
and employers with fewer than 50 employees to have teams.
Employers are exempt from the requirement if they are not in
high-hazard industries and have experience modification rates of
less than 1.25. For smaller employers, who generally do not
have sufficient workers' compensation insurance premiums to be
in a category where the insurer establishes an experience
modification rate, this bill attempts to create an exemption
based on good safety record. This exemption applies where the
employer is not in a high hazard industry and has not had a
"serious injury or illness" or an injury or illness resulting in
"serious physical harm" for two years.
This bill also sets forth detailed requirements for the duties
of the committees and teams, as well as the requirements for
selection of members and structure. In addition, this bill
establishes a training requirement for committee and team
members.
(2) Workers' Compensation Premium Discount
The workers' compensation premium discount is intended by the
author and the sponsor to constitute a reward system for
employers who have effective IIPPs that incorporate joint
committees or liaison teams. Even employers who are not
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required by law to use committees or teams may voluntarily do so
in order to take advantage of the reward system.
The bill requires the Department of Industrial Relations to
establish criteria for a certificate of merit based on whether
an employer has an effective IIPP. The criteria for the
certificate must include the following:
The employer must have in place an effective
committee or team.
The employer is not eligible until the committee or
team has been operating effectively for at least six
months.
A taking into account of the size of the employer,
whether or not the employer is in a high or low hazard
industry, the lost workday case incident rate, and the
employer's experience modification rating, if any.
The employer must apply, under penalty of perjury, for the
initial certificate and biannual renewal certificates.
(3) Bidder Injury and Illness Prevention Program
This bill adds language to the Public Contract Code so that an
employer's safety and health program is a factor in determining
whether the employer is a "responsible bidder."
This bills also requires public entities to obtain evidence
regarding the effectiveness of a bidder's IIPP including a copy
of the IIPP and the bidder's history of occupational safety and
health for the previous four year period. A bidder that obtains
a certificate of merit (as discussed above) is presumed to
comply with these requirements and may submit the certificate in
lieu of the required information.
Under this bill, public entities may establish pre-qualification
requirements for bidders to satisfy these requirements. The
public entity must also include requirements for a safe and
healthful workplace in all contract language, and the Department
of Industrial Relations is directed to develop model guidelines
for such language.
Potential Issue - Prohibited Employer Domination Under the
National Labor Relations Act
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The California Chamber of Commerce, writing in opposition to
this measure, argues that the mandated requirement to establish
joint labor-management occupational safety and health committees
violates prohibitions contained in the federal National Labor
Relations Act (NLRA) related to "employer domination" of labor
organizations.
Section 8(A)(2) of the NLRA makes it an unfair labor practice
for an employer "to dominate or interfere with the formation or
administration of any labor organization or contribute financial
or other support to it?" The primary purpose of this
prohibition was to eradicate company unionism, a practice in
which employers would set up in-house labor unions in order to
prevent organization by independent labor organizations.
Therefore, this section makes it unlawful for an employer to
"dominate" a labor organization.
The threshold issue in such cases is whether the entity involved
is a labor organization. Under the statutory definition set
forth in the NLRA, an entity is a labor organization if (1)
employees participate, (2) the organization exists, at least in
part, for the purpose of "dealing with" employers, and (3) these
dealings concern "conditions of work," grievances, labor
disputes, wages, rates of pay, or hours of employment.
Assuming the threshold issue of "labor organization" status is
established, the main issue is whether there exists employer
"domination" of the labor organization.
In the landmark case Electromation, Inc. , 309 NLRB 990 (1992),
enforced, 35 F.3d 1148 (7th Cir. 1994), the National Labor
Relations Board ruled that certain "action committees" composed
of employees and management representatives were labor
organizations dominated by the employer in violation of the
NLRA. In that case, the employer attempted to deal with
employee discontent caused by recent changes in employer
policies. The employer-created workplace committees were
composed of managers and employees who were instructed to
represent their fellow employees. Management control over the
size of the committees, state goals, and written purposes, as
well as management involvement as leaders of the committees, was
found to constitute unlawful domination and interference.
The NLRB also found certain "safety committees" to be unlawfully
dominated by the employer in E.I. DuPont de Nemours , 311 NLRB
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893 (1993). In that case, management established the committees
and controlled their administration by determining committee
composition, installing a member of management as each
committee's leader, playing a key role in setting committee
agendas, and conducting meetings.
However, a more recent decision of the NLRB expanded protection
for such arrangements where the committees exercise traditional
managerial authority. Crown Cork & Seal Company , 334 NLRB No.
92 (2001). In that case, the NLRB unanimously agreed that the
employer's creation and use of four production teams and three
other employee-employer committees did not violate the NLRA
where the committees exercised functions normally delegated to
managers or supervisors. Some of the teams at issue in that
case also had authority over safety matters, including the
investigation of accidents and the power to correct
safety-related problems.
Although not binding as precedent over California courts, an
Oregon case found no violation of the NLRA in a situation very
similar to that proposed under this bill. Oregon law generally
requires "safety committees" for all public or private employers
of 11 or more employees, and for employers of 10 or fewer
employees with poor workplace safety records (O.A.R.
437-01-765(2)(a)).
In 1999, the Oregon Workers' Compensation Board upheld the
safety committee law against an employer challenge that the
requirement was preempted by the NLRA by violating the
prohibition against employer domination. Oregon Occupational
Safety & Health Division v. Overnite Transport Company , Docket
No. SH-96336 (1999). The Oregon Court of Appeals affirmed the
decision without opinion. 9 P.3d 161 (2000). Upon further
appeal, the Oregon Supreme Court denied review. 26 P.3d 148
(2000).
For purposes of that case, the parties stipulated that the
safety committees required under Oregon law were "labor
organizations" under the NLRA. However, the Oregon Workers'
Compensation Board distinguished Electromation Inc. as not
involving safety committees required by state law. Rather, the
safety committees at issue in Oregon were formed under a
requirement of Oregon law and were not unilaterally created by
the employer.
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Moreover, the Oregon Workers' Compensation Board noted that the
Oregon law set forth a number of safeguards and protections
against employer domination and interference, such as equal
representation of employees and committee control over setting
the agenda, meeting times and locations. As a result, the
establishment of such committees was held not to violate the
NLRA.
Therefore, opponents of this measure will likely challenge the
joint committee and liaison team requirement as violating the
NLRA prohibitions as set forth in Electromation Inc. and E.I.
DuPont de Nemours .
Supporters, on the other hand, are likely to argue that this
requirement, to be mandated by the state, is more analogous to
the issue discussed in the Oregon case. Moreover, supporters
will likely contend that the procedures set up by this bill,
like the Oregon law, contain protections against employer
domination and interference sufficient to warrant a finding of
no violation of the NLRA.
Arguments in Support
This bill is sponsored by WORKSAFE!, a worker safety coalition.
WORKSAFE! argues that this bill will strengthen occupational
safety and health protection for workers by requiring joint
committees and safety liaisons for high-hazard and unsafe
employers. This bill also will provide incentives for employers
to provide safe and healthy workplaces by setting up a reward
system. Employers who have effective safety and health programs
that incorporate joint committees and safety liaisons will be
entitled to (1) a workers' compensation premium discount, and
(2) a safety presumption for bidding on public contracts.
WORKSAFE! argues that this cooperative approach recognizes
government's limited resources for enforcement and focuses on
solving problems at the workplace before further state
enforcement action is required. WORKSAFE! contends that
similar, if not identical, requirements have been adopted with
success in Connecticut, Oregon, Minnesota, Montana, North
Carolina, Pennsylvania, Tennessee, Washington, West Virginia,
Australia, Canada, Great Britain and New Zealand.
Other supporters of this measure, including individuals, labor
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organizations and others, contend that this bill will improve
protection for workers because joint committees, with trained
members who know how to be effective, are one of the best tools
for preventing injuries, illnesses and deaths in the workplace.
Such incidents largely can be prevented if workers are involved
in such collaborative efforts. Supporters also argue that
cooperative safety committees are a very effective means of
encouraging workers to speak up concerning such issues.
Arguments in Opposition
At the time this analysis was prepared, opponents raised several
arguments against the provisions of the bill that were contained
in last year's AB 572, arguing that the bill significantly
expands the basis for workplace retaliation claims. As
discussed above, the author has proposed to amend the bill in
committee to delete the provisions from the prior AB 572.
As discussed above, the California Chamber of Commerce also
opposes the bill because it contends that the joint committee
requirements violate the provisions of the National Labor
Relations Act. A similar argument in opposition to this bill
was raised by the California Employment Law Council, who states,
"The change from an optional law to a mandatory law in this area
may well be in violation of the National Labor Relations Act."
Note on Double Referral :
Since this bill involves several provisions and issues related
to workers' compensation, it has also been referred to the
Assembly Committee on Insurance.
REGISTERED SUPPORT / OPPOSITION :
Support
Asbestos Workers Local 5
Betsy Brown
California Applicants' Attorneys Association
Communications Workers of America
Consumer Attorneys of California
Department of Consumer and Business Services, State of Oregon
Dr. David Lighthall
Elizabeth Katz, MHP
Fred Hirsch
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Hotel Employees & Restaurant Employees, Local 2850
Hotel Employees & Restaurant Employees, Local 309
Hotel Employees & Restaurant Employees, Local 49
International Brotherhood of Electrical Workers
International Brotherhood of Electrical Workers, Local 1245
J.J. Design & Renovations
Joan Lichterman
La Raza Centro Legal, Inc.
National Association of Letter Carriers, 1563
National Environmental Trust
North Bay Labor Council
Orange County Labor Management Cooperative Trust
Painters & Allied Trades District Council, 36
Piedmont Brown
Suzi Goldmacher RN, MSN
The Breast Cancer Fund
The Relational Culture Institute
Union of Health Care Professionals
United Nurses Associations of California
Utility Workers Union of America
Opposition
California Bankers Association
California Chamber of Commerce
California Employment Law Council
National Federation of Independent Business
Analysis Prepared by : Ben Ebbink / L. & E. / (916) 319-2091