BILL ANALYSIS
Senate Committee on Labor and Industrial Relations
Mark DeSaulnier, Chair
Date of Hearing: June 23, 2010 2009-2010 Regular
Session
Consultant: Gideon L. Baum Fiscal: No
Urgency: Yes
Bill No: AB 179
Author: Portantino
Version: As Amended June 16, 2010
SUBJECT
Wages: temporary workers.
KEY ISSUE
Should the Legislature exempt hospice employers, home health
employers, and home care employers from the requirement that
they pay their temporary employees weekly?
PURPOSE
To carve out hospice employers, home health employers, and home
care employers from the requirement that they pay their
temporary employees weekly.
ANALYSIS
Existing law defines "temporary services employers" as employing
units that supply workers to perform services for the client, as
well as to perform the following functions:
a) Negotiate with clients or customers for such matters as
time, place, type of work, working conditions, quality, and
price of the services;
b) Determine assignments or reassignments of workers, even
though workers retain the right to refuse specific
assignments;
c) Retain the authority to assign or reassign a worker to
other clients or customers when a worker is determined
unacceptable by a specific client or customer;
d) Assign or reassign the worker to perform services for a
client or customer;
e) Set the rate of pay of the worker, whether or not
through negotiation;
f) Pay the worker from their own account or accounts;
g) Retain the right to hire and terminate workers.
Existing law requires, with certain special provisions, that if
an employer discharges an employee, the employer must pay all
earned and unpaid wages to the employee immediately upon
discharge. Exemptions are provided to employers for an employee
working in the motion picture industry, the oil drilling
business, or at a venue that hosts live theatrical or concert
events
Existing law requires that temporary services employers pay
their employees weekly, regardless of when the assignment ends.
This requirement would not apply to a bona fide non-profit
organization that provides temporary service employees to
clients, farm labor contractors, or garment manufacturing
employers.
Existing law exempts temporary services employers from the
requirement of weekly pay if a temporary services employer sends
an employee to work for a client engaged in a trade dispute, or
if the temporary services employer assigns an employee to work
on a day-to-day basis and the employee:
- Reports to the employer for an assignment;
- Returns to the employer upon the completion of the
assignment; and
- Is not defined as an executive, administrative, professional
or clerical employee under the Industrial Welfare Commission
wage orders.
Payment under these circumstances is required at the end of the
each day, regardless of when the assignment ends.
Existing law exempts employers who assign employees to work for
a client for over 90 consecutive calendar days from the
requirements of weekly pay.
Hearing Date: June 23, 2010 AB 179
Consultant: Gideon L. Baum Page 2
Senate Committee on Labor and Industrial Relations
This bill would provide that hospice employers, home health
employers, and home care employers must be considered to have
timely paid employee wages if the employee is paid semimonthly
if they provide either of the following services:
1) Domestic services directed at reducing the need for
other supportive services, and paramedical services which
make it possible for the recipient to establish and
maintain an independent living arrangement.
2) Personal care services, such as:
Assistance with ambulation.
Bathing, oral hygiene, and grooming.
Dressing.
Care and assistance with prosthetic devices.
Bowel, bladder, and menstrual care.
Repositioning, skin care, range of motion exercises,
and transfers.
Feeding and assurance of adequate fluid intake.
Respiration.
Assistance with self-administration of medications.
This bill would exempt hospice employers, home health employers,
and home care employers, as defined, from the weekly pay
provisions of existing law.
COMMENTS
1. Need for this bill?
This bill seeks to revisit the provisions of SB 940 (Yee),
Chapter 169, Statutes of 2008, which was the product of a
series of negotiations between the temporary services
employers and several labor organizations due to the 2006
ruling of the California Supreme Court in Smith v. L'Oreal.
In Smith v. L'Oreal, L'Oreal had hired the plaintiff as a hair
model, but did not pay her for over two months. The plaintiff
sued, arguing she was discharged, and therefore owed a
monetary penalty from L'Oreal due to non-payment. The court
unanimously found for the plaintiff and stated that L'Oreal
Hearing Date: June 23, 2010 AB 179
Consultant: Gideon L. Baum Page 3
Senate Committee on Labor and Industrial Relations
should have paid its temporary employee immediately upon the
end of her assignment, which the court viewed as the same as a
discharge. The court stated, "Excluding employees like the
plaintiff from the prospective scope of [Labor Code] sections
201 and 203 would mean that employees who fulfill their
employment obligations by completing the specific
assignment?would be exposed to vulnerability from delayed wage
payments, while? employees who are fired for good cause would
be entitled to immediate payment of their earned wages...."
The American Staffing Association (ASA) and the California
Staffing Professionals (CSP) are deeply concerned over the
possibility that Smith v. L'Oreal could be applied to their
industry, despite the fact that L'Oreal was not and is not a
temporary services employer. Specifically, they argue that
immediate payment at the conclusion of a temporary assignment
would be difficult, as many assignments only last for a few
hours or a single day, and therefore the entire temporary
services employers industry could face large fines for late
payment of wages.
After more than 18 months of negotiations, the ASA, CSP, and
California Labor Federation came to an agreement which dealt
with Smith v. L'Oreal, which was memorialized in SB 940. This
agreement included weekly pay for temporary service employers,
unless they met certain requirements. The legislation also
included language that allows temporary services employers
that send their employees out for long-term assignments with
clients to adopt separate pay practices, but that these
practices would not necessarily be shielded from all of the
implications of the Smith v. L'Oreal decision. While it seems
improbable that the Smith v. L'Oreal decision ever truly
applied to temporary services employers as they are commonly
understood and defined in law, the Smith v. L'Oreal decision
has not been explored further in other court decisions, nor
has current law been litigated in any court decisions.
AB 179 seeks to exempt hospice employers, home health
employers, and home care employers, as defined, from the
statutory framework created through SB 940. This would free
them from the requirements of paying weekly, but would also
expose these employers to possible litigation if a strict
Hearing Date: June 23, 2010 AB 179
Consultant: Gideon L. Baum Page 4
Senate Committee on Labor and Industrial Relations
interpretation of Smith v. L'Oreal is found to apply to them
in future litigation.
2. Committee Amendments :
As currently written, the bill has two conflicting sections
that would exempt hospice employers, home health employers,
and home care employers, from the requirement of weekly pay.
As the earlier exemption is better defined, the Committee may
wish to consider striking the second exemption on page 4,
lines 10 through 14.
3. Proponent Arguments :
The California Association for Health Services at Home
(CAHSAH) believes that hospice and home care providers have
not traditional been defined as "temporary services
providers", nor were they a part of the discussions
surrounding SB 940, but have found themselves drawn into SB
940 due to the defining utilized. CAHSAH argues that
requiring weekly pay doubles the cost of administering
payroll, which reduces the patient care and does not benefit
workers.
4. Opponent Arguments :
The California Labor Federation opposes AB 179, noting that
since the passage of SB 940 in 2008, numerous staffing
agencies in specific industries have asked to be exempted from
the weekly pay requirement, including the high tech industry
and the hospitals. The Labor Federation argues that these
workers are just as deserving of weekly pay as other temporary
employees, and notes that non-profit hospice workers are
already exempted from weekly pay requirements. The Labor
Federation also notes that temporary workers are a
particularly vulnerable segment of the workforce, as they
cannot count on regular or stable income, and therefore are at
a greater risk of failing to make ends meet.
5. Prior Legislation :
Hearing Date: June 23, 2010 AB 179
Consultant: Gideon L. Baum Page 5
Senate Committee on Labor and Industrial Relations
SB 940 (Yee), Chapter 169, Statutes of 2008, as discussed
above.
SUPPORT
The California Association for Health Services at Home (CAHSAH)
OPPOSITION
California Employment Lawyers Association CELA
California Labor Federation
California Nurses Association/National Nurses Organizing
Committee
* * *
Hearing Date: June 23, 2010 AB 179
Consultant: Gideon L. Baum Page 6
Senate Committee on Labor and Industrial Relations