BILL ANALYSIS
AB 227
Page 1
Date of Hearing: April 22, 2009
ASSEMBLY COMMITTEE ON LABOR AND EMPLOYMENT
William W. Monning, Chair
AB 227 (Cook) - As Introduced: February 4, 2009
SUBJECT : Labor standards: consultation unit.
SUMMARY : Requires the Division of Labor Standards Enforcement
(DLSE) to establish a specified consultation unit as specified.
Specifically, this bill :
1 Establishes the "Labor Standards Consultation Unit" within
DLSE to provide, upon request, a full range of consulting
services to any employer or employee.
2)Specifies that those consulting services shall include, but
are not limited to, providing an employer with information,
advice, or recommendations on complying with labor standards,
orders, or regulations adopted pursuant to the Labor Code.
3)Authorizes the unit to charge the requester a fee for
consulting services provided pursuant to this bill, not to
exceed the actual cost to the unit.
4)Authorizes the unit to fund its operation through grants
obtained from for-profit or not-for-profit nongovernmental
entities.
5)Specifies that DLSE may not cite an employer for a violation
of any standard, order, or regulation adopted pursuant to the
Labor Code, if the violation is discovered as a result of an
employer requesting or accepting consulting services offered
pursuant to this bill and, if within 30 days of that
discovery, the employer takes corrective action that remedies
the violation.
EXISTING LAW establishes DLSE within the Department of
Industrial Relations (DIR) as an administrative agency
responsible for the enforcement of labor laws.
FISCAL EFFECT : Unknown
COMMENTS : This measure is sponsored by the Associated Builders
and Contractors of California (ABC).
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Current DLSE "Voluntary Compliance" Program
In a recent series of "web interviews" hosted by the California
Chamber of Commerce, Labor Commissioner Angela Bradstreet
outlined recent efforts by her office to effectuate a "voluntary
compliance" program for California employers.
According to DLSE, an employer who believes they may have
violated the law may request to participate in the voluntary
compliance program. DLSE states that as a condition of
participation in the program, the employer cannot be involved in
ongoing litigation, must participate in a comprehensive audit
(either self-conducted or conducted by DLSE) and must agree to
make their employees "whole" for any violation of the law. DLSE
states that if an employer is willing to participate under these
conditions, DLSE will negotiate with the employer for a
reduction in any civil penalties or other sanctions that the
employer would normally be subject to.
According to DLSE, to date four employers have participated in
the voluntary compliance program. Those four employers have
paid $26.8 million in wages, $3.9 million in "waiting time"
penalties, and $1.8 million in civil penalties. DLSE states
that each of the four employers has made full payment of the
wages and penalties, and the workers have either been paid or
are in the process of being paid through a third party
administrator.
DLSE indicates that there has been an informal voluntary
compliance process for a number of years, but Labor Commissioner
Bradstreet has made recent efforts to formalize and publicize
the program.
Division of Occupational Safety and Health (DOSH) Consultation
Service
The Division of Occupational Safety and Health (DOSH) currently
operates a consultation service as authorized by Labor Code
Section 6354.
DOSH publications describe the consultation service as follows:
"To encourage voluntary compliance with occupational safety
and health regulations and to help lower workplace injury
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and illness rates, the Consultation Service offers
assistance to both employers and employees. Consulting
services include on-site visits and compliance assistance,
injury and illness prevention program improvement,
educational seminars and publications.
On-site visits-employers may phone to request on-site
assistance, which is provided only through employer
invitation. Employees and employee groups may phone to
request consultation away from the job site. The
Consultation Service is separate and distinct from Cal/OSHA
enforcement operations, and consultants do not participate
in Cal/OSHA enforcement activities. All communications
between the employer and the Consultation Service are held
in confidence and not shared with Cal/OSHA enforcement
staff. On-site consultation visits do not result in
citations or penalties. However, in return for receiving
the free onsite assistance the employer must agree to
timely correction of hazards identified that could lead to
the serious injury or death of an employee. Because work
site conditions change over time, the Consultation Service
cannot guarantee that Cal/OSHA enforcement will not inspect
the workplace or find violations. The goal of consultation
assistance is to help employers in their efforts to become
self-sufficient concerning workplace safety and health.
Injury and Illness Prevention (IIP) program
improvement-statistics show that many occupational
accidents and illnesses are preventable through an
effective safety and health program. For a workplace
program to be effective, the employer should develop a
comprehensive plan with emphasis on both management
commitment and employee participation. Development and
conscientious implementation of a comprehensive program
should result in lower injury, illness and fatality rates
along with reduced workers' compensation costs. Section
3203 of Title 8 in the California Code of Regulations
requires all California employers to have a written,
effective injury and illness prevention program that
addresses hazards pertaining to the particular workplace
covered by the program. The Cal/OSHA Consultation Service
publishes guidelines and model programs to help employers
carry out such a program. Consultation assistance is
available for evaluating and improving the employer's
program.
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Educational seminars-the Consultation Service facilitates
and participates in workplace safety and health seminars
focused on high-hazard industries, processes and
occupations.
Voluntary Protection Program-administered through the
Cal/OSHA Consultation Service, the California Voluntary
Protection Program (Cal/VPP) is a certification program
recognizing employers whose occupational safety and health
programs are exemplary and meet Cal/VPP guidelines.
Employers participating in this program have produced
significant reductions in injury and illness rates as a
result of employer commitment to and employee involvement
in workplace safety and health. This program enables
conscientious employers and employees to work together with
the Consultation Service in managing safety and health on
the job. In addition to the benefits of lower injury and
illness rates, Cal/VPP participants receive nationwide
recognition-and Cal/OSHA enforcement will not make routine
scheduled inspections of a participating certified work
site."
ARGUMENTS IN SUPPORT :
This measure is sponsored by the Associated Builders and
Contractors of California (ABC), who states that California is
known for having very detailed, complex labor laws, and imposing
severe penalties on employers that violate these laws. They
contends that this bill seeks to provide employers a cost
effective way to obtain expert answers to their questions on how
best to comply with California's employment requirements. The
bill would permit the Labor Commissioner) to establish a fee-for
service consultation unit where employers could seek an audit of
their labor law compliance in order to be certain that their
workplace is in compliance with state labor laws, rules and
regulations. The bill would also, similar to the process used
by the DOSH consultation unit, prohibit the citation of
employers for violations during the consultation.
ABC argues that the program would be modeled after a concept
used at DOSH to improve safety records for company employers.
It would not cost money for the taxpayers, as user fees and
grants from outside organizations would support it. ABC
contends that the program should save money for taxpayers by
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resolving confusing or ambiguous situations in labor law that
would normally result in lengthy investigations and enforcement
proceedings by the Labor Commissioner.
The author and the sponsor indicate that they are interested in
exploring amendments to "clarify that willful violations are not
covered by the prohibition on citations during the
consultation." The sponsor has also expressed a willingness to
specify that the requirement that the employer take "corrective
action" include an obligation to "make whole" the employees.
ARGUMENTS IN OPPOSITION :
The California Labor Federation, AFL-CIO argues that this bill
jeopardizes the rights of California workers in a number of
ways. To begin with, labor law enforcement is already inadequate
to serve as an effective deterrent. Employers know they are
unlikely to get caught and that, in most cases, they will face
minimal fines. To create a new safe harbor for labor law
violations of any kind, regardless of how serious, will further
erode existing disincentives for violating workers rights.
In addition, they argue that the safe harbor provision applies
to everything DLSE discovers, even a violation totally separate
from the one the employer sought advice about. So if an employer
had cheated workers out of meal breaks, but sought advice on
posting requirements, he could not be cited for either
violation.
They also contend that this bill does not even require that
workers be made whole. Instead, it only requires the employer to
take "corrective action that remedies the violation." That means
that if an employer had a policy of making workers clock out and
then work off the clock, he could potentially satisfy that
requirement just by instituting a new policy that complies with
the law. The workers might never even get unpaid wages for hours
worked, let alone the penalties they are owed for having their
rights violated.
Finally, the California Labor Federation notes that they have
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also just recently learned that the DLSE has already instituted
a similar voluntary compliance program without any statutory
authorization or legislative review. Notwithstanding their
concerns on the substance of this bill, they state that they
must oppose any attempts to expand the existing program without
first understanding how the DLSE is handling these cases now and
whether such a program is consistent with their mission to
protect the workers of California.
The State Building and Construction Trades Council argues that,
while on its face this bill sounds like a good idea, it has the
effect of letting guilty employers off the hook. They argue
that the bill allows an employer to simply sidestep charges by
"accepting" the "consulting services offered" by the DLSE.
Unscrupulous employer will be further incentivized to break the
law with this new "get out of jail free" law. They contend
that, if anything, employers that steal from the paycheck of a
worker should face jail time, not the opportunity to accept
subsidized remediation and walk free.
PRIOR LEGISLATION :
This bill is identical to SB 1363 (McClintock) from 2002. That
measure failed passage in the Senate Committee on Labor and
Industrial Relations.
COMMITTEE STAFF COMMENT :
The author's office and the sponsor have advised the Committee
staff that they would like to take testimony but no vote on this
measure, thereby making it a two-year bill.
REGISTERED SUPPORT / OPPOSITION :
Support
Associated Builders and Contractors of California (sponsor)
Civil Justice Association of California
Western Electrical Contractors Association
Opposition
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Association of SMUD Employees
California Conference Board of the Amalgamated Transit Union
California Labor Federation, AFL-CIO
California Teamsters Public Affairs Council
Consumer Attorneys of California
Engineers and Scientists of California
Glendale City Employees Association
International Longshore & Warehouse Union
Professional & Technical Engineers, Local 21
San Bernardino Public Employees Association
San Luis Obispo County Employees Association
Santa Rosa City Employees Association
State Building and Construction Trades Council of California
Strategic Committee of Public Employees, LIUNA
UNITE HERE!
United Food and Commercial Workers Union, Western States Council
Analysis Prepared by : Ben Ebbink / L. & E. / (916) 319-2091