BILL ANALYSIS Ó
Senate Committee on Labor and Industrial Relations
Ted W. Lieu, Chair
Date of Hearing: September 7, 2011 2011-2012 Regular
Session
Consultant: Gideon L. Baum Fiscal:Yes
Urgency: No
Bill No: AB 101
Author: John A. Perez
Version: As Amended September 2, 2011
SUBJECT
Child care: family child care providers: bargaining
representative.
KEY ISSUE
Should the state exempt family child care providers from
antitrust laws and allow them to organize to negotiate over
wages, benefits, and other occupational matters?
PURPOSE
To allow family child care providers to organize and negotiate
for improved working conditions, including wages and benefits.
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
licensing requirement for any of the following reasons:
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, children
at-risk of abuse or neglect, children who have limited English
proficiency, and children who spend less than six hours per
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Senate Committee on Labor and Industrial Relations
day in care or more than eight-and-one-half hours per day in
care.
(Education Code §§ 8220 to 8227)
This bill would give licensed and unlicensed child care
providers the right to 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, as
well as full communication between child care providers and
the state by authorizing family child care providers to
form a provider organization;
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, and whether
or not the provider has participated in a child care
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subsidy program in the previous six months and must make
that information available to the provider organization.
The provider organization must bear the reasonable costs of
collecting the information.
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 either of the following:
1) All of the licensed child care providers;
2) All or a reasonable subset of family child care
providers who participate in a child care subsidy
program.
a) 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 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;
b) Provides that, after a provider organization has been
certified by PERB, the provider organization may petition
PERB to expand an existing unit of providers based on a
showing of 30% of the providers to be added to the unit;
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
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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. At the Governor's option, the
scope of representation may exclude this issue from the
scope of representation until July 1, 2014;
h) Expanded access to food and nutrition programs.
i) The deduction of membership dues and fair share
fees.
j) 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
programs of publicly funded child care, 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) Requires that, before the Governor or other state
entities arrive at a determination of policy or course of
action, shall consider fully the presentations made by the
certified provider organization on behalf of the providers
it represents.
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c) Provides that if an agreement is reached 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.
d) Provide the child care provider organization with the
same rights 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.
e) 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 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. A Brief Background on Family Child Care Homes and the Child
Care System in California
According to data from the UC Berkley Center for Labor
Research and Education report, Economic Impacts of Early Care
and Education in California, California primarily distributes
child care funding through a voucher system. The majority of
the vouchers are given to families that are CALWORKS
recipients, though families with incomes at or below 75
percent of the state median income, which is currently $45,228
for a family of three, are eligible to receive these vouchers.
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According to the Department of Finance, California's
subsidized child care system serves over 951,000 children.
Care is provided to children in families currently or
previously receiving CALWORKS, as well as to other low-income
working families, subject to available resources. The state
spends a bit more than $1.2 billion on child care that would
be impacted by this bill, which includes federal funds from
the Temporary Assistance for Needy Families (TANF) and the
Child Care and Development block grants. Advocates for this
bill estimate that at least 200,000 eligible children do not
receive subsidized child care because of a shortage of
resources.
According to numbers supplied by the Department of Finance and
the Legislative Analyst's Office, there are approximately
80,000 to 100,000 individuals working family child care
industry that would be impacted by this bill. These
individuals care for approximately 145,000 children. The same
report from the UC Berkley Center for Labor Research and
Education, the highest paid child care providers were in
licensed day care centers, had a college degree, and were paid
on average $34,382 -- $16,000 less than an average California
kindergarten teacher. In family child care homes, the average
income for small homes was $11,968, while family child care
providers in larger family child care homes received an
average of $19,254.
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
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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 :
This bill is jointly sponsored by the American Federation of
State, County and Municipal Employees (AFSCME) and the Service
Employees International Union (SEIU). 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, with low net income and no
employer-provided health care, many family child care
providers struggle to gain and maintain health insurance
needed to stay healthy and care for children. All of these
problems directly contribute to the high turnover in the
profession, and what this ultimately means is that children
are not receiving the quality of care they need and deserve.
The sponsors argue that this bill aims to improve access and
to improve the quality of child care by creating a more stable
workforce and allowing family child care providers to join
together on matters that affect their profession.
These matters include developing joint marketing programs,
developing a substitute provider pool, purchasing group health
benefits, and the ability to meet with state licensing
agencies to address areas of common concern and improve
consistency in the enforcement of regulations affecting
licensed family providers.
4. Opponent Arguments :
This bill is not opposed. However, when a similar bill (AB
1164) was heard in Committee in 2007, several organizations
opposed. Their arguments are summarized below:
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The California Child Development Administrators Association
(CCDAA), the Professional Association of Childhood Education
(PACE), and the Child Development Policy Institute are all in
opposition to this bill. They believe that AB 1164 will have
an adverse impact on low income families receiving State child
care subsidies and support, on eligible families on the
waiting list for State child care subsidies and support, on
the preschool readiness efforts of the Department of
Education, and on the current system of locating and
reimbursing subsidized child care.
The Howard Jarvis Taxpayers Association (HJTA) is also in
opposition to this bill. HJTA believes that this bill would
impose "significant fiscal pressure" on California's budget,
at a time when the state faces a five billion dollar
structural deficit and a revenue shortfall.
5. Staff Questions:
1) Currently, rates for child care services are set by what
families will pay for child care. The state subsidizes or
purchases child care slots for families in need, and does
not pay more than a private individual. If the state is
asked to purchase the slots in a different manner, or at a
different price, how would that affect the private
individual purchasing child care? How does exempting this
process from antitrust law affect an individual purchasing
child care?
2) As part of the scope of representation, AB 101 delays
the ability of a certified provider organization to
negotiate on wages until July 1, 2014, barring the Governor
voluntarily choosing to do so. When noting that benefits
are still negotiable, will the exclusion of wages be a
sufficient to check the cost pressures created by this
bill?
3) If the state's costs to subsidize or purchase child care
services are increased, what will be the effect on the
number of child care slots available and the existing
number of children that do not receive subsidized child
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care because of a shortage of resources?
4) What would it mean for the Governor and the relevant
state agencies to "fully consider" presentations made by
the certified provider organization prior to embarking on a
policy course shift? Does that create a risk of providing
a licensed community with undo access to rule makers prior
to a policy shift?
6. Prior Legislation :
SB 867 (Cedillo) of 2008 was nearly identical to AB 1164 (see
below). It was vetoed by Governor Schwarzeneger.
AB 1164 (De Leon) was very similar to this bill. It was
vetoed by Governor Schwarzenegger. In his veto message,
Schwarzenegger stated the following: "Changes in the current
reimbursement structure, increases in family child care
provider reimbursement rates, expanded provider training
efforts, or other program enhancements could come at the
expense of the number of available child care slots. In light
of the current structural budget deficit, it is imperative
that we balance our fiscal reality and the need to provide
services to working families."
SB 697 (Kuehl) of 2006, which, except wording, was very
similar to AB 1164. It was vetoed by the Governor
Schwarzenegger.
SB 1164 (Kuehl) of 2006 contained several provisions related
to the state's child care system, including language that was
very similar, but not identical to, the language contained in
AB 1164. SB 1600 was held by the Senate Committee on
Appropriations.
SB 1897 (Burton) of 2004 was similar to SB 1600 but was vetoed
by the Governor, whose veto message read in part: "This bill
has the potential to add significant fiscal pressure to the
State's current budget deficit by establishing new
reimbursement methodologies likely to increase rates" by
facilitating the organization of provider organizations.
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Senate Committee on Labor and Industrial Relations
SUPPORT
Service Employees International Union (SEIU) (Sponsor)
American Federation of State, County, and Municipal Employees
(AFSCME) (Sponsor)
California Labor Federation, AFL-CIO
Child Advocacy Institute
OPPOSITION
None on file.
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Senate Committee on Labor and Industrial Relations