BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
AB 350 (Solorio)
Hearing Date: 8/22/2011 Amended: 8/15/2011
Consultant: Bob Franzoia Policy Vote: L&IR 5-1
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BILL SUMMARY: AB 350 would rename the Displaced Janitor
Opportunity Act as the Displayed Property Service Employee
Opportunity Act and make the provisions of the act applicable to
property services, which would consist of licensed security,
window cleaning, food cafeteria and dietary services, janitorial
services and cleaning related or light building maintenance
services. This bill would exclude from the definitions of
contractor and subcontractor specified types of food service
providers.
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Fiscal Impact (in thousands)
Major Provisions 2011-12 2012-13 2013-14 Fund
Expansion of definition of Minor, if any, increase in
enforcement Special*
displaced employee activities
State contract restrictions No costs, to likely minor new
costs if the Special** state assumes or
re-bids a property services contract
Department of General $10
Special**
Services contract information
* Labor Standards and Compliance Fund
** Service Revolving Account (General Fund and special fund
reimbursements)
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STAFF COMMENTS: A successor contractor or subcontractor
providing janitorial or building maintenance service is
required, for a 60-day transition employment period, to retain
employees who have been employed by the terminated contractor or
its subcontractors. Successor contractors or subcontractors are
AB 350 (Solorio)
Page 1
not required to pay the same wages or offer the same benefits as
were provided by the prior contract. If fewer new employees are
needed under the new contract, the contractor or subcontractor
shall retain employees by seniority. At the end of the 60-day
transition employment period, existing law requires a successor
contractor to provide a written performance evaluation to each
retained employee. If the employee's performance during that
60-day period is satisfactory, the successor contractor is
required to offer the employee continued employment. Any
employment after the 60-day transition employment period is
at-will employment under which the employee may be terminated
without cause.
Preliminary information indicates existing provisions have not
resulted in significant enforcement actions. Labor Code 1062
(a) provides that an employee, who was not offered employment or
who has been discharged in violation of this chapter by a
successor contractor or successor subcontractor, or an agent of
the employee may bring an action against a successor contractor
or successor subcontractor in any superior court. Labor Code
1062 (c) provides that if the employee is the prevailing party
in the legal action, the court shall award the employee
reasonable attorney's fees and costs as part of the costs
recoverable.
Under state civil service rules positions in civil service are
filled by appointment (See California Constitution, Article VII,
Section 1(b), Government Code 19050 and Government Code 18525
("appointment" defined)). Unless exempted by Article VII,
appointments to vacant positions must be made from employment
lists established as a result of competitive written or oral
examinations (see Government Codes 19050 and18900). All
appointments, transfers, reinstatements, promotions, and
demotions must be made in accordance with the State Civil
Service Act and regulations under the Act (see Government Code
19050). Thus, if the state terminates a property services
contract to have civil service employees perform the work, the
provisions of this bill would not apply.
If the state re-bids a property services contract and the
successor contractor or subcontractor will employee fewer
employees, the successor contractor shall retain for 60 days
employees by seniority within a job classification and shall, as
provided, offer employees continued employment under specified
AB 350 (Solorio)
Page 2
conditions. Also, pursuant to "successor employer" decisions, a
subsequent employer who retains a majority of the employees from
the previous contract and is in the same business must recognize
the incumbent union and bargain in good faith. The successor
contractor or subcontractor would not, however, inherit the
existing collective bargaining agreement and could bargain a new
agreement.
As noted above, the requirement to bargain is not a requirement
to be bound to the predecessor's collective bargaining agreement
and the successor contractor or subcontractor may set the
initial terms of employment for its employees without first
consulting with the union. To the extent this contract
restriction, or any contract restriction increases contract
bids, the cost of a new contract could be higher. An estimate
of those potential costs in comparison to existing state
contracts is unavailable.
The Department of General Services will have a one-time cost of
$10,000 to update the State Contracting Manual.
Staff notes a technical amendment is needed to strike out: 90
and insert: 60 on page 6, line 26.