BILL ANALYSIS �
AB 766
Page 1
Date of Hearing: May 4, 2011
ASSEMBLY COMMITTEE ON LABOR AND EMPLOYMENT
Sandre Swanson, Chair
AB 766 (Monning) - As Amended: April 26, 2011
SUBJECT : Labor law enforcement.
SUMMARY : Specifies that enforcement agencies that are included
in the Joint Enforcement Strike Force on the Underground Economy
(JESF) and other specified agencies shall have access to
unmarked or unobliterated copies of certified payroll records on
public works projects.
EXISTING LAW
1)Generally requires the payment of prevailing wages on public
works contracts over $1,000.
2)Requires each contractor and subcontractor performing work on
a public works project to keep payroll records regarding his
or her employees.
3)Authorizes various individuals and entities to inspect
certified copies of such records under certain conditions.
4)Requires that any copy of such records made available to the
public or a public agency must be marked or obliterated to
prevent disclosure of an individual's name, address and social
security number. The name and address of the contractor
awarded the contract or the subcontractor performing the
contract shall not be marked or obliterated.
FISCAL EFFECT : Unknown
COMMENTS : In October 1993, Executive Order W-66-93 was issued
establishing JESF to combat the underground economy through
coordinating enforcement activities among various entities. The
Legislature subsequently added JESF to state law.
JESF is a partnership among the Employment Development
Department (EDD), the Division of Labor Standards Enforcement,
the Department of Consumer Affairs, the Office of Criminal
Justice Planning, the Franchise Tax Board, the Board of
Equalization, and the U.S. Department of Justice.
AB 766
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The focus of JESF has been to target, among other industries,
auto body repair, bars and restaurants, construction, garment
manufacturing, public works, and janitorial services. JESF is
authorized to form joint enforcement teams. Since the formation
of JESF three joint enforcement efforts have been implemented:
the Employment Enforcement Task Force (EETF), the Construction
Enforcement Project, and the Janitorial Enforcement Project.
The Director of EDD is the chairperson of the strike force and
EDD is designated as the lead agency of JESF. The program is
administered through the EDD's Underground Economy Operations
program. Any employee of the agencies that participate in JESF
are authorized to issue Labor Code citations and penalty
assessment orders to employers found in violation of the law.
ARGUMENTS IN SUPPORT :
The author states the following in support of this bill:
"�This bill] will be a tool to help state agencies involved
in enforcement of underground economy activity to
coordinate their limited financial resources for increased
enforcement results. Specifically, this bill amends Labor
Code 1776 to permit unredacted copies of records to be
shared between agencies that are included in the Joint
Enforcement Strike Force on the Underground Economy and
other law enforcement agencies investigating violations of
law.
California's vast underground economy is thriving.
According to EDD analysis of IRS data, California's
underground economy is worth between $60 and 140 billion a
year. Because business in the underground economy is
conducted outside the bounds of state law, businesses
operating there are able to gain an unfair advantage over
their law-abiding competitors by flouting labor laws and
ignoring their tax obligations to state and local
governments?
?Unfortunately, the state does not currently have a
coordinated system of enforcing its tax and labor laws.
Thus, despite the clear nexus between employers that
violate both sets of laws, there is no formal process to
ensure that the enforcement efforts of one department are
reflected in the work of another.
AB 766
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This lack of coordination is worsened by the limited
enforcement resources available in California. For example,
the past several decades, labor law enforcement has been on
the decline. Between 1980 and 2000, California's workforce
grew 48 percent, but the Division of Labor Standards
Enforcement (DLSE) staffing levels went down 7.6%.
The bill would provide for greater coordinated efforts
between state agencies that are involved with underground
economy enforcement without having to individually
reconstruct a case for prosecution. The anticipated result
will be significantly greater compliance by business owners
doing business in California, as well as increased monies
collected for the California's General Fund."
REGISTERED SUPPORT / OPPOSITION :
Support
California Labor Federation, AFL-CIO
Opposition
None on file.
Analysis Prepared by : Ben Ebbink / L. & E. / (916) 319-2091