BILL ANALYSIS �
AB 1744
Page 1
ASSEMBLY THIRD READING
AB 1744 (Bonnie Lowenthal)
As Amended March 29, 2012
Majority vote
LABOR & EMPLOYMENT 5-1 APPROPRIATIONS 12-5
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|Ayes:|Swanson, Alejo, Bonnie |Ayes:|Fuentes, Blumenfield, |
| |Lowenthal, Gorell, Yamada | |Bradford, Charles |
| | | |Calderon, Campos, Davis, |
| | | |Gatto, Hall, Hill, Lara, |
| | | |Mitchell, Solorio |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Morrell |Nays:|Harkey, Donnelly, |
| | | |Nielsen, Norby, Wagner |
| | | | |
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SUMMARY : Requires temporary services employers to disclose on
the itemized payroll statement furnished to employees the name
and address of the legal entities that secured the services of
the employer and total hours worked for each legal entity.
EXISTING LAW :
1)Provides that every employer must furnish each employee with
an itemized statement at the time of each payment of wages
that shows, among other things, the name and address of the
legal entity that is the employer. A knowing and intentional
violation of this provision is a misdemeanor.
2)Exempts the state or a city, county, city and county,
district, or other governmental entity from the above
provisions.
3)Requires all garment contractors provide the name of the
garment manufacturer on an employee's payroll statement.
4)Provides that the listing by an employer of the name and
address of the legal entity that secured the services of the
employer on the itemized payroll statement shall not create
any liability on the part of that legal entity.
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FISCAL EFFECT : According to the Assembly Appropriations
Committee, minor absorbable costs to the Department of
Industrial Relations to implement this bill.
COMMENTS : According to the author, the percentage of
Californians whose jobs are temporary has nearly quadrupled in
the past 30 years. The author states that "temporary services
employers" are not required to include the length of time the
employee worked for a specific legal entity on the employee's
paystub. According to the author, listing the legal entities
who secure the employee's services and the hours worked will
bring clarity to temporary employees and modernize the Labor
Code to reflect this growing form of alternative employment.
Research suggests that the temporary service industry is
expanding and moving from a stopgap-staffing provider to a more
systematic and continuous role as an intermediary between
companies and labor supplies across a broad array of industries
and occupations (Peck and Theodore, 2005). According to the
United States (U.S.) Bureau of Labor Statistics, temporary
employment in the U.S. increased from 1.1 million to 2.3 million
in 2008, totaling 1.7% of total U.S. employment.
The Bureau of Field Enforcement (BOFE) within the Division of
Labor Standards Enforcement (DLSE) investigates complaints and
takes enforcement actions to ensure employees are not being
required or permitted to work under unlawful conditions.
Enforcement action taken by BOFE investigators involves the
enforcement of child labor laws; the requirement of employers to
carry workers' compensation insurance coverage; audits of
payroll records, collection of unpaid minimum wages, overtime,
as well as prevailing and other unpaid wages; the issuance of
civil and criminal citations; the confiscation of illegally
manufactured garments; and, injunctive relief to preclude
further violations of the law.
In calendar year 2010 (the most recent year for which data is
available) the BOFE conducted a total of 9,034 inspections,
resulting in a total of 4,367 citations. The largest single
source of violations and citations was the failure to carry
workers' compensation insurance with 2,155 citations in 2010.
Though BOFE issued only 894 citations for itemized wage
statement violations, the dollar amount of assessments for this
citation category in the amount of $7,231,500 is second to that
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of workers' compensation insurance.
Current state law requires farm labor contractors (FLC) to
disclose on the itemized statement the name and address of the
grower or other FLC that secured the employers' services. The
law also provides that the listing by the FLC of the name and
address of the legal entity that secured the services of the
employer on the itemized payroll statement shall not create any
liability on the part of that legal entity. State law also
requires this information to be provided by garment contractors.
On February 15, 2012, the Assembly Labor and Employment
Committee conducted an informational hearing entitled,
"Confronting the Challenges of a Subcontracted Economy: The
Experience of Warehouse Workers in the Logistics Industry as a
Case Study." The hearing explored the overall issue of whether
an employment model that relies heavily upon a "subcontracted"
workforce results in a situation in which workers' rights are
adequately protected, and whether enforcement agencies are able
to adequately enforce existing law to hold responsible parties
accountable. The hearing focused primarily on the warehouse
industry as a case study that has garnered recent attention.
The hearing also examined whether state policy adequately
addresses the situation or whether policymakers should consider
additional regulatory or statutory changes.
Arguments in support: The California Labor Federation (CLF),
writing in support of this bill, states that it will ensure that
temporary employees are properly paid. CLF writes that
temporary workers are particularly vulnerable to abuse and often
have no guarantee of work and do not know ahead of time where
they will be dispatched or what they will be asked to do. They
note that some temporary workers rotate between assignments with
different rates of pay for different tasks or sites. CLF writes
that this modest bill provides essential protection to temporary
workers. In their letter of support, the American Federation of
State, County and Municipal Employees (AFSCME), writes that
listing the legal entities who secured their services and hours
worked on the paystubs of temporary employees will modernize the
labor code to reflect the growing form of alternate employment.
Arguments in opposition: In a letter expressing opposition, the
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American Staffing Association (ASA) and the California Staffing
Professionals (CSP) write that there has been no demonstrated
need for this bill. ASA and CSP state that the temporary
service industry employed close to three million people per day
nationwide in 2011 and they were not aware of their employees'
desire to have client information added to their paystub.
According to ASA and CSP, employees are given the name and
address of the client and a description of the work they will be
performing when they accept an assignment. In addition, ASA and
CSP write that this bill would add time, expense, and possible
reconfiguration of the software needed to generate the paycheck.
They note that the money and time spent on this activity could
be used for better purposes, such as training employees or
finding their employees job assignments.
Analysis Prepared by : Shannon McKinley / L. & E. / (916)
319-2091
FN: 0003434