BILL ANALYSIS �
AB 1855
Page 1
ASSEMBLY THIRD READING
AB 1855 (Torres)
As Amended May 7, 2012
Majority vote
LABOR & EMPLOYMENT 5-2
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|Ayes:|Swanson, Alejo, Allen, | | |
| |Torres, Yamada | | |
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|Nays:|Morrell, Gorell | | |
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SUMMARY : Extends existing law related to liability for
financially-insufficient contracts to the warehouse industry,
and makes other related changes to existing law. Specifically,
this bill :
1)Extends provisions of current law related to liability for
financially-insufficient contracts to the warehouse industry
(in addition to the industries covered under existing law).
2)Provides that, in order to establish a rebuttable presumption
under current law, a written contract for labor or services
must be made available to an employee upon request.
EXISTING LAW :
1 Prohibits a person or entity from entering into a contract or
agreement for labor or services with a construction, farm
labor, garment, janitorial, or security guard contractor where
the person or entity knows or should know that the contract or
agreement does not include funds sufficient to allow the
contractor to comply with applicable laws governing the labor
or service to be provided.
2)Establishes a rebuttable presumption that there has been no
violation of the law where the contract or agreement is in
writing and meets specified conditions.
3)Authorizes an aggrieved employee to bring an action to recover
the greater of his or her actual damages or $250 per employee
AB 1855
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per violation for an initial violation and $1,000 per employee
for each subsequent violation, in addition to injunctive
relief.
FISCAL EFFECT : Unknown
COMMENTS : This bill adds the "warehouse" industry to Labor
Code Section 2810, existing law which relates to liability for
individuals who enter into contracts for labor or services in
five specified industries that do not include funds sufficient
to comply with labor laws.
Senate Bill 179 (Alarcon), Chapter 908, Statutes of 2003,
enacted Labor Code Section 2810, which prohibits a person or
entity from entering into a contract or agreement for labor or
services with a construction, farm labor, garment, janitorial,
or security guard contractor where the person or entity knows or
should know that the contract or agreement does not include
funds sufficient to allow the contractor to comply with
applicable laws governing the labor or service to be provided.
At the time, the author and supporters of the bill argued that
the legislation was necessary to protect workers and law-abiding
employers from employers and contractors that knowingly enter
into contracts and agreements that are financially inadequate to
permit compliance with applicable laws. The purpose of this
bill was to establish state policy regarding financially
insufficient contracts in industries most associated with the
underground economy.
In recent years, some workers and worker advocates have noticed
an increase in the number of employers who are moving away from
a traditional employment model towards a business model that
utilizes "subcontracted" or "contingent" workers. Much recent
attention has focused on one industry in particular: the
warehouse and logistics industry, especially in the Inland
Empire region of Southern California.
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"
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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.
Supporters of this bill argue that this bill is aimed at
establishing accountability in the warehouse industry. These
can and should be good jobs that help us rebuild a middle class
in this state. This bill will help us eliminate the underground
economy within this industry by prohibiting financially
insufficient contracts. This levels the playing field for the
many companies that follow the law and gives hope to these
workers of a better life.
Opponents object to the portion of the bill that would require a
contracted employer to make available the contract with its
clients to employees upon request. They state that the contract
is proprietary and contains information concerning pricing
which, if disclosed, could distort the marketplace for services
and create an unfair competitive advantage for competitors.
Opponents also contend that the bill does not adequately define
the "warehouse" industry and therefore could inadvertently cover
many other businesses that store goods or merchandise, such as
in a back storage room.
Analysis Prepared by : Ben Ebbink / L. & E. / (916) 319-2091
FN: 0003464