BILL ANALYSIS �
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|SENATE RULES COMMITTEE | AB 2389|
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THIRD READING
Bill No: AB 2389
Author: Bonnie Lowenthal (D)
Amended: 6/19/12 in Senate
Vote: 21
SENATE BUSINESS, PROF. & ECON. DEVELOP. COMM. : 6-2, 7/2/12
AYES: Price, Corbett, Correa, Hernandez, Negrete McLeod,
Vargas
NOES: Strickland, Wyland
NO VOTE RECORDED: Emmerson
SENATE APPROPRIATIONS COMMITTEE : Senate Rule 28.8
ASSEMBLY FLOOR : 52-22, 5/21/12 - See last page for vote
SUBJECT : Contractor disclosure requirements
SOURCE : California Labor Federation
California Professional Firefighters
DIGEST : This bill prohibits a contractor that provides
services that require entering the residence or place of
lodging of a member of the public from utilizing a uniform
that bears the name or a logo of the contracting entity,
unless each uniform meets certain disclosure requirements.
ANALYSIS : Existing law:
1.Specifies no person shall state, in an advertisement that
he is a producer, manufacturer, processor, wholesaler, or
CONTINUED
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importer, or that he owns or controls a factory or other
source of supply goods when such is not the fact. No
person shall in any other manner misrepresent the
character, extent, volume, or type of his business.
2.Makes it unlawful for any person doing business in
California and advertising to consumers to make any false
or misleading advertising claims. Includes claims that
purport to be based on factual, objective, or clinical
evidence; compare the product's effectiveness or safety
to that of other brands; or, purport to be based on any
fact.
3.Authorizes an employer, without prohibition, to prescribe
the weight, color, quality, texture, style, form and make
of uniforms required to be worn by his or her employees.
This bill:
1.Prohibits a contractor that provides services that
require entering the residence or place of lodging of a
member of the public from utilizing a uniform that bears
the name or logo of the contracting entity, as defined,
unless each uniform meets certain disclosure
requirements.
A. The uniform or vehicle state the contractor's name
and that it is providing services on behalf of the
contracting entity;
B. The uniform states the contractors name;
C. The uniform is clearly displayed in a conspicuous
place, in sharp contrast to the background, and in
such a way that the size, shape, and color is ready
visible.
1.Creates the following definitions:
A. "Contracting entity" to mean any person, business,
or public entity contracting with another person or
business to provide services on its behalf.
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B. "Contractor" to mean any person or business that
contracts to provide services on behalf of a
contracting entity.
C. "Public entity" to mean the state or any political
subdivision thereof, including, but not limited to, a
city, county, city and county, or special district.
1.Specifies that these provisions shall not apply if a
contracting entity and a contractor are jointly and
severally liable for any claims arising out of work
performed pursuant to a contractual agreement.
2.Makes legislative findings and declarations related to
public communications on consumer awareness.
Background
Existing law prohibits false or misleading advertisement
and the impersonation of a licensed individual within the
BPC. While this bill is intended to protect consumers from
individuals who may unscrupulously hold themselves out as
an emergency responder or other professional to gain entry
to a personal residence, existing criminal law may take
precedent in such instances.
Background
AB 2373 (Norby) amends the definition of an independent
contractor. This bill also amends various other statutory
codes to incorporate this definition of an independent
contractor.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: No
SUPPORT : (Verified 8/6/12)
California Labor Federation (co-source)
California Professional Firefighters (co-source)
California Conference Board of the Amalgamated Transit
Union
California Nurses Association
California State Association of Electrical Workers
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California State Pipe Trades Council
California Teamsters Public Affairs Council
Engineers and Scientists of California
International Longshore & Warehouse Union
Professional & Technical Engineers, Local 21
State Building and Construction Trades Council of
California
UNITE HERE
United Food and Commercial Workers Union, Western States
Council
Utility Workers Union of America, Local 132
Western States Council of Sheet Metal Workers
OPPOSITION : (Verified 8/6/12)
American Medical Response
Association of California Healthcare Districts
CalChamber
California Ambulance Association
California Association of Bed and Breakfast Inns
California Association of Joint Powers Authorities
California Hotel & Lodging Association
California Retailers Association
California State Association of Counties
Emergency Medical Services Administrator's Association of
California
League of California Cities
Messenger Courier Association of America
National Emergency Medical Services Association
National Federation of Independent Business
Rural Council of Rural Counties
TrueBlue, Inc.
Urban Counties Caucus
ARGUMENTS IN SUPPORT : This bill is co-sponsored by the
California Labor Federation and the California Professional
Firefighters. The co-sponsors state, California and the
nation have experienced steady increases in contingent
work. Workers are routinely hired through third party
intermediaries, such as temporary agencies and
subcontractors. This practice is occurring in major
corporations, as well as throughout the underground
economy.
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"At times, workers are not even told who their real
employer is. Hotel workers are sometimes hired by the
hotel, but paid by a subcontractor who is the employer of
record. Warehouse employees are hired by temporary firms,
but dispatched to multiple warehouses, where they are
supervised by entities that claim no employer status. In
this subcontracted economy, workers have little access to
information about their actual employer and few tools to
ensure their rights are not violated.
"In addition, the public knows little about these
employment practices and how they may be impacted. When
workers enter a home or a hotel room, the occupant has the
right to know if this is a city employee, or a known
company employee, a temporary or contracted out employee,
or an independent contractor. Not only does that have
repercussions in terms of training, supervision, and
background check, but it can also change the occupant's
liability if that worker is injured on the job.
"One factor that adds to the confusion is that
subcontracted workers often wear the uniform of the
contracting entity rather than the actual company that
employs them. Many also drive vehicles with company logos
that do not represent their actual employer. In some
cases, these vehicles even have local government logos, so
the public believes workers are public employees when they
are actually private contractors.
"This bill is simply about information and transparency. A
company that is proud of its employment practices should
have nothing to hide. This bill has no costs to the state
and only minimal costs to private employers.
ARGUMENTS IN OPPOSITION : The California Chamber of
Commerce writes in opposition stating, "AB 2389 will create
significant confusion for the public. With two more
competing company names on the uniform, a member of the
public is likely to experience more confusion as to which
company is responsible for the service, rather than less
confusion. Moreover, the term "uniform" and accompanying
requirements in AB 2389 are not readily defined. For
example, AB 2389 requires a "uniform" to display the name
of the contractor and contracting entity in "sharp
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contrast" to the background color and displayed in a way
that the "size, shape, and color is readily visible."
"Finally, these additional "uniform" requirements would
only apply to business that utilize contractors as part of
their business model and therefore unfairly increase their
operating cost. As recently reported in a study conducted
by Dr. Philip J. Romero in September 2011, titled "The
Economic Benefits of Preserving Independent Contracting,"
California's economic success is heavily dependent upon
small business and independent contractors. The study
references the fact that the use of independent contractors
provides a benefit to both parties: "the contractor earns
great autonomy and higher compensation because they are
paid based only on productivity; and the client gains
higher productivity and more long-term flexibility from
reduced fixed costs." Accordingly, we should not seek to
impose any new burdens or penalties that discourage the use
of such businesses or independent contractors, such as AB
2389.
ASSEMBLY FLOOR : 52-22, 5/21/12
AYES: Alejo, Allen, Ammiano, Atkins, Beall, Bill
Berryhill, Block, Blumenfield, Bonilla, Bradford,
Brownley, Buchanan, Butler, Charles Calderon, Campos,
Carter, Cedillo, Chesbro, Davis, Dickinson, Eng, Feuer,
Fong, Fuentes, Furutani, Galgiani, Gatto, Gordon, Hall,
Hayashi, Hill, Huber, Hueso, Huffman, Lara, Bonnie
Lowenthal, Ma, Mendoza, Mitchell, Monning, Nestande, Pan,
V. Manuel P�rez, Portantino, Skinner, Solorio, Swanson,
Torres, Wieckowski, Williams, Yamada, John A. P�rez
NOES: Achadjian, Conway, Donnelly, Beth Gaines, Garrick,
Grove, Hagman, Halderman, Harkey, Jeffries, Jones,
Knight, Logue, Mansoor, Miller, Morrell, Nielsen, Norby,
Olsen, Silva, Valadao, Wagner
NO VOTE RECORDED: Cook, Fletcher, Gorell, Roger Hern�ndez,
Perea, Smyth
JJA:n 8/7/12 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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